When Community Comes First in Multifamily Development
As MHN observes Black History Month, we talk to Genesis Cos.’ founder Karim Hutson about his dedication to transforming neighborhoods.
In the early 2000s, Karim Hutson decided to switch to a career in real estate to make a difference in the community he had deep ties with. To embark on this journey, he founded Genesis Cos. in 2004, which has grown into a full-service real estate development firm that specializes in financing, developing and operating mixed-income and mixed-use residential projects across New York and New Jersey.
Over the past 18 years, Genesis has built a reputation for redeveloping underperforming assets and turning them into quality and energy-efficient properties that transform neighborhoods while remaining accessible to residents.
As the founder & managing member of Genesis, Hutson talks about his origin story and reveals how his business philosophy changed over the years. He also shares details about one of his most important current projects: the redevelopment of the 42-building Frederick E. Samuel Apartments in Harlem. Built at the beginning of the 20th century, the massive property will be renovated by 100 percent Black-owned firms with deep roots in the Harlem community.
What led you to a career in real estate? Was it an accident or was it something you’ve always been fascinated about?
Hutson: Before getting involved in real estate, I was in finance. I was an investment banker at Goldman Sachs and a private equity investor at General Atlantic Partners. I liked what I was doing, but I didn’t really love the field I was doing it in, which was technology. I knew that if I really wanted to be successful, I had to do something I was passionate about. That led me to leave private equity and go to Harvard Business School.
While I was in business school, I really considered what my personal strengths were and what made me excited, and that’s how I landed in real estate. I felt like it was a perfect marrying of my investment and finance acumen with my people skills and desire to be involved with the community. I also knew that I wanted to do real estate in the city I grew up in, which was New York.
Back in 2003 and 2004, when I was still in school in Cambridge, I used to get on the bus once every couple of months and go down to community board meetings in Harlem and learn about the developments and the different visions people had for the neighborhood. That’s when I met my first mentors and employers in real estate, two developers at Full Spectrum, a company which was at that time the only—or certainly the most successful—all-Black development firm.
I became vice president of development at Full Spectrum and worked on several projects with the company. I believe my success was born out of this opportunity.
How did you come up with the idea for your firm? How has your business philosophy changed over the past 18 years?
Hutson: I had two friends in real estate who were urging me to go ahead and start something. I have actually started Genesis in a cubicle of a friend’s office who was doing storage. My focus was on urban communities, where I felt like I could bring some know-how to the development table and see if I could get some deals done.
My long-term vision was to create long-term value—hold assets for a long time, create recurring cash flow and to make a difference in these communities and to do it in a way that is better than how it had been done.
I think the general thought process has not changed a lot, except that the methodology and the road to get there probably turned out to be different from what I imagined. I had to constantly look at my business model to reshape it and retool it to figure out what’s the best thing for us to do.
When we first started out, we were a general contractor and developer. However, we had to think about what we were the most effective at, so we decided to move to development and focus on developing affordable mixed-income housing. At the time of the 2007-2008 downturn, our decision made a lot of sense because affordable housing was an area that had a lot of perseverance in the face of the crisis.
How would you describe the affordable housing situation across New York City? What is your approach to this issue?
Hutson: Affordable housing isn’t something that’s solely needed in New York City, it’s an issue probably in every city in America. I think we need to continue to look at ways to make these buildings healthier, more efficient and more sustainable for the people who live in them. I think the industry has done a good job in trying to move in that direction, in terms of sustainability and green approach, and we have to keep pushing.
I always tell people that we need to look at affordable housing holistically. The affordability issue is bigger than the need for more affordable housing supply. We have to actually deal with the situations that people who live there are dealing with.
Genesis generally advocates for the need to get out of the affordable housing silo, and besides pursuing subsidies and more innovative programs, we have to deal with the issues that are affecting people, whether it’s education or criminal justice or other problems.
Your portfolio includes 49 developments in the Harlem area. Why did you decide to focus on residential buildings, particularly in this neighborhood?
Hutson: Rental housing is something that many people need and that’s where you can make a huge impact. That’s how my family grew up, we lived in rental housing in the Bronx and in Harlem. My parents were raised in Harlem, so it’s always been a special place to me. It’s a place where I wanted to make an impact, so that was a clear focus point.
I am also a big believer that investments and your work should make sense to you, and I felt like I understood these areas and that it would allow me to be more effective in those communities. They weren’t outside communities for me, it wasn’t like I had to read a research report to understand what was happening, I was living it. I think that’s part of the beauty of being a minority business enterprise (MBE) developer and a local MBE developer, that you can say those things and that makes a difference.
What are the top challenges of developing or redeveloping properties in Harlem?
Hutson: Firstly, it’s the lack of available land. Additionally, the processes around development and construction are very intense and time consuming. It takes a long time to get things done and get things built. Even if you know that there are things that need or should get done in a community.
Another issue that’s specific to Harlem is that there are a lot of people who have been living in inhumane or below-quality standard housing. We need to increase the quality of the housing. It’s an issue that needs to be addressed.
The New York City Housing Authority selected Genesis Cos. and Lemor Development to repair and enhance Frederick Samuel Apartments, which houses nearly 1,400 residents across 660 apartments. Why is this project important to Genesis?
Hutson: It’s an important project because it’s the first 100 percent MBE development team that’s been selected by NYCHA to upgrade this community. It’s a Harlem-based development team and the tenants were very active in the selection process. That says a lot about who the community would like to see develop these housing and the faith that they have in MBEs and local developers to get it done. I think that’s important for us and for the general affordable housing community to be aware of.
Secondly, we need to do something about the conditions these people are living in, so we take it very seriously. Genesis has an obligation and opportunity to make a difference in people’s lives.
Has work on this project already started? How are things progressing?
Hutson: We’re in the pre-development phase. We’re going to start inspections of the building and putting together plans in the next 30 to 60 days. After that, we expect that in 18 months we should hopefully begin to start renovating these homes and building up this community.
What are some of the specific building upgrades you plan to implement?
Hutson: We plan to turn this community into a high-quality and sustainable affordable housing portfolio. We want to do everything we can to keep it affordable, to make it healthy and improve the public safety in the buildings. We want to make sure the residents are living in upgraded condition. Some of the upgrades will include new roofs, facade work, new variable refrigerant flow systems and solar panels.
We also plan to implement new programs for the community center to make sure that we are servicing the tenants right in the portfolio. We’re working with nonprofits to promote healthy eating and local gardening. There’s also a mural project, which will be painted by a local artist. It’s a fantastic opportunity to not only do quality housing, but to do some great community building initiatives, which go beyond just the four walls of a home.
Genesis will also manage the property. What is your philosophy when it comes to property management practices?
Hutson: One of the things that we have been focused on is tenant relations and community engagement. Property managers must create a livable situation for the tenants and maintain that and make sure that they are equitable and that the standards are ensured. Everybody is accountable: We’re accountable and the tenants are accountable. We’re trying to listen to issues and solve them and be responsive. Overall, two of our main goals are to be responsive and create a high-quality living environment.
Finally, what advice would you give to someone starting out on a career in the real estate industry?
Hutson: The advice I would give is when you think you thought big, think bigger. Realize that real estate development at a real successful level is complex. Understand the risk, but don’t run away from the risk.