How Five Credit Unions Joined Forces to Tackle Affordable Housing

Credit unions have always been better cooperators than competitors. The joint investments of five Washington-based credit unions to the Evergreen Impact Housing Fund (EIHF) is a shining example of the “cooperation among cooperatives” principle in action.

The greater Seattle area is one of the country’s most expensive metro regions, and escalating housing costs make it hard for working-class consumers to live in the area. EIHF creates what it calls “catalytic investment opportunities” that make affordable apartment complexes more attractive to developers.

Jen Reed, VP of Public Relations at Sound Credit Union (a PixelSpoke client), joins us to tackle this month’s BIG question:

How can credit unions go beyond mortgage products and traditional charitable donations to help increase access to affordable housing in their communities?

She talks about Sound’s collaboration with BECU, Washington State Employees Credit Union, Salal Credit Union, and Verity Credit Union to take on this thorny social issue and magnify impact. We also discuss how this effort has benefited Sound’s public image, what lessons Sound has learned from the process, and what future projects are on the horizon.

Key takeaways

1. With a median home price of $700,000 in the Greater Seattle area, Sound CU and four other credit unions saw a big decrease in the number of members looking to buy a home. In a related trend, they saw more members staying in their current homes.
2. The Evergreen Impact Housing Fund was created through the Seattle Foundation to create affordable housing units for individuals with less than 50% of the local median income. The Seattle Foundation is the leader of the entire initiative, and credit unions across the country have been reaching out to learn more.
3. Sound CU has seen that their employees love being part of the project, and they have often used it as an example for members of what it means to be a member-owned financial institution that is rooted in and investing in the local community.
4. This “cooperation among cooperatives” approach has inspired Sound CU and other local credit unions to find more opportunities to partner on these larger projects. They are a powerful example of the credit union different of “people helping people.”
5. Advice to others wanting to do this: talk to your regulators early so they know what you are doing, make sure you are within the regulations for a direct financial investment, and tell that story to your regulators so that as the partnership progresses there are no surprises.

Read the full transcript

Cameron Madill:
Hello and welcome to another episode of The Remarkable Credit Union podcast. We created our podcast to help credit union leaders think outside of the box about marketing, technology, and community impact. Each episode, we bring on expert guests from inside and outside of the industry for conversations about innovation. Our goal is to challenge your preconceptions about business as usual and provide you with actionable takeaways that you can use to grow your membership, improve the financial health of your cooperative, and magnify your positive impact in the community. I’m Cameron Madill, CEO, and one of the co-owners at PixelSpoke.

Kerala Taylor:
I’m Kerala Taylor, senior manager of marketing, and also a co-owner here at PixelSpoke. I’m so excited about our topic today. We all know that the United States is facing a fairly sizable affordable housing crisis, and that’s obviously something that has a direct and significant impact on the financial wellness of credit union members. Today we’re asking how can credit unions go beyond mortgage products and traditional charitable donations to help increase access to affordable housing in their communities? I’m so excited to welcome to our podcast today, Jen Reed. She is the VP of public Relations at Sound Credit Union, which is based in Washington, and previously served as a client relationship manager at an investment firm. When she is not working at the credit union, she spends most of her free time on the baseball field watching her son play ball. Jen, thanks so much for joining us.

Jen Reed:
Thanks for having me. It’s great to be here today.

Kerala Taylor:
Wonderful. As I said, Sound is based in the state of Washington, and according to Consumer affairs, Seattle is the fourth most expensive city in the United States when it comes to housing costs. I hear a lot about that being in Portland, Oregon, and Portland is expensive in and of itself, but we also hear about how much more expensive everything is up in Seattle. I’m just curious how this housing crunch has affected your members. What trends have you been seeing?

Jen Reed:
Sure, great question. I think it varies all over the United States, but as we’re seeing inflation interest rates increasing, it’s really slowing down our members from looking at buying a home. Not only because of the interest rates themselves, but when you’re looking at the cost of housing. In King, Pierce and Thurston County and the surrounding areas, we’re looking at housing price being $700,000. That is, think about kids who are just graduating from college, they’re taking on their student loan debt and then they want to go start their life with and a family and have a home. But when I graduated from college, I couldn’t even imagine taking on a $700,000 home and the mortgage that goes with it.

We definitely are seeing a decrease in folks who are pursuing homeownership. We are also seeing that a lot of folks who already have a mortgage at a low interest rate are staying in their homes. Rather than looking to expand into buying a new home, anything like that, they might be staying there with that lower interest rate and investing in their home. We’re starting to see HELOCs, an increase in HELOCs applications, and people are investing in their homes that way.

Kerala Taylor:
I can certainly relate to that living in what I once assumed to be a starter home that I think I’m going to stay in for life now.

Jen Reed:
Well, I’m with you there. I swear, just renovating the house, it never ends. There’s always something that we’re going to work on and might as well stay there for a long time.

Kerala Taylor:
Absolutely. I was really interested to read about Sound’s efforts supporting what’s called the Evergreen Impact Housing Fund, EIHF is the acronym, and it was the first project of the fund. It seems like a broke ground last August. I’m just wondering if you can tell us a little bit more about this fund and how it helps increase access to affordable housing.

Jen Reed:
Yes, this was a great opportunity where we saw public and private funding coming together. Leaders from all over the community, specifically five credit unions who came together, to try to find a solution surrounding affordable housing. We had this opportunity to help those that are living in King County, it’s in Renton, Washington, who are making 50% of the median income. That’s about $54,000 a year. Knowing that the average apartment in the region is anywhere from 2,000 to $2,500 a month, how can somebody on that budget afford an apartment? We had the opportunity, as business leaders, to really collaborate and come together to try to find a solution. The Solera Project is over 275 units that will have affordable housing for people in the Renton area, and have the opportunity to bring their families in there and be able to manage their finances, have an affordable apartment to live in, and hopefully, their families will be able to flourish. They’ll have a little bit less stress surrounding, “How am I going to afford this?” When it’s set pricing that’s going to benefit them and their families.

Cameron Madill:
I’d love to hear a little more about what specifically, because there is so much to work on our communities. What inspired Sound to get involved in this effort?

Jen Reed:
Yeah. Great question, Cameron. It was a no-brainer for us. We see people struggling every day. When we are investing in our communities, it’s our members’ dollars, they’re deposits that are coming into the credit union. We’re always looking at how we’re doing the right thing for our members, how we’re doing the right thing for our community. We’re seeing people just struggle to be able to afford a place to live. How can we be part of the solution? Our president/CEO sat down with our SVP of consumer lending and they analyzed the investment as a whole, how it would benefit not just our community, but our members, our employees. Our employees love the fact that we are able to be a part of this project that’s helping the community holistically. It was a good investment overall that’s benefiting and creating a stronger community where we’re serving.

Cameron Madill:
Awesome. One of the things I was especially impressed with about this is, as you already mentioned, that there’s five credit union supporting the initiative and one of the eight credit union principles is cooperation among cooperatives. It’s something that I think… PixelSpoke is a cooperative. We think of it as really powerful. We also sometimes lament that we’re not as good at it, I guess, as we wish we were. We kind of wish that everyone we worked with was a co-op. All of our vendors were co-ops. This seems like such a powerful example. I’m just curious if you all at Sound have seen other opportunities for joining forces with other local credit unions to work on some of these really deep socioeconomic challenges that are being faced by all of your members.

Jen Reed:
Yeah. That’s a great question. I think this is what’s unique about credit unions and why we really go out in the community and share with people who don’t understand credit unions, what separates us, what sets us apart from other financial institutions. We will absolutely join forces with other credit union partners that are out in our community to help find solutions such as this, or just last October, three credit unions here in Pierce County came together on International Credit Union Day. We had almost 50 employees who went out in the community and helped paint tiny houses. We helped clean up a local park in Puyallup, and this is what’s unique about us. We’re trying to help build stronger communities. When I first came to the credit union, I was out at a local college and another counterpart from another credit union. I hadn’t met her before.

It was my first time meeting her. She’s like, “Well, don’t you understand how credit unions work? We’re frenemies.” If somebody at Sound is unable to help somebody who’s coming in to get a loan, we are going to reach out to introduce them to another counterpart at a different credit union to try to help this person. Maybe we’re not the best fit for that individual, but I bet there is another credit union out there that could make that difference. This is what separates us from other financial institutions, and really drives home the purpose and the philosophy of credit unions, people helping people. If we’re coming together as leaders in the community to help make a stronger community, that’s what it’s all about.

Cameron Madill:
I’m curious, you already touched on this, that I think you said there’s a lot of positive feedback from your employees. Has there been much feedback from your members and is this something that you market to your members?

Jen Reed:
This is a really great question. We haven’t necessarily marketed it to our members, but obviously, there’s been a lot of friction in the financial industry in the past couple weeks. My role here in public relations is, a lot of times, to hop on a call with a member and talk through why we’re different. Being able to talk about this project with them really resonates with people. You’re able to share that impact, that story that we’re doing. When I talk to a member and I remind them that, “You are an owner here,” and when we’re making decisions on behalf of the credit unions, on behalf of our owners, it’s on behalf of our community. I recently shared this with a member and she was just thrilled. One, that we were open and honest about what’s going on in the financial industry and how credit unions operate differently, but she was thrilled to hear that we’re doing this in the community.

We recently went down to Credit Union Day at the capitol down on Olympia, which is another thing that separates credit unions apart from other financial institutions. We all go there together to talk to our elected officials and to share our story about what separates us, why we’re different, why we need to partner with them to continue the purpose of the credit union movement. We shared this story with them about what we’re doing, and some of them weren’t aware of it. They love that they’re able to take that back to their constituents and share that this is what credit unions are doing in our community to help with affordable housing.

Cameron Madill:
Well, thanks for sharing that, Jen. I think we’re always so curious. It’s like, as consumers, we’re like, we have two different minds. One mind is like, “Be prosocial, do good things.” The other one is, “Be frugal. Give us the lowest possible price.” I think it’s a really interesting, just kind of tension just to be aware of. I love those stories of how you were sharing that both with members, when appropriate, and elected officials. I’d love to know as well, did this change or expand your approach to community giving? Because this is really deep. This is a deep, highly-focused project versus maybe donating a little bit of money to a lot of different groups or 10 hours of volunteer time. I’m just curious, have you seen an evolution in your philosophy around community giving tied to this?

Jen Reed:
Right. Great question. Definitely, it’s expanded our community giving, but in a different way. We’re still making donations or sponsoring different organizations that are out in our community, but this is almost taking it to a whole nother level and something we haven’t done before. I’m assuming the other four credit unions haven’t either. But this is how we’re living out our philosophy or our purpose. As we tell people, “We’re standing with you through all waves of life.” Sound Credit Union, we are doing that. We’re listening to what’s going on in the community, we’re trying to understand, and then when we consider investing our members’ funds, how are we doing that to build a stronger community?

How is it going to make that impact? We can give $500 here and $500 there, but this is making an impact. This is making it so that we can ensure that more people have the opportunity to raise their family at an affordable rate in an apartment, or if it’s going to be a single family home, things like that. How are we offering these opportunities? I was so proud when I heard we were a part of this. In my eyes, it’s an absolute must that I think I’d love to see more businesses who can make the investment be a part of, try to be a part of the solution and help those that we’re serving.

Kerala Taylor:
Oh, I love that, Jen. I talk a lot at PixelSpoke about going beyond the big check, so to speak. You see lots of photos of credit unions presenting local nonprofits with big checks, and that’s wonderful. Absolutely nothing against that. But it’s really inspiring to see initiatives that might have a deeper impact or might have a more direct impact on the lives of real families in your area. It leads me to wonder just how do you think other credit unions across the country can follow your example? I’m actually not sure if funds like this exist in other major metro areas or if you have ideas for other credit unions who might be interested in just upping the ante as far as supporting affordable housing initiatives.

Jen Reed:
Yes. I think we are seeing the word is spreading about what’s taking place here and how leaders have all come together to collaborate, innovate, and really run with this. It’s happening successfully. We’re getting calls, not necessarily Sound, but the Seattle Foundation has helped launch this whole idea and bring it together. They’re getting contacted by credit unions and other organizations throughout the United States asking, “How do we do this?” It’s wonderful because this isn’t just a problem that’s here in the State of Washington and Portland. We know we’re hearing about it every morning. You drive down the street, this is a problem we can’t just turn our heads. As leaders, we want to help others in communities throughout the United States really launch this. If we have a playbook that we can share with them, let’s give it to them so that they can really implement these ideas in their own communities as well.

Kerala Taylor:
I heard through the grapevine that you’re getting ready to take on a new housing-related project this year. I’d love to know a little bit more about that.

Jen Reed:
Yes, we’re in the final stages of it. It’s a very similar project that’s actually going to be in Pierce County, so a little bit further south in Renton. This is in Spanaway, Washington, where it’s about 18 acres of lamb that they’re going to be taking over and putting 275 units of affordable housing for folks in that community. Again, it’ll be very similar where those who are able to occupy these units are at 50% of the median income in that area. It’s just another great way for us to help the community in that area.

Sound were… We stretch from Everett down to Olympia, but we’re serving everyone in the State of Washington. It’s really important that we are trying to touch all of these communities and help bring affordable housing to people who are living in that area. The nice part about where these units are being built, in both The Solera Project and then the new one that’ll be in Pierce County, is that when they’re being built, they are near rapid transit. The goal is to help make sure that there’s amenities that are going to benefit those who are living in that area. Being able to provide rapid transit, having grocery stores, childcare, things that are within walking distance for people, and then at the same time, there’s outdoor space that’s available so kids can go to the playground and play. There’s basketball courts, there’s different things for them to do that will help their family, and they’ll be able to connect with other families that are staying in these units that are there too.

Cameron Madill:
Awesome. Well, I was wondering, Jen, because I’m not sure we quite touched on this, is there any advice you would have for other people who are interested in similar projects, either successes, or failures, or learnings? Because I always feel like we see these really thoughtfully architected things at the end and it’s like, “Oh, well that looks inevitable,” or, “They really had their act together,” but I’ve never seen a project that didn’t have some bumps in the road along the way. I just was curious if you had any wisdom to share with folks out there who would be interested in considering something like this.

Jen Reed:
Sure. Definitely, and there’s always bumps in the road. When we started this, the first project, it began in 2021. Then we saw the supply chain issues that came in place and then inflation, and so the pricing and budget changed. There’s your bump in the road. We had to sit down and talk about it, and see how can we make adjustments to keep this project going. Being able to talk with the DFI for us was a big thing for all five credit unions. We had to make sure we were following the regulations that are in place for a credit union, and follow that appropriately in order to make sure we were dotting our i’s and crossing our t’s, and following the rules that are in place to make sure that we’re abiding.

That is our job as a financial institution. Rules are in place for a reason. We need to follow them. But I would really advise folks to talk with your regulators, make sure that they understand what you’re trying to accomplish, tell your story, and then make sure you’re doing everything that they direct you to do, and have open conversations with them too. Because sometimes maybe pricing’s going to increase and go over, but you need to keep this going, so how are you going to accomplish that?

Cameron Madill:
Great, thank you. All right, let’s pivot to some rapid fire questions. I know you’re a baseball fan. I got a real hardball first. Jen, what is your favorite ice cream?

Jen Reed:
You’re going to find this hard to believe, but I have never liked ice cream. I know, it’s mind-blowing. My family can’t understand. My husband took us on-

Cameron Madill:
We have to stop this podcast right now.

Jen Reed:
I know.

Cameron Madill:
This is a travesty. Really? Never, never?

Jen Reed:
Never.

Cameron Madill:
All right.

Jen Reed:
I know. My first date with my husband, he is like, “Do you want to go for ice cream?” I’m like, “No. No.”

Cameron Madill:
Well, I guess he recovered all right.

Jen Reed:
Yeah. I guess. Yes.

Cameron Madill:
What’s your favorite dessert?

Jen Reed:
I would say gummy bears. Not necessarily a dessert, but candy. It is a weakness. I know.

Cameron Madill:
You and my wife, I find them in cupboards everywhere at my house. All right. What is the best advice you’ve ever received?

Jen Reed:
The best advice I’ve ever received. Sometimes things just come at us and we can just respond quickly. Sometimes I need the 24-hour cooling off period. I tell people this a lot. It really helps to evaluate the entire situation. Sometimes I just need 24 hours to consider the whole scenario and then I might be able to respond to an email better.

Cameron Madill:
Brilliant. I remember the first time my sister was like, “Hey, why don’t you just sleep on it and see how you feel about that email tomorrow morning?” Good advice. What is a song, Jen, that you’re embarrassed to admit that you like?

Jen Reed:
Oh, well. I am a product of the 70s and 80s, and I would have to say You’re The One I Want by Olivia Newton John and John Travolta.

Cameron Madill:
Yeah. You like that?

Jen Reed:
Take me back to Greece. If it’s on, I’m going to be watching it.

Cameron Madill:
All right. Lastly, if you had to wear a baseball hat to every one of these baseball practices for the rest of your life with a single word on that baseball hat, what would that single word be?

Jen Reed:
Integrity. These are things not only that I tell my son, but anybody that I have the opportunity to talk to. That is my main word that I would say that describes me. Your integrity, it’s your character. It’s everything. Your name on the back of the… My PR is always on, whether it’s Sound Credit Union or the name of a team on my jersey, my last name on my back, you are always representing out in the community and make sure you’re doing it right. Integrity’s really important to me.

Kerala Taylor:
Jen, is there anything else that you’d like to leave our audience with? Any other thoughts about what we discussed today?

Jen Reed:
Yes. There’s so much going on in the world today. Being a part of a project like this is so important. It’s refreshing to know that there’s positive things that are happening in our communities, and there are businesses and organizations that are out there that are really trying to make a difference to help people. It’s an honor to be a part of this project. We look forward to more opportunities, not just project number two that’s taking place, but hopefully, we’ll have the chance to do more and stand with our members, employees, and communities through all waves of life, because that’s what we do at Sound every single day and we’re living that in what we do by giving back.

Kerala Taylor:
I love it, and I’m really looking forward to seeing what’s in the pipeline for you and what other projects you pursue in this area. Thanks so much for joining us, Jen.

Jen Reed:
Thanks for having me. Have a great day.

Cameron Madill:
All right, folks. Thanks for joining us again today. I’d love to share my key takeaways. The first one is just the depth of the affordable housing challenges that Sound Credit Union and their fellow credit unions in the area are facing. That with a median home price of over $700,000 in the Greater Seattle area, that they’re seeing a huge decrease in the number of members looking to buy a home as well as more people staying in their current home. The Evergreen Impact Housing Fund, the star of the show, so to speak, was created through the Seattle Foundation to create affordable housing units for individuals with less than 50% of the local median income, and focused on projects that are near public transportation and open public spaces. I loved hearing from Jen that really it’s less about marketing externally and more internally, that their employees really love and are proud to be a part of this project, and that they also at times have used it for an example of with unhappy or disengaged members about what it means to be a member-owned financial institution that is really rooted in and investing in the local community.

I loved hearing that credit union principal of cooperation among cooperatives has really inspired Sound and these other local credit unions to say, “What other opportunities are there to partner on these larger projects?” And that, as Jen said, they’ve really seen with their local legislators it’s a really powerful example of people helping people as the credit union difference in action. The Seattle Foundation, I think this is probably a key part, has taken the lead of the entire initiative. You can find them at seattlefoundation.org, and they have had other credit unions across the country country reaching out to learn more. Go to their website and dig in a little bit more if you’re interested.

Lastly, I appreciated Jen’s advice of if you’re interested in doing this yourself, always a wise move, talk to your regulators early so they know what you’re thinking about. Make sure you’re within the regulations for a direct financial investment and make sure to tell that overall story to your regulators, so that as your partnership progresses and you hit any bumps in the road, there are no surprises. All right. Thank you for joining us today for another great episode. Until the next time, I wish you all the best of luck in making your credit union remarkable.