Strengthening Community Resilience

Episode 8: April 15, 2021 | The Public Space

Adam Zimmerman, CEO and President of Craft3, shares the story behind the three-year, $5 million grant JP Morgan Chase awarded to Craft3, the Network for Oregon Affordable Housing, and the Community Housing Fund. He also details how they’ll use the grant to address affordability issues and combat gentrification in North and East Portland and also along the proposed light rail line in Southwest Portland.

Show Notes and Resources

How can we support and strengthen our communities in the face of rising housing prices and gentrification? Adam Zimmerman is the CEO of Craft3, a CDFI that is working to invest in communities and help them build wealth and resilience. Craft3, along with NOAH and CHF, was recently granted $5 million through JP Morgan Chase’s Advancing Cities initiative. They’ll use the grant to help finance local ownership of real estate and reduce displacement.

In this episode:

  • How they were selected to receive the grant (4:56)
  • The impact this funding will have (8:42)
  • Which neighborhoods they’ll focus on (12:15)
  • The challenges that come with their work (15:17)
  • Two key actions for nonprofits and community leaders (19:27)

Additional resources:

About Our Guest

Adam Zimmerman joined Craft3 in 2002 and assumed the role of President and CEO in 2016. He has been a member of Craft3’s executive management team since 2011, and before accepting the President role, served as Executive Vice President guiding organizational growth, consumer lending, external affairs and brand management. When Adam started with Craft3, the organization managed $8 million with a staff of ten, and his early work in rural economic development was focused on organic farms and food systems businesses.  

In 2006, with support from the Ford Foundation, Adam worked with nine other CDFIs to develop the Triple Bottom Line Collaborative and Scorecard. The elements of the Scorecard have been widely praised across the CDFI industry to gauge the rich economic, social and environmental impacts resulting from individual CDFI investments in private business, affordable housing and nonprofits.

In 2009 Adam launched Craft3’s energy loan program. In conjunction with the Cities of Portland and Seattle, this program financed home upgrades and provided millions in financing using on-bill repayment to service loans. In 2010 Craft3’s Home Energy Loan was recognized with the Wells Fargo NEXT Award for Opportunity Finance. The program has been touted as a model for energy-efficiency finance and has been promoted both domestically and internationally as a promising method for creating economic opportunity, promoting energy independence and reducing greenhouse gas emissions. 

Adam has been a featured speaker for C-40 Cities, the National Governor’s Association, Net Impact, Opportunity Finance Network, Climate and Energy Funders Group, Oregon BEST and the California Public Utilities Commission. In 2012 he was appointed by the Governor of Oregon to serve on the Oregon Growth Board. In 2013 Adam was recognized by the Portland Business Journal as one of the region’s “40 under 40” business leaders.  He is also past President of Oregon Tilth, one of the largest organic product certifiers in the United States. 

Adam earned his Master of Community and Regional Planning from the University of Oregon in 2002. He is an Eastern Oregon native and currently lives in Portland, Oregon.


Lilisa Hall: [00:00:00] Hi everyone and welcome to The Public Space, a podcast from the Nonprofit Association of Oregon. The Public Space is where thought leaders share strategic ideas and solutions that spark positive change in civil society. I'm Lilisa Hall, your host today for The Public Space, and in each of our episodes, we connect with experts from across the nonprofit sector and beyond to talk about the changing ideas, opportunities and issues that affect our communities.

Each conversation offers tangible steps that nonprofit organizations, supporters, and partners can take to better our communities. I'm excited to welcome our guest today, Adam Zimmerman President and CEO of Craft3. Hi Adam, it's great to have you here today and thanks so much for making time to be with us.

Adam Zimmerman: [00:00:54] Thank you for having me. I really appreciate it. 

Lilisa Hall: [00:00:57] You're welcome. So little about Craft3, Craft3 is a regional non-profit CDFI, which is a community development financial institution that makes loans to strengthen the economic ecological and family resilience in Oregon and Washington. Today's conversation is about transformational work that Craft3 and its partners are doing for and in our communities.

Craft3 is a nonprofit and Craft3 is a member of NAO. So thanks so much for being part of the NAO network. So late last year, Craft3 together with the Network for Oregon Affordable Housing and the Community Housing Fund received a $5 million, three-year grant from JP Morgan Chase. And the $5 million grant will address affordability issues and combat gentrification in North and East Portland and also along the proposed light rail line in Southwest Portland.

The funding is part of JP Morgan Chase's Advancing Cities Challenge, which is part of its economic development initiative across several cities. And Adam is here today to tell us more about this exciting initiative. But first, I want to tell you a little about Adam. Adam is the President and CEO of Craft3, and he's been President and CEO since 2016. And prior to that, he served as Executive Vice President, where he guided organizational growth, consumer lending, external affairs and brand management. And he's been with Craft3 since 2002. 

So welcome again, Adam, to The Public Space. So nice to have you here with us today. Adam, could you share a brief overview with us of Craft3? What it is, what does it do and who does it serve? 

Adam Zimmerman: [00:02:46] Sure. And thank you for, for having me and asking. It's a good question because sometimes the "Community Development Financial Institution," big mouthful loses what we are, which is we're essentially a loan fund and we're a regional one and we make investments in communities across both states.

We're 25 years old at this point, the organization got it started in Ilwaco, Washington of all places. And we still have an office in Astoria. The rest of the footprint is across both states. So we go from Port Angeles, Washington, all the way to Klamath Falls. And, uh, we're in the Walla Walla Valley, just on the North side of the state border, but I'm originally from Milton-Freewater.

So Umatilla County has a soft spot in my heart. And we work out of course, Seattle and Portland. Largely, we find community development projects and businesses that need investment, and we try to make it work. The roots of our work, in large part, started in the 1960s, where, during the civil rights movement, there was a, a realization that minority communities, Black communities, what we now call BIPOC communities, uh, really struggled to get access to capital.

And that the financial system, as it was, was not accessible. And so organizations like ours have roots in how do we make capital more accessible to communities that may not otherwise be able to work with the banking system or other more conventional financial partners? 

Lilisa Hall: [00:04:25] Okay, great. Thanks for setting the stage for us in terms of, you know, what Craft3 does and, and who you serve. So tell us a little more about the Advancing Cities grant, that Craft3, the Network for Oregon Affordable Housing and the Community Housing Fund received last year. Tell us a little about what it's for and how is it being invested in communities. And also I'm interested to kind of share with our listeners, you know, how were you all selected to receive the funding from JP Morgan Chase? Which is a big deal!

Adam Zimmerman: [00:04:56] Sure. It is. It's a huge deal. And it's a huge deal for uh, Portland Metro. I don't know that in my recollection, a CDFI that works in Portland metro has gotten this kind of support from a banking institution like Chase. To back up one step, our balance sheet, if you will, a big portion of that is debt that we borrow from others to make the kind of loans that we make um, in businesses or in nonprofits or, in some cases, in households and the type of institutions on our balance sheet are varied, but a lot of them are banks and the banks work with us to put money into communities that they, um, have challenges to serve, honestly, because they are regulated institutions that have to follow very strict rules to keep all of our deposits safe.

So our role is to sort of take the resources that banks can make available and put them into communities in ways that benefit the communities and also leverage the capacity of the banks to, to channel money and, and our know-how. We have been working with JP Morgan Chase for years, you know, those of you who've been around a long time remember that they absorbed Washington Mutual after the last recession. 

So they've been an active partner in the Northwest for many, many years. The advancing cities work is their effort to use, uh, different urban environments as laboratories for community development innovation. And so our conversations with them started several years ago about the kind of work we were doing with small business finance, the kind of work that we were doing around, uh, displacement and gentrification and our thoughts around how accessory dwelling units can support providing more affordable housing in urban areas where ADUs are legal. 

So it was a long conversation, honestly, multiple stages. I think we revised our proposal several times. The work is out of their foundation, which is a national foundation, but it has representatives in the Northwest, primarily in Seattle, but they wanted to see if they could make an investment in the kind of anti-displacement and anti-gentrification work that we were talking about in Portland specifically.

And I think part of that has to do with, among West coast cities, those of us who live here and I live in Southeast Portland, among West coast cities, Portland in some ways still has more room to maneuver than some of the places that have gotten more and more expensive. So the work that we proposed to Chase and ultimately they funded was based on the premise that intervention in neighborhoods with capital using those themes of community wealth building and anti-displacement was something that, back to the idea of innovation, was something that maybe we could show was possible. 

Lilisa Hall: [00:07:59] Yeah. So, you know, as you think about implementing this, this initiative and the work that you're doing with, uh, your partner organizations, what are the impacts that you see the program is going to make in the communities and in North and East Portland and along the proposed light rail, uh, section in Southwest Portland? Tell us a little more about the impacts it's going to make on people's lives. How is it going to transform people's lives? What are some of the, you know, more medium/long-term positive impacts that it's going to make on the BIPOC communities and the individuals living in those communities?

Adam Zimmerman: [00:08:42] Craft3, NOAH and CHF, um, the three partners CDFIs in this had been working in Portland Metro for many years and with different partners on the ground and making millions and millions of dollars in investment. And what that has allowed us to learn is where the challenge is really happening is in some of these neighborhoods that I would say are largely characterized by market rate affordability and where people with lower to middle incomes can afford to rent not only apartments or houses, but also commercial space and that those neighborhoods and, and the Southwest corridor was particularly interesting to us because it is a pocket of Portland that has a number of these post-war up through the seventies apartment complexes that are relatively affordable. 

And what we have started to see is that those properties are being purchased in some cases by out of state investors and that the rents are going up. And part of that also covers commercial spaces. It's a disturbing trend from the perspective of, again, looking at Portland as a major metro that has pockets of affordability and what we would do when those pockets start to disappear. And I think you can look at what's happening in Seattle and the Bay Area as examples of where people really struggle to find affordable housing. So the idea was could we intervene and help finance, you know, I'd just say local ownership of some of these properties?

And our hope is that that accomplishes two things. One is, it does allow communities to, uh, gain a foothold through ownership. It allows local owners, whether they're affordable housing owners or others, um, to manage costs and manage rents, uh, more effectively.

And the thing that I'm most excited about from Craft3's perspective is the idea that we can invest in small businesses to own their own real estate. You know, there's a lot of debate about gentrification and whether or not you can slow it down. And, um, I'm of the opinion that it's really hard, but I'm also of the opinion that, for communities that are starting to experience gentrification, there's an opportunity to generate wealth for the people who are living there now. But the way that you can do that is by giving them access to capital and allowing them to invest in the real estate market, allowing them to invest in their businesses, allowing them to invest in their homes.

So if values do rise, the appreciation is accruing to the people who've always been there and not the people who were able to enter the market later and reap the benefit of the rising tide.

Lilisa Hall: [00:11:54] Yeah. Great. So Adam, just taking a step back, can you maybe give us a sense of where that, that area is for, for listeners who may not be, you know, from the Portland area, so when we say North and East Portland, sort of what, what area we're looking at and, and along the proposed light rail in Southwest Portland? 

Adam Zimmerman: [00:12:15] Sure. So most of the more affordable housing stock remaining in Portland -- more affordable is kind of subjective --  but it is East of the Interstate 205. So what we would call East Portland, um, in my mind is, is that area, and then within that there are neighborhoods, uh, Rockwood, Rosewood, Gateway that are all relatively tight knit places, but there, where there has been a lot of in migration, as people in Metro are moving around, or people are moving in from elsewhere and they're looking for more affordable places to live. To some extent, that is true as well in Northeast Portland and what we call the Cully neighborhood.

What's interesting about, I think, especially interesting right now about Cully as well as the Southwest corridor is, I would consider those two neighborhoods right up against kind of the gentrifying trend that's happening in closer to downtown. And real estate prices are starting to creep up and you can see it and properties are starting to move and have been for probably the better part of the last decade, certainly since the recession.

So those are the neighborhoods that are most interesting to us from a, "what's happening in the larger Metro economy?" The other thing, though, that I think is really part of this proposal is the people who live in those neighborhoods know them best. They know where the real estate is. They know how the neighborhood interacts with itself around housing, around commerce. And so they're the ones who are on the ground and probably able to make the best decisions about what's most valuable, where should investment be directed. And part of this proposal is building partnerships with both financing and support for outreach to improve the overall, I'd say, access to information about what investments might be possible.

We recently had a conversation with a nonprofit that works in Gateway. And they have a piece of property that they own, but they also have a piece of property that they are interested in buying. And that's the kind of conversation that I hope we can catalyze because we would like to make that more possible.

Obviously, when you get down into the details, everything's challenging, you know, properties that look affordable might be because there's an old buried, uh, fuel tank from a gas station that no one remembers or a dry cleaner, or, you know, we're working in inner city, uh, Metro areas that have a history and sometimes things get more complicated when you get under the surface and if we can help gain site control of some of these places and neighborhoods for community groups or local businesses, then I think we're making progress that, that hopefully we can share and learn from. 

Lilisa Hall: [00:15:17] Yeah, great. I think you answered a little bit of this, or at least you touched on this a bit, but you know, what are some of the challenges doing this, this innovative work? Because innovative work and transformational work is, you know, it's not smooth sailing. So, uh, what are some of the things that, that you're dealing with and how can potentially, you know, organizations and communities help you support, you know, Craft3 and, and your partners. 

Adam Zimmerman: [00:15:41] Well, you know, our job is really to support them. The most challenging thing in all of these, uh, efforts when you're using debt and capital is it's risk and we're putting resources and -- when I say we, I mean the Royal "we," I mean the borrowers, the communities, everyone who's taking a step into the, into the water, so to speak and, and trying to make a transformational transaction happen is taking risk and that can be scary. It can be done wrong. It can be debilitating. Part of this proposal along with multifamily housing investments and commercial real estate investments is again, this idea of investing in accessory dwelling units.

So that homeowners, people who are lucky enough to be homeowners, can invest in their property and potentially create a new unit where one wasn't there before. In what have historically been single family zones. But we never want to be in a position where we have enabled a household to take on too much debt. So it's a conversation about what's the right amount of a loan? What's possible in the construction market? And what's the future of the unit? Is it for family members who might have medical issues or otherwise just need closer care? Is it children? Is it income generation? 

So I think the most challenging part of all these conversations is making time and space for those conversations and, honestly, a lot of that moves at the speed of trust. So what we have been trying to do, and we're just getting started, this grant was announced in the fall. We're just now getting our different agreements on the ground and understandings about how we're going to do this stuff. For those of you who are in nonprofits, you do development, you know, you, you apply for these things and you wait and you wait and you wait, and then someone gives you a phone call or sends you an email. And they say, "Hey, we're going to give you this big chunk of money." And you're, "Great. I was waiting on that for a long time."

And so we've been spinning up and it is a lot, $5 million is nothing to sneeze at. And so we've been spinning up the ways that we are going to manage the investment and it's a three-year grant. So we have some time. And part of that has to do with who can be our partners on the ground. And a lot of that has to do with building trust, having conversations. Again, what we don't want to do is upset the equilibrium or some other situation in a community that's already working by maybe unwittingly, but still, showing up and saying, "Hey, we're ready to write checks for real estate." In terms of helping people invest in real estate that can cause a disturbance in the force to some extent. So we want to be careful about it. And fortunately, given that this is a three-year grant, we have time. 

Lilisa Hall: [00:18:58] Great. Thanks. And so, you know, as, as we kind of think about what two or three actions that nonprofits and community leaders can take to make positive and transformational changes in people's lives, I mean, this is certainly one major way in which we're doing this. Are there other actions that you think people can take to, you know, to help make positive and transformational changes in people's lives? Um, what are your thoughts from a Craft3 perspective Adam? 

Adam Zimmerman: [00:19:27] I've lived in Oregon most of my adult life, in both rural and Portland Metro and Eugene. Oregon is a wonderful state. We sometimes don't talk to each other enough. There can be a little bit of turfiness in some cases and, you know, it's funny for, uh, running an organization like Craft3, which is largely, we're largely a tool, we're an investment tool. And we enable our borrowers to do the wonderful work that they're aiming for.

And so, because of that information is our currency, and so the more that I think nonprofits in this state can share lessons learned, talk about their work... this podcast is a great example of that and can build on sharing information, but also trusting that we can learn from each other. That's one thing that I really want, want to see accelerate.

There's um, a handful of wonderful CDFIs in Oregon, MESO, Community LendingWorks, uh, just to name a couple. Sometimes we, we all get the same business application at the same time, and we've had the conversation where we want to make sure we check with each other because there are so many businesses that need support in this state. We want to make sure that we're not duplicating efforts. And so I think that kind of conversation is really critical. 

And then the second thing I would offer is that in the context of this effort about real estate, about housing, about commercial ownership and commercial real estate affordability, site control is power and it is not limited to investors and otherwise housing organizations. I think nonprofits that are thinking about what their balance sheet looks like and can they invest in real estate and what the long-term future of that real estate is, even if they're not necessarily going to need it for 20 years, how it could be used in the community. Those are wonderful conversations to have.

They can be big and scary. And a plug for us is that we have supported a number of nonprofits in buying different assets and we're happy and willing to have conversations about the art of the possible. 

Lilisa Hall: [00:21:51] Thank you so much for that, Adam. I sure appreciate it. And really appreciate all the work that you and your team are doing to support inclusive commercial and residential affordability and neighborhoods stability in our communities.

Adam Zimmerman: [00:22:04] Well, thank you very much for having me and I really endorse and am excited about the fact that you all are doing this series of podcasts. So it's wonderful. Thank you. 

Lilisa Hall: [00:22:13] I hope this conversation has inspired organizations and people to think about what actions they can take to collaborate and make tangible changes in our communities. For more information about Craft3, check out 

The Public Space is a podcast from the Nonprofit Association of Oregon. NAO is the statewide nonprofit membership organization representing and supporting charitable nonprofits of all sizes, geographic locations and missions across Oregon.

Visit and sign up for our newsletter for more information about membership, resources and our great network. This episode of The Public Space is produced by Anna McClain.


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