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Key takeaways:
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Coldwell Banker President and CEO Ryan Gorman realizes: “We don’t have the diversity we’re looking for.”
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The Coldwell Banker initiative aims to increase diversity among its franchisees to better serve Black communities and raise minority homeownership.
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Participants will enter a mentorship program with other Coldwell Banker franchisees to learn how to set goals and grow their business.
When Ryan Gorman, president and CEO of Coldwell Banker Real Estate, attended the National Association of Real Estate Brokers’ convention in Atlantic City, N.J., last August, attendees were surprised to see him. Despite his being part of the oldest minority trade association in the country, NAREB members weren’t used to seeing an executive from a national brand investing time in their organization’s events.
Gorman began a dialogue with the 2020 president of NAREB, Donnell Williams, broker-owner of Destiny Realty in Morristown, N.J., on how the two organizations could work together to tackle some of the biggest issues facing Black Americans in real estate, including lower-than-average homeownership rates and underrepresentation of people of color leading real estate companies.
“If you want to further their career, you have to prove yourself in sales. How are you going to prove yourself in sales if your sphere doesn’t own enough property?” Williams says, pointing to the housing wealth gap. “Someone has to give people a shot.”
Doing something about the leadership disparity is part and parcel of the effort to drive minority homeownership, the two men agreed.
“We need to take significant and bold action if we are to change our industry, and certainly our company, to have a broker-owner population that’s reflective of the communities we serve,” Gorman says.
In February, Gorman and his team launched Coldwell Banker’s Inclusive Ownership Program. Under the initiative, minorities, active service members and veterans, women, and members of the LGBTQ+ community interested in owning a Coldwell Banker franchise will have their franchise fee waived ($25,000), plus receive $25,000 in startup funding—up to $100,000—for each of the four diversity categories they belong to.
Not Great Numbers
The data on how many Coldwell Banker broker-owners currently belong to one of these groups is imprecise, Gorman admits. However, based on self-reporting and his own observations, “too few [broker-owners] are identifying as members of these diverse groups. Within the Coldwell Banker ranks, we don’t have the diversity we’re looking for.”
Inequalities in the real estate industry impact the community at large, Williams says. “It’s hurting our ability to create wealth,” he adds.
The Great Recession exacerbated the problem, driving many smaller brokerages, including minority-owned brokerages, out of business. As large, established brokerages swallowed up the competition, diversity decreased, Gorman says. And now, the COVID-19 pandemic has made this a challenging time to start a small business.
Among the chief goals of the program to increase the number of Coldwell Banker franchises that are owned by racial and ethnic minorities, particularly Black individuals, Gorman says. By increasing the diversity among broker-owners, the brand also hopes to better serve Black communities and help more Black individuals become homeowners.
“When we launched this program, I couldn’t have foreseen the COVID-19 pandemic, nor the acceleration of the Black Lives Matter movement now sweeping the country and globe,” he says. “However, both events underscore how important a program like this is right now. The real estate industry today is looking at how to increase diversity and inclusion among brokers, agents, and clients. That is certainly something we’ve been thinking about at Coldwell Banker for some time, and we are pleased to see the discussion broaden and deepen among our industry peers.”
The company has received an overwhelmingly positive response from the initiative, Gorman says, including calls from independent brokers and potential broker-owners “every day.” Some have told him they never thought a large company like Coldwell Banker would want a small brokerage to be part of their brand.
“There’s a misconception that Coldwell Banker is a big-company brand,” Gorman says. “But one thing people don’t realize is those companies weren’t big when they met us. We’ve grown those brokerages in partnership with us.”
The company has already welcomed its first two affiliates into the inaugural class of Inclusive Ownership Program entrepreneurs this summer. One brokerage will partner with Coldwell Banker in Southern California; the other brokerage is in Nebraska. “There are many more amazing real estate entrepreneurs who are currently in the pipeline to become a Coldwell Banker affiliate as part of the program,” he says.
Beyond the Financial Incentive
Creating the program was a team effort, involving both corporate staff and current broker-owners, Gorman says. The team came up with a list of what an aspiring broker-owner or small, independent broker would find useful. In addition to the franchise fee waiver and start-up funding, the program also includes royalty fee rebates for the first two years of business and complimentary membership in industry partner groups, such as NAREB, the National Association of Hispanic Real Estate Professionals, the Asian Real Estate Association of America, and the National Association of Gay & Lesbian Real Estate Professionals.
But the biggest draw may be the program’s mentorship program. Each participant will be paired with three mentors. Gorman himself will help with goal setting. In addition, participants will have a mentor from within the company-owned brokerage who has achieved what they’re trying to achieve and a franchise broker-owner who can help them navigate the Coldwell Banker system.
Gorman recently spoke with an African American woman who’s also a veteran and works in a market near a military base. Since she ticks off three of the diversity boxes, she would qualify for $75,000 in start-up funding, in addition to the other incentives. But having previously tried to open her own brokerage, it was the mentorship resources that piqued her interest, Gorman says.
Within a year, Gorman hopes to have at least a dozen new broker-owners on board and plans to track how that first class of franchisees has grown their companies. “We can then make that a baseline to help gauge success in the years to come,” he says.
Doing the Right Thing
The Inclusive Ownership Program was in the planning stages before last fall, when Newsday published the results of its three-year investigation revealing clear patterns of steering and unequal treatment of minority home shoppers on Long Island, N.Y.
But the release of that troubling report has lit a fire at Coldwell Banker and throughout the industry—and the Black Lives Matter movement has reinforced the urgency to address issues of inequality. Gorman says he and other Coldwell Banker executives have continued conversations with NAREB leaders, as well as leaders and staff at the National Association of REALTORS®, which recently announced its own fair housing action plan and implicit bias training. The plan shifts NAR’s focus from awareness to accountability, culture change, and training.
“It is my hope that we treat this not as a moment to merely talk more about diversity and inclusion, but is the beginnings of a movement in which Coldwell Banker and the industry will make real strides,” Gorman says. “We are approaching the starting line, not the finish line.”
While Coldwell Banker’s Inclusive Ownership Program is focused on fostering entrepreneurship, it has equal access to housing at its core.
“I feel very strongly that one of the biggest things we can do to deliver on the promise of fair housing is to have professionals—trusted advisers—working within those communities, helping people understand that homeownership is a possibility,” Gorman says.
