Joshua Millsapps, Clarence Buck
All right, Buck. I appreciate you coming in here today and talking to me a little bit about you, and the Inspection Group, and a little bit about your business, some of the things that you guys are doing. You know, I think with all these things, getting a better understanding of who you are and how did you got into the inspection business is a good place to start? How does that tie across to the Inspection Group? How'd you get linked up with those guys? Can you give me a little bit of background just about yourself about and the business you're in?
The Inspection Group actually started in 97. Most of us was had some kind of construction background, our founder, Saul was part of the original Mobis group, when they started to develop HUD REAC, and they were doing the developing UPCS and developing the protocol. I had been in construction and got into code inspections, because my body was starting to fail as many people in the construction business. After a while, you start to thinking about easier ways to make a living. Plus, I ran into Saul a couple months after he started the company. He had found when he started doing the REAC inspections that it was kind of giving the housing authorities a test without telling him what chapter the test was on.
So he saw the opportunity for education to help the housing authorities understand to help them prepare to be aware of what's going on around them and in the process, to help them be better aware of their responsibilities for taking care of the properties and how to maximize how to use the information to maximize your resources. I was actually going to try to get another customer from my own little business. And that customer said, “No, I don't need your services, but I'm gonna have someone I want you to talk with.”
He dials his phone and says, Hey, so I got some guy I want you to talk to and hands me the phone. I have no idea who Saul was. And I said “Well, sir, I'm not sure what this is about.” But he just handed me the phone. He says “Tell you what call me back at his number and we'll talk later.” So I've been with the Inspection Group ever since. This was just a couple months after it was founded. But so we went from doing inspections and education and branched out into some other kinds of inspections. I was doing some section eight inspections, the HQS housing quality standards inspections as well. We kept doing that in in conjunction and then just grew from there.
Joshua Millsapps 13:41
Then you mentioned that HQ s inspections and you also mentioned UPCS, a little background for those of us that aren't as familiar
Clarence Buck 13:53
Well HUD likes their acronyms, you know, I think all government agencies like they're acronyms. But the housing quality standards are the kind of the foundation for all of them now is they were brought up brought about to help when the section was the section eight program. And for the idea was to be able to utilize housing and communities there already. Housing quality standards were the basic minimum standards that a house or apartment had to meet to to be acceptable.
They used the same standard for public housing for years. The problem is it's very unit centric. So it didn't work real well with public housing and tax credit housing because the HUD had a financial interest in in that property. Where housing HQS is primarily privately owned property that is privately owned property within the community. In public Housing and tax credit housing the government has some financial interest in it, whether they own it outright or whether they hold the mortgage. We want to make sure that the asset underlying that loan, or that financial commitment still continues to exist, while we're making payments on the end, you don't want to end up upside down. So without getting too far into the weeds on that they developed the uniform physical condition standards, which sought to not only measure the quality of the units to quantify the quality of the units that the people lived in, but also quantify how the property was being maintained overall, you could have a beautiful unit inside of a building that was crumbling.
Or you could have a beautiful building with units that were in poor repair. So, we've been trying to work on that balance ever since. But they developed the uniform physical condition standards. Now, a couple of years ago, they decided they wanted one standard to take care of them both. So, they started adapting the housing quality standards, updating them to be consistent with the uniform physical condition standards. They were doing a demonstration on that. And then we had this little problem with COVID. And that kind of put the brakes on everything for over a year now.
Joshua Millsapps 16:58
Are you talking about UPCS-V there? Are you talking about NSPIRE?
Clarence Buck 17:02
Well, it was UPCS-V and NSPIRE kind of came up during that time period. Right, it, you know, is almost like the perfect storm of events, when they were trying to make the, the UPCS-V was to bring HQS in line with UPCS. But at the same time, they started developing UPCS to, to go from less about the buildings and more about the units.
Joshua Millsapps 17:34
Okay, so all of it sort of funneling towards, hey, we'd like to do this one way. But we'd like it to kind of balance, you know, the units inside the building with what's outside the building,
Clarence Buck 17:49
Naturally, and it's tricky. It requires some constant adjustment. The important thing to remember is, it's always about being at keeping the unit safe, and decent, and sanitary, you know, nothing too complicated there. But when you start to develop a standard that is equally applicable in New York City, as it is, in Honolulu, Hawaii, or the American Virgin Islands, it starts to become a little difficult to, you know, make everything balanced out consistently. And then to quantify it in such a way that it provides useful management information.
Joshua Millsapps 18:39
It seems like it's a huge challenge. I mean, you kind of hitting on the, you know, the different locations and you know, you're there's a, there's a huge difference between something New York City and maybe a more rural environment. And then you've got all these people involved, too. You know, so it's at the end of the day. It's a perfect storm, it's a person that's in there doing that inspecting, and so you can come out with numbers on the backside, but I'm curious, how do you make sure that that you're able to deliver pretty even results?
Clarence Buck 19:19
Computers make it a lot easier. And of course, as the technology evolves things change. From incorporating pictures, etc First and foremost it's finding good people who are committed to following the rules and understanding them and not just doing the bare minimum in their job. They also have to understand the technical aspects. They have to have some ability with the computers or in HUD speak the data collection device, the DCD…a tablet computer of some sort. And then They also have to have the personality to be able do the work. We can't forget that we're always entering someone's home. And the old principles prevails, no matter how humble, a home is still a very personal place, and we're almost trespassing. We have a reason to be there, it's not malicious at all. But we have to have people who appreciate that and who appreciate it all. This includes the great variety of cultures that we have in our country. And so it takes some very special people, I'm very proud of our people. In fact, that's our our greatest asset. We have people that are able to do those things, and are very committed professionals.
Joshua Millsapps 21:05
You know, I tend to agree with you, I feel the same way. You know, for us, we're more on the technology side, but as you know, delivering great product or service…the people are the foundation of all of that and being able to get the right folks on board. Working, as a team together when you get the right fit, it's pretty special. And you guys have been at this a long time, and you've been able to keep people adhering to those high standards for quite some time.
Clarence Buck 21:42
We can't discount the technology as a partner, too, I was telling you earlier about my first computer, I used Tandy at 8080 and you could tell the world was changing. I knew my body was changing, and I better figure out a better answer. But what we do today, in housing work, what the real estate Assessment Center does, what HUD is trying to do, what your whole business is about, didn't exist until computers became small and portable. The ability to go in the field and quantify something that is essentially qualitative, you know, yeah, we can do that. And we can manage that information in such a way that it becomes useful. If you're just filling and making checkmarks on a piece of paper, and you get stacks of papers. That’s pretty much it. I've been in housing authorities and other businesses where their record room is huge, it's a boxes and boxes and boxes of papers, with the computer that's no longer necessary, and then we can compile that information in a useful way and analyze it. That only exists because the development of small portable computers,
Joshua Millsapps 23:18
The way you put that is really interesting, I never thought about it like that. We kind of came into this, when technology was already a huge player in making this happen. I never considered that when folks got this program rolling at the very beginning, they were really creating something new under the sun in a lot of ways. The transition makes me think a little bit about where you were you talked about the ability to aggregate the data, and to do the scoring and things like that, and I never thought about what a what a huge leap that what must have been for folks when they were coming up with UPCS. It's kind of almost like a moonshot for housing. You know, they were really changing things from individual units on paper to “Hey, I'm going to be able to look across the entire country at all of this housing, and understand where my problem areas are and, manage things more as a portfolio as opposed to a whole bunch of little problems that you're trying to fix all over the country.”
Clarence Buck 24:45
Exactly, exactly. It makes the information us we're no longer of compiling information for the sake of compiling information. Years ago, in this business I just hated reports because I knew they didn't get read. Which didn't put didn't create a lot of enthusiasm in me for writing the darn thing, you know. But now we can actually make use of that information and the Secretary, and the deputy secretaries can all look at that information and say, oh, here is a quantitative way to look at housing in Hawaii. And housing in, in New York, or housing in Cleveland, or in housing in Meigs, County, Ohio, it's a very rural county, if you're not familiar with, I have a request for quotes that just came in about a half an hour before we started talking. So I haven't studied it. It's for housing quality standards inspections in in Montana. Okay. You know, so you're talking about a large geographic area with a very small population, proportionally.
Joshua Millsapps 26:04
So you've been involved in this for a really long time. Do you think housing quality has gotten better over time under the under these standards? Or that this is has sort of put a floor under under things? How do you see that arc over time?
Clarence Buck 26:24
I think it has gotten better. It's given a tool to now, you know, particularly on section eight side, there are a lot of landlords that don't want to participate, because they just find the rules too restrictive. But I have to tell you, every time I speak with a group of landlords, I challenged them to go through the standards together. So which one of these standards is too restrictive? You know, how many exposed wires should we allow in a house? You tell me? And they look at and they go “Okay, okay, I guess you got a point.” Because they are in business and they're providing a product. They have an obligation to make sure that the product is at least safe, you know and functional that it it keeps the weather out and keeps burglars out, you know, provides some sense of security so that that family can be safe, I think. That line of thinking is a bedrock point of view for us. That the value in our company has always been that without a safe, decent place to live civilization can't grow. You think about the history of mankind from the hunter gatherers who were constantly under threats of starvation and print predation. Up to the time we started have caves, they could build a fire, they could cook their meat, you know, they can make a piece of furniture because suddenly they had some time and a place to put it, you know, so they made that rock shaped it a little bit better for their bottoms to sit on around the fire or whatever. Culture evolves around housing.
Joshua Millsapps 28:31
If your need for shelter is not met, it's hard to focus on too many other things.
Clarence Buck 28:36
You're not going to be terribly artistic or or, or creative. You might be pretty creative, but not in a way we would like. Culturally, you're not going to be developing advanced mathematics or the internet. You're too busy trying to stay out of the rain.
Joshua Millsapps 29:08
Let's see…we've talked a lot about kind of these larger national programs. But I know that you guys are also involved in some local areas, in particular in Detroit, and I'm just curious, you know, how are those different from these national programs? Maybe a little bit of background about about why Detroit got into that sort of thing and how you see that playing out in other localities.
Clarence Buck 29:37
Okay. Detroit is a city with a city with a past you might say, you know, they were the heyday the American automobile industry. Detroit grew like crazy and then as, as that industry changed, Detroit shrank which left the a lot of vacant housing. And a lot of problems that I can't address because I'm a bricks and mortar guy. But they just created all sorts of problems and Mayor Dugan put a push on cleaning up the city's housing. He wanted to get rid of vacant properties and rundown properties. He wanted to do away with the, I suppose the drug houses and urban blight in the neighborhoods. He wanted to raise property values for everyone, because it doesn't matter if your house is nice that the one next to you is falling in.
So, he's been a real advocate for safe housing. And they really didn't have the ability to inspect all of the rental housing just as a staffing issue. The tax base shrank with the population base. So, it's a tough problem. So, he created through their building and building safety and engineering department and they developed, the idea of qualifying, four or five vendors to help. It was a bit of a process. But since we had done some work with the Detroit Housing Commission on their public housing, we were known in the area. And they called and ask us if we would be interested in applying to be one of those vendors. At the time that started though we had to come up with a way to do what what needed doing digitally. At that time, it was still done a lot on paper. That's only been five years ago. But the systems hadn't developed, hadn't caught up with with this particular need. And that's when we reached out to you guys. And within a week I had a workable model. We started tweaking it, you know, after that, we all it was all based on the paper form. But then we added the ability to add pictures and illustrations and inspector comments as well as having the rules right there so that when the landlord was looking at it, they could say, oh, there's the rule.
Joshua Millsapps 33:17
I'm curious, how are all the inspections that are done in Detroit? Are they all digitally based? Or are you guys sort of pioneering that…
Clarence Buck 33:27
I think now all of the vendors have some sort of digital capacity, I'm not sure what, what tools they're using. I know, they're all pretty good folks, and try to do the very best that they can. But, of course, I'd like to believe we do a better, smarter, faster, cheaper than anybody else. But I'm sure you do too. And you guys have great software. I know they're all good. You know, they have to be the city monitors it. And they expect us to do our jobs well and professionally. But the software was integral in being able to do it productively. And again, to be able to transfer that information to take that data and communicate it to the property owner. And have what needs to be done communicated to building safety and engineering, so that they knew what was going on. Now, they just had us do it for the one in two family units. They kept the more complex buildings to their in-house inspectors because they are more complex and there are systems in there that they want to make sure that they're checking themselves and doing their due diligence.
Joshua Millsapps 35:02
Interesting have you seen other municipalities do this sort of sort of thing? Whether it's urban blight that drives that or just kind of a desire to have uniform safety standards?
Clarence Buck 35:14
There are a lot of communities that that do have inspection programs for their rental properties. And there, they have to walk a fine line between private property rights, sure, and public safety, and product liability. You know, and, and so, as well as the privacy of the person renting the unit, ie their rent. That's their house, you know, so, it's a it's a tightrope to walk, but a lot of communities do it. I haven't really thought too much about what drives it but there's a lot more of them in Michigan, for instance, than there are here in my home state of Ohio. Ohio has had several constitutional challenges, to rental inspections. And some municipalities have found ways around that. It depends on how they approach the problem. But there are a lot of places, particularly larger cities that do Rental Property Inspections, and some of them are starting to outsource. But it's a tough balance, you know that depending on the size of the town, then you have to have this economic all the numbers have to line up and it has to be revenue neutral.
Joshua Millsapps 36:56
Well, I think that's often the case in inspections and compliance. You know, most people, they're, they're aligned with the goal of having safer housing, and they want to make sure that that, you know, tenants are in, in places that are suitable to live, but, it comes at a cost and inspections and compliance are cost centers. I think that's one of the things that it makes it so important to be able to show kind the value of what you're doing over time, whether it's reducing urban blight or increasing property values over time. I think for most people, what hear about public housing what makes national news is almost always bad news.
Clarence Buck 38:06
There's so much good going on. And you know, there's a there are a number of programs on television, where they're buying a house cheap, and they're putting money and work into it to make it something better. The thing that happens is that when you fix this house, it is an incentive for the person across the street, to invest a little more in theirs. And it snowballs. Take inspections out of the equation for a moment, and just look at any neighborhood and see what happens when you have a neighborhood that's rundown, someone comes in and they start investing, they start fixing the properties up. It leads others to do the same thing in the same neighborhood until pretty soon that whole neighborhood is turned around.
Joshua Millsapps 39:01
Yeah, I know that there's a whole line of thought in urban areas around going out and, and cleaning things up and having clean boundaries around properties. Anyway, there's a decent amount of statistical evidence and scientific study around the beneficial effects to the community of having those kinds of things in place and it can become sort of a virtuous cycle where, you know, you make the place a little nicer to live, other people start doing the same and you know, the next thing you know things are getting better. Maybe, not over the course of six months, but maybe over the course of half dozen years, you're able to change a particular community from within.
Clarence Buck 40:04
It reduces crime as well as increasing property values. I read an article several years ago, several articles, actually, it was it was kind of a popular topic for a little while about graffiti and broken windows and law enforcement. If there was a neighborhood with more broken windows and more graffiti, it would be an area that had more street crime. And they found if they forced property owners to keep the windows fixed or properly boarded, and stay on top of graffiti, what they had less crime. That's a very shortened version of it. But basically, if you keep your neighborhoods clean, they tend to stay clean. You know, of course, you're also creating more opportunity. And there's a whole social side to that. And, again, I'm a bricks and mortar guy. I know there are people that do study those things, and they can tell you what those numbers are, but decent housing is a critical component of our culture and civilization.
Joshua Millsapps 41:42
We talked a little bit earlier about NSPIRE and the future of inspections at HUD, and I want to be mindful of time and I appreciate you being so generous with your time. But as you look to the future, it's interesting, because you kind of started as this groundbreaking shift came along with the advent of computers and the ability to bring devices on site and capture pictures and all of these things that have really radically changed what's possible in the inspections world to drive safety and better housing. We're really at a unique place in time now, in particular, with HUD where they're looking at these new standards. What do you see on the horizon as far as next things and in how we continue along the arc of making public housing safer? Is it is it protocols, is it technology? What types of things do you see playing in? You've been involved in this for 30 years, what does the next 10, 15 or 30 years look like in inspections?
Clarence Buck 42:53
Scary. Remember when we were talking about how computers have developed since you and I started using them. I'm wondering how they're going to be with our children. I don't have enough gray matter to be able to conceive where we're going to be in 30 years, but I can think about the next steps. You mentioned NSPIRE. And it's a part of a continued effort to improve the standards themselves. And to improve the way we need to quantify the results. The law of unintended consequences is in play. To keep it simple, keep it focused on the goal of safe, decent, sanitary, and keep it manageable. I can conceive of a time when we I suppose some futurist might conceive of roaming drones or something that scares the daylights out of me. But roaming drones could keep track of the exteriors of buildings and report maintenance problems. You know, almost remotely to the maintenance manager's office, he'd get pictures and be able to see this gutter came off in the storm last night or, you know, and that may well be a universal thing.
Joshua Millsapps 44:37
You know, it's interesting, you mentioned that because I know that we're seeing those kinds of programs at with specifically railroads, whether using drones to look at track and things like that. So I guess it's not that far-fetched to think we might be coming into that kind of a that kind of thing. And you know, you talked about COVID earlier and that's where we've seen the rise of these virtual inspections. I mean, we launched remote video software where you can come in and a tenant can take their iPhone or their Android device and come in and look at things. But its really going to be so much more, having the ability to monitor the exteriors of these buildings, things like that.
Clarence Buck 45:27
The military is spending money and they're one of the biggest drivers of technology in the world. They lead really the drone technology. You look at where industry is spending money in automation. It's not too hard to see where one of these days we we might have that. I hope it's not one of those dystopian societies with big brother comes on and tells me I forgot to brush my teeth this morning or something, you know, we don't want that. But it could be a very useful tool for property maintenance across the entire city, sort of a universal umbrella that says “Oh, this house, or that that building got tagged last night.” Of course the challenge is where does it stop. Does it add “Oh, and, and the guy that tagged it lives on Second Street.” We don't want to turn into a police state by any means. And I'm always a little bit cautious about those sorts of things. But there are non-invasive uses for the technology that can automate some of the things that we do, and reduce the intrusion on the privacy of the people who live in these houses, whether they're private rentals, or whether they're public housing rentals shouldn't make any real difference. We want everyone to have a safe place to live.
Joshua Millsapps 47:10
I agree and you know I don't think either of us could have conceived of where we are today 30 years ago. I don't want to take any big guesses at where we'll be 30 years from now, but I do I agree with you, I think over the next four or five years, you know, we'll see automation of some of the pieces of inspections that are harder to do. You're almost talking about more of a preventative maintenance approach to some of this stuff. And I do think that's a big part of what you do inspections for…to make sure people are doing the right things. The more that you're able to nudge those right behaviors in between these big compliance efforts, the better off everybody will be. And I think even for, you know, for property owners, for landlords if you can figure out the incremental ways to maintain your building. you're probably going to be more efficient, more profitable over time than if you wait until the things are a wreck and you have to come in and do wholesale change,
Clarence Buck 48:15
You can save more money with a screwdriver in your back pocket, then you can just about anything else. If you notice the screws getting loose, tighten it before it starts to worry itself out. Left unattended the next thing you know, the doorknobs falling off, and you’ve got to kick the door in to get to get out of the bathroom. And from there it just it just goes downhill. But if you fix the small things promptly, if you fix the little cracks on the outside of a building to keep the water out of them, so they don't freeze in the winter. And next big cracks, those are like potholes on the side of a building, essentially, it works just like the potholes on the street. If they're not taking care of early, they become real problems in the spring. So the same thing is true for buildings, you’ve got to keep the water out of them. And if we can do that with by being a little ahead of the curve, it's gonna save them time and money.
Joshua Millsapps 49:15
That kind of resonates with me and I think with most with most folks. Most people want to do the right thing for the sake of the right thing. But, you know, there's even a little bit more incentive if doing the right things is also the right business move. And I think that the more that we're able to quantify that and tie back what what we're doing in inspections and safety, to “look, yes, what we're doing is to help make buildings safer and to achieve this uniform standard. But by virtue of this, if you stay on top of this, you're going to have a more efficient building that's more profitable over a longer run of time.” All of a sudden you've got all the right prompts and the right motivation in place. And you'll get through even to the folks that are only focused on the bottom line doing it, if we can do that.
Clarence Buck 50:14
We've learned and become strong believers that there is no reason that ethical behavior should conflict with business or profit goals. In fact, we've always found that ethical behavior and running your business…running it profitably. They go together, if you intend to be around any length of time. You might get a flash in the pan and make your million and get out in two years. But that's it, now you're gonna have to go do something else. But if, if you do the right thing, by folks, just say what you're gonna do, do what you're gonna say, charge a fair price for it. And in follow up it's so simple and it works.
Joshua Millsapps 51:05
We say the same thing here all the time. Look, if you're doing the right thing. For the right thing sake is great. But doing the right thing is also good business almost every single time over the longer arc time. It is just, you know, the things you learned in kindergarten will carry all the way through your, your business life.
Clarence Buck 51:26
I should reread that book. I think about it every once in a while. Yes, it really is that simple. Yep and milk and cookies and a nap are a good thing.
Joshua Millsapps 51:41
Well, I'll tell you what that's probably a good place for us to break off. I really enjoyed the time to get to talk to you about a little bit about the past and a little bit about where we're headed in the future as far inspections in general, some of the things that are happening at HUD and I guess we’ll both find out what the next five years really holds soon enough. I've enjoyed the discussion and look forward to talking again soon.