Martin Ditto of Ditto Residential | OSLOadmo in Washington, D.C. | Learning Through Iteration
Transcript
Atif Qadir 00:06
We'll get started. My name is Atif Qadir and this is conversations at Michael Graves. We are recording from the iconic home of architect Michael Graves in Princeton, New Jersey. That is right next to the office of the world renowned design firm that bears his name. In this series, we will hear their stories of American buildings from the perspective of the architects and developers who are constructing them. They will talk about the process and the product on a deeply personal level, highlighting the teamwork, integrity, ingenuity, empathy, and commitment that is necessary to build these works of art gracing the skylines of our cities and towns.
Atif Qadir 00:45
Today, our guest is Martin Ditto. Martin is the founder and CEO of ditto residential, an award winning development firm based in Washington DC. We will be talking about Oslo Advo, an eight unit residential development and the Adams Morgan neighborhood of DC. It was completed just over a year ago, and is the third in a series of Oslo branded co living properties in urban infill locations, he is committed to developing new ways of living and is looking to branch into a larger residential platform that we will be talking about as well. Martin, thank you so much for being here with us. Absolutely.
Martin Ditto 01:20
Thanks for the invitation.
Atif Qadir 01:22
So let's take it way back. You were born in Jackson, went to college in Nashville and started your career in Baltimore. Each of these are midsize cities with a significant architectural heritage to them. How did each of them influence you on your career path that you went on today?
Martin Ditto 01:39
It's interesting, I just got chill bumps thinking about you saying they're midsize cities because in addition to those cities, I've lived in Valencia, Venezuela, Leeds, England, and morphia, Spain. So of all the cities I've lived in, are worked in, all of them are fairly kind of true to the heritage of that area or country. And none of them are major blockbuster cities. So I just find that interesting. That was not intentional. But isn't that what happened?
Atif Qadir 02:09
So in your first real estate development project, as a developer was in Baltimore, it was the spinnaker Bay development with bazaruto. What would you say you took away from that experience that set the stage for you eventually starting your own firm?
Martin Ditto 02:25
You know, that was just diving into like an incredibly complex, large scale, multifamily multi use project and in a major city. And so I had never done anything like it. So it's hard to say what didn't help me for that project. I mean, the mistakes that were made on the project were certainly helpful. I mean, the team, the construction team, they worked on that project was continues to be the best team that we've ever worked with. You know, we dealt with, you know, two different architecture groups and how politics ends up playing into design and dealt with, you know, city relations and subsidies, and tiffs. And, you know, I mean, basically dove into the deep end and had amazing team members and mentors. But it was a very complicated project, and it came off, at least on time and on budget. So that was the goal, at least at
Atif Qadir 03:14
the time, and I'm guessing all your subsequent projects were all on time and on budget as well,
Martin Ditto 03:18
if that was the best project everything down.
Atif Qadir 03:21
So the founder of the verb Tomba, Zito said, when we started the company, our primary goal was to eat and keep the lights on? And was your experience something similar when you started did residential?
Martin Ditto 03:37
You know, Tom, was much more. In some ways, he knew what he wanted for the company. And I don't think I did, I was more kind of iterating towards what I saw for what I wanted for my life. Right? When I first started the firm, I wanted two things, I wanted a platform from which I could create and manage and do other things. And then I wanted part of it to be scalable, okay, because and I didn't really understand at the time, it's almost like I had this, this idea in my head that was that was righter than I could have known about what I wanted. And so what I wanted intentionally was a platform to be able to do other things. And then I wanted that platform or at least parts of that platform to be scalable.
Atif Qadir 04:25
And when you say scalable, is it repeatable and being able to do the same thing again and again, or have a larger scale or towards a larger audience? How would you describe that?
Martin Ditto 04:35
I didn't know. Okay. It was it was it was more than intuitive that I wanted that today, you know, it's like a lot of people go back and look back on what they did, and then kind of back into why they did it. I knew the word right. I knew that concept. And then what's happened today, is it kind of both if I had to say which one's more important to me, like my ability to scale one concept or my ability to do multiple concepts, I would say, for a personal enjoyment perspective, I'm more interested in, you know, doing multiple projects or multiple kind of solutions to problems, as opposed to taking one solution. And, you know, scaling that to a national or global audience,
Atif Qadir 05:19
okay. And your mission you describe in this way to create world class residences with livable spaces that are so powerful that they can inspire and change the way people live their daily lives. Is that in sync with what you're describing about this platform for improvement, this platform for change?
Martin Ditto 05:38
Yeah, I'll tell you how I got to that statement on our website, it happened to me, you know, I had grown up in a really cool house designed by Hadestown, which is a Louisiana modern plantation style architect, if that's, there's probably a better term for it. But but he was very progressive in his use of, of materials, reuse of materials, etc. And so, that comment comes out of how I learned, we were talking earlier about how, you know, a, a country's philosophy and, you know, how does their language interact with, with the way that those people are, and what I learned from living in a modern home that was very much mental muscle in the architecture is how that could affect me, and how over time, you know, I became the architecture, as much as the as the architecture became who I, you know, the design of the house became who I was. And so, I, that change in me, has led me to really understand how place and experience I mean, place was kind of how I got started, like, architecture layout, you know, programming, you know, I started to like, layer on these different elements, I mean, like smell, and lighting, and, you know, all of these different environmental factors can affect your experience. And all of that adds up to where we're headed, which is this idea of, of like, the production of, of space, or the production of experience. And so where we really are going and where we're very solidly on the way to is, is a is an experience design and production firm, that happens to be in real estate development.
Atif Qadir 07:13
Okay, let's dive into one of those one of those places. So Oslo Admah, that's the third of your Oslo co living buildings, after Oslo, Shaw and Oslo Atlas, Where did the name come from? What does it mean?
Martin Ditto 07:27
So Oslo came from a company wide debate, where we all just threw out there, you know, whatever, we could onto a onto a whiteboard, and then started debating the merits of each I had had this dream that all the buildings we built would be named for places, which is not exactly a fairly unique idea of cities around the world. Right, right. And so we started, you know, Oslo was going to be the first of those. As it turns out, most city names don't make good building names. Okay, Oslo did. And so we short, easy to pronounce. Yeah, it's beautiful. And it's unright. Even as you know, as it's written, and doesn't have, it's not totally dissimilar from ditto, as a mother, you know, kind of brand to the whole family. And then, just as an aside, my cousin lives in Oslo, Norway with his family. And I always enjoyed visiting him and definitely kind of culturally, I love the distinction between kind of a Norwegian, Northern European way of life as compared to American way of life.
Atif Qadir 08:27
And there is a an element of that design aesthetic that goes through the design of all your buildings, right?
Martin Ditto 08:33
Yeah, there is. But I would say I would have to give more credit to architects, primarily one Vietnamese architect, Jim cow, as one of the major influences on on my initial kind of design. Since then, you know, now I feel like I'm influenced by a number of other people that I are very close to, but I would say has kind of a Vietnamese modernist look. Okay. And now I think I'm out of now, who knows right now, now, it's just kind of, it's what I've learned and what I like and the direction that it heads tends to be the direction that the partners that we are most closely aligned with are taking us
Atif Qadir 09:09
okay. And Advo in the name Oslo admirer, refers to Adams Morgan, and why did you choose to build in that neighborhood?
Martin Ditto 09:18
So most of our buildings, we chose because of opportunities, we DC is a land constrained market. And so most projects come because there's an opportunity as a circumstance of it. Sure, you know, other markets that are more commercial like Atlanta, Georgia, Houston, Texas, there's so many more properties that can be redeveloped because of the lack of historic preservation, but also because of zoning ability to make changes. That's not true in DC. So you tend to take opportunities as they come. And this was a smaller project than we had been focused on. But it was such a cool location and we worked with a really fun design team, so it was worth doing. And
Atif Qadir 09:55
then the beginning of the project was an empty parking lot which is different than and perhaps other projects, which were focused on redevelopment your past, when you saw the location, you saw the opportunity? Was it love at first sight? Or was it something that had to grow on you after researching and figuring things out more? Well,
Martin Ditto 10:13
I love every site where I can, like, do something faster. So I it's hard to imagine, the the only time that a site I don't like is if like, it's so obvious that another site is better tonight, your limited time in the day and in your life. So I liked it. Because I love that as Morgan, I love this neighborhood, it's so close to my house. And I and I do think that like these jewel box sites allow for greater creativity. And, you know, it forces the architect and the design team to to really think about the experience of fewer people versus having a more monolithic box to design.
Atif Qadir 10:53
So co living properties are often thought of as having significantly greater density. And that sounds like the makings of a pretty difficult approvals process. What have you learned from your previous two projects in the Oslo brand that helped color your strategy? In the entitlements process for this one? I mean, these buildings were by right. Okay. There's nothing specific that needed to change to allow for them,
Martin Ditto 11:20
right. I mean, DC has laws that are that are that are somewhat flexible in terms of you reach your max capacity at like six bedrooms. Sure. But I think that the key to the previous buildings plus this building is actually not true. It was a very difficult approval process, but not having to do with the CO living, had everything to do with the idea that we were replacing a parking lot with a new building. And there was a lot of resistance in the neighborhood of any change no matter what it was.
Atif Qadir 11:50
But was that a public private, like a public parking lot, or who was actually blocking private
Martin Ditto 11:54
parking lot that was used for a local gym?
Atif Qadir 11:58
Oh, so the concern is all of that will then spill over on the street. That wasn't
Martin Ditto 12:01
what they stated. Their concern was they didn't want us to do a three storey building that was adjacent two storey houses, even though on the other side of the alley, all the buildings were three storeys. Okay. Yeah.
Atif Qadir 12:13
So assuming that was a pretty entertaining approvals process, what was the final constraints that you were left with? That you were going to proceed forth in the design?
Martin Ditto 12:23
I mean, I, I got to handle the design team. I mean, Mark McIntyre was the architect and he would meet with the community at nauseam until he said to them, Look, I will work with you until you're happy. And eventually, the approval process was just that we have done a fantastic job they had done the architecture team has done a fantastic job with the design process, and at that point that needed to be approved.
Atif Qadir 12:47
Got it? So there was no, I think that sounds like a very different process than some developers might take. I've taken more contentious type perspective. Yeah, I mean,
Martin Ditto 12:56
we will do whatever we can for it not to be contentious. Ultimately, that community did not is the first time that I think we've ever not been supported. But because of the amount of kind of groundwork that had gone into the approval, once we got to the, to the body that approves historic elements in DC, it was approved.
Atif Qadir 13:13
So you mentioned the architect that worked on the project. Could you talk about the other team members from outside your firm, as well as within your firm that had key roles on this project?
Martin Ditto 13:26
So on this project, I mean, Oslo as a brand was very much influenced by you know, we have a fairly young team. And so they're they're very knowledgeable, a lot size more knowledgeable than I am exactly what, you know, the demographic that would occupy this
Atif Qadir 13:43
was looking for, like what's on trend in terms of layout styles?
Martin Ditto 13:47
Yeah, what's on trend and what people are willing to accept and not accept? Like, what were the trade offs? mean, were people more excited about a larger common area or their own bathroom? And so like, this was the time that show living wasn't really a term. And so we were pioneering, you know, what people would be willing to accept when they left and what we call group group housing or adult group housing, or, or you could call it, you know, like, you shared housing, shared housing. Sure. So we were kind of exploring that on our own. And so in my office, Kelly Bremmer is is a lead on, on account of how we think about, you know, how these buildings will be experienced by the user. And it was designed, developed by by Dan in our office who has been kind of heads up our, our, our development. So I mean, ultimately, the the, the effort for a building like this ends up being, you know, our internal team plus our external collaborative team. And now as we move into our new projects, we're adding additional kind of advisors and designers so that so that we are able to really hit the mark.
Atif Qadir 14:55
Sure. So then in these more traditional projects, like Gaza, I don't know, what is your role as the principal of the firm? Do you sound like you give significant kind of leeway to your design team to internal team to go as they will,
Martin Ditto 15:11
I think it's I'm learning, I'm learning how I can step back from certain processes or areas. But then really like, for instance, if the units are, are economically viable, and they live well, at least according to how the market will perceive them, then we're because important to me is kind of the light and air and the aesthetics, and the overall kind of look of the apartment. So as I can step back, because, you know, our team members are totally competent with respect to those things, and I can focus on the things that I care most about. And we're seeing that same thing start to develop, like, as we're able to create an aesthetic that we can then continue to use and more than allows me to be more more involved in the innovation side of what we're doing. And less and less involved with the project management side.
Atif Qadir 16:02
And when you say innovation, that means the the products and the changes that really tailor the experience for the user. Is that the idea?
Martin Ditto 16:10
Yeah, I mean, like, for a long time innovation to me was how will this building look and feel different than the last one? Sure. But then innovation became well, what is the product we're building? And if we could do a different product? What would that look like? Because we'd never thought well, let's, are we only going to build apartment buildings I had just been following on this assumption that we would always build part of buildings, additional rental buildings, rental and for sale. Okay. And I never thought well, should we build something different? Or should we should we be building? Yeah, I mean, should we be design firms? I'd never like actually opened up to say, you know, if the world was my oyster, right, what would that look like?
Atif Qadir 16:49
Okay. In this case, the the overall project, it's eight units, ranging from two to four bedrooms, and a total of 24 bedrooms. And then correct. One of those things that came out with the, the design process is each bedroom having their own bathroom? Sure, are many of them doing that. And then washer dryers are in unit. And there being a common courtyard that's often programmed with activities, that structure on that strategy. Is that something that evolved over the course of the various Oslo properties? Or is it something that's sort of been there since the beginning that sort of size and scale and structure.
Martin Ditto 17:28
So many of those things had morphed right? The parody of bedrooms, the bathroom had changed. Because of the kind of popularity of his neighborhood in our, in our how limited we were on square footage, we ended up not doing better, and bathroom parity on that one property, because of the popularity again, I mean, people generally want to have their own apartment if they can. That's why we see, like in the south, fewer and fewer people sharing apartments, and people really want to have their own bathroom, which is why we see our, our buildings that have veteran bathroom parity being more popular than I believe that don't, okay, but it all comes down to supply and demand and cost. Sure. And so our kind of iterations of Oslo, and now we're on our fourth Oslo, and that has all of that learning, you know, and experience has led us to our new project. Every single one is different. I mean, so our first Oslo was three and four bedrooms. Our second Oslo was all fives. Our third Oslo was two threes, fours, and then our final is over five bedrooms. And so what that allows us to do is to learn from how people interact in those spaces, how they value space, how they value, private space versus public space, how they interact with planned events, how do they organically come up with events? And how do we promote the organic production of events versus the inorganic creation of events. And so all of that learning the mistakes and this successes and the feedback and the years and years and years of managing these properties gives us kind of the data to go out and say, look, we've never built this new product before we have so much experience from our, you know, various backgrounds and experience and development of the Oslo brand that we feel comfortable with.
Atif Qadir 19:17
And given that there's a level of transients, that's just inherent with CO living, did you decide to furnish the properties? And if so, like, what was the extent to the furnishing that you provide?
Martin Ditto 19:29
We're still playing with that. I mean, our experience is that the shorter the term renter, the less likely they are to want to bring their own furniture, okay? I mean, so differently, like the shorter the term, the cheaper it is for that person to use something that's there, I mean, the move furniture and for one day cost 1000s of dollars, right? Because it costs 1000s of dollars to move it in for a month. And so the longer the person is there, the more likely they are to want to personalize it just like with office space. I mean, when someone like first moves into an office space, it's it's clean and well ate and has nothing. And then 2030 years later that office tends to reflect their personality. And the same is true of, of any multifamily housing and CO living is no different. And so we started off with no furniture, and now we've been kind of adjusting our approach. One is to make our building successful financially, but two is to really think about like, do you know, if if by making our buildings the most financially successful, it means making them really short term rentals? You know, what does that mean? What does it mean, for us
Atif Qadir 20:34
really short term like two months, three months, or one month or even shorter?
Martin Ditto 20:37
Well, let's just say this, let's just say on a scale, if the average tenure of our of our average resident goes down, right, as that goes down, it's my conjecture that that that is a, that tends to be a force for the reduction of community, versus as people stay longer, that tends to be a force for the creation of community. Sure. And so based on that concept, it has been very informative of what we want to create. And it's made us less likely to spend a lot of our time and efforts trying to create a short term rental brand. Because if if your goal is to create community, and your goal is to create healthy environments, and we know that that by living somewhere longer community just actually help help that happens more organically, then will we really started to focus on that and how we were rolling out and planning our new brands.
Atif Qadir 21:31
So in that said, Is there a hand that the firm has in the selection of tenants and the pairing of tenants in case someone is interested in Oslo, but doesn't have five friends to, to rent an apartment? With how does that process work?
Martin Ditto 21:49
So I mean, there's multiple ways to do it. I mean, generally speaking, people who are living in the buildings will find replacements for the people that move out will provide I actually don't know the exact process because it's kind of done by our management team. But you know, what's interesting about about a traditional multifamily versus kind of a, a lifestyle version of multifamily is that in a traditional multifamily, that selection that a resident, the selection process that the resident uses to choose where they're going to live, really has to do with location, price and aesthetics, and ation, price and aesthetics. And inside the price decision is usually the size of the unit, where it is in the building, its view shed, you know, the amenities of that building, plus the amenities of the unit, location is fairly obvious, right. And then the aesthetics is really interiors, for the most part.
Atif Qadir 22:43
And for your perspective, you're choosing you're choosing really awesome locations, and you might be trading off the amount of square footage for really cutting edge or very beautiful design aesthetics. And that's, that's really the strategy that you're going for
Martin Ditto 22:59
with Oslo are in the future. Oh, sure. With Oslo. Yeah. I mean, originally it was what can we deliver in terms of product that is unique, and that that piques people's interest? And that will allow them again, they had never, at least from our perspective, and when we built Oslo one, we didn't know that people would do it. And so we had to make this. So my thought was, well, we're gonna make design changes, whether that's, you know, very, at the time, very cool, almost componentized bathrooms, and, you know, showers with glass doors, which again, in the in the rental world is not all that common. So it was just decisions that we thought we could do, that would make it more desirable. As it turns out, design is not a driving decision maker, I think, for most people who are looking at shared housing, and it's not just wasn't disappointed to learn that but it was informative.
Atif Qadir 23:58
That said, the it sounds like the particular type of people that would be interested in living in dado co living property are likely different than those that would be living perhaps at competitors properties, which focus on much, much more flexibility in shorter terms. Do you find that the people living at your properties are actually interested in staying longer than they would say at a traditional rental building might be saying two years or three years? What are you finding in terms of duration?
Martin Ditto 24:27
You know, it's a good question. And my whole conversation with you earlier about about duration of rent is kind of a newer thought process for us as we as we kind of dug into it. I think people do stay longer. But more importantly, we're doing everything we can to encourage them to stay longer. So all of our changes on the management side on the event side on kind of the culture side, all and all of our kind of outreach and in kind of how we are attracting people to the brand is going to is going to begin shifting away A from kind of traditional marketing methods and more towards kind of this announcement, you know who we are and who, what we believe, so that people kind of self select because of their shared belief and and who we are. So then as
Atif Qadir 25:15
a technicality in terms of how the operations of that happened, does each individual sign a lease with you, or they together sign a lease for that apartment, and it's resigned as an addendum, every time someone changes? It all depends
Martin Ditto 25:26
on the municipality, right now, we only operate in DC and DC requires one lease per apartment.
Atif Qadir 25:32
So it's not a rooming house, then correct? Okay. Correct. And then from your perspective, do you see that with this approach that you're taking to provide a lot of the programming and the layouts, the amenities of CO living, but but actually, with a much more substantial? Like a long term perspective to how you operate it? Do you see this kind of coming together of the way that you see your your apartment buildings and your co living properties that they essentially seem like two options that someone can go for that are actually quite similar in many regards, right?
Martin Ditto 26:09
Yeah, they are quite similar. And I think where we've come to is that instead of designing product, where the wall layouts are defining of the culture, that we're really starting to look at living as more of a as an experience. And so our goal is to really get into kind of the psychographic kind of concept versus demographic concept of what we're trying to build. And so I guess, long story, I guess my answer is that we're thinking about how you combine kind of a, a different way of living, that people might say, I'm willing to change the way I live, so that I can have X, Y, or Z. And so what is that x? Right? So I'm willing to give up space so that I can have this or be give up? You know, more of my income so that I can have that? I mean, most of the new concepts, or I'll give it more my income, so I can have this right. But there, but like, the question is, it's an agreement between the resident and the provider, you know, the resident in the community, and it's like, I'm willing to pay, or to give more of this resource, or less of this resource, in order to have more of that kind of product or less of that product.
Atif Qadir 27:21
And from the revenue perspective, you're pricing Oslo by bedroom. So Oslo had much 1300 per bedroom, how did you decide on that pricing and talking about some of the premiums that you charge for some services, or ancillary. I mean,
Martin Ditto 27:39
the way we first got started was we thought that we really needed to rent them. And so we, we just, we needed to get $900 a bedroom, and people were willing to rent numbers that were higher than that. So we kind of tried to figure out where the market was, and just got at least that was the first project. Since then, we actually have a not so complicated, but fairly in depth market analysis we do where we compare, you know, multifamily apartments that receive a slight premium to multi bedroom apartments, and we have, then we actually have a premium, where we apply premium of multi bedroom houses, to, to pricing, what we deliver as multi bedroom apartments, meaning that people will pay more to live in a really nice apartment, and they will a group house. Okay, and so we kind of we play with those numbers and come up with like, premiums over or discounts to certain products. And that gives us, I think, that usually gets us within three to 5%. And if you can hit a 3% variance on your on your income, that's pretty good.
Atif Qadir 28:44
Okay, and then to make it to make it clear, when you compare your Oslo properties versus your traditional rental buildings, how do you see the business model differing from the revenue, the cost and the income perspective? Generally speaking more there. Oh, so is it that you are making more and spending more on your Oslo properties? Or how would you compare that to like a traditional rental building?
Martin Ditto 29:16
So like Oslo, I mean, the goal had always been that our cost of total development was not a significant increase over our competitive set. Okay, I think we we ended up spending more on design, and kind of those more intrinsic elements and, and having suddenly the same amount of construction. And then we do get higher rents. And so there's always been this, you know, this this necessity to to get a return on our investment. And so for spending more money in architecture in design, we did need to get a premium and when we do and that was that was especially apparent on our largest traditional apartment building where we were getting a premium over At large scale buildings with much more amenities, and that's where we did start to ask ourselves, this amenity war that's going on, you know, it's happening and fitness room, the
Atif Qadir 30:10
pool of loud all that stuff,
Martin Ditto 30:12
movies, video game lounges, all of that stuff. Yeah.
Atif Qadir 30:16
And you've found that for your tenants, there isn't really a desire for all of that they actually prefer the, the higher design and the production of the, of the apartment being much more of a focus.
Martin Ditto 30:27
I think that I think it's funny, like, you know, all things being equal, you know, someone could have the same size building, and the same number, you know, kind of limited boutique level kind of feeling of of a multifamily building, and could have the amenities and can have everything that's, that's a really, what's that turns into is a really fine small condo building. So yes, people would love that, right. But again, it comes back to what are they willing to trade off for. And so that's been those trade offs is what we've really been focused on, and how we can deliver a product that ultimately ends up giving people a higher level of happiness, for the same price that they would pay for someone else.
Atif Qadir 31:02
So I want to take a moment to tell listeners about our hosts, Michael Graves architecture and design. This design firm has been serving clients worldwide for 55 years, from their offices in Princeton, New York City and Washington, DC. They provide planning, architecture, interior design, and graphic design services for many different building types, hotels and resorts, office buildings, cultural and educational facilities, housing, healthcare, and civic structures are all part of their repertoire. With hundreds of design awards, it's clear that they care deeply about their profession and are keen to share their ideas widely. So let's talk a bit more about the the bigger picture of CO living and where that trend is going. The premise of CO living goes like this for a resident use spend less money exchanged for less personal space. You've thought quite a bit about this in your mind, what would you summarize as the case for CO living?
Martin Ditto 32:04
You know, I find more and more that the case for CO living, it's saying Washington because I'm not an expert on CO living in other cities, is that you can live in a nicer place with some of your own private area for a lower price than traditional multifamily. So I think it's a lot of it has come down to an economic argument for a lot of people, we've attempted very hard, and they're spending a lot more time and focus now delivering a different experience for our residents. And it's, you know, it's harder than it seems, especially if you don't do your own management. And so by doing our own management in the house, we're able to deliver an altered higher level experience. But I think that in a perfect world, co living is a desire to live with others so that deeper connections and relationships can be forged that will serve you for the rest of your life. My most pessimistic view of of CO living is that it's a capitalist grab for more money per square foot, you know, based on people's needs and supply constrained cities. And I think that you know, where various brands come out on that spectrum of positivity too pessimistic. Outlook is is interesting.
Atif Qadir 33:27
So some of the critiques then of coliving include one from a neighbor of a co living property that's also in DC, who called that particular one, a glorified rooming house and way too big for the immediate context. So it sounds like the strategy that you took with Oslo is to be rather nuanced and to do a good job and blending into the community fabric. Is that Is that true?
Martin Ditto 33:51
Yeah. I mean, I don't know exactly what you believe that is. But I know. I know that, like so much of it has to do with the experience, you know, during development, during construction and during delivery and how you can really create a different experience. I was talking to an investor earlier today, and they were talking about their different approach to development is they don't think of the development starting from a marketing perspective, the day they get CFO, they think of the development as being this this interactive process with the community, and with with future residents and all different team members and develop processes this. It's a weaving of all of these different talents and materials and everything. And so I think, in a perfect world, that would be the way that everyone would do it. We certainly strive to to do that in our projects.
Atif Qadir 34:38
So the fascinating statistic, the percentage of single person households in the US is now 30%. And that's up from 15% Just five decades ago, and at the same time, there's a decline in earning this statistic I love over 60% of 20 and 30 Somethings regularly receive money from their parents down So you could sarcastically make the case that CO living is really obscuring the reality that an entire generation of adults can't really afford to live the way that previous generations did. Do you take that sort of perspective? Or do you think that this is actually more emblematic of a way that people want to live? And that's a choice that people are making.
Martin Ditto 35:24
I mean, there's a lot there, I would probably say just that, you know, realistically, it's probably a more sinister kind of economic outlook on on where religion incomes have had it in our country. And another statistic, which is interesting is in the next 10 or 15 years, 50% of all Americans will be doing virtually gig jobs. And these could be consultants, but they're non w two employees.
Atif Qadir 35:51
So without a need to particularly go to a particular place and downtown and come back every single day.
Martin Ditto 35:56
Correct. Yeah, but also without the shortness and the confidence that they're traveling either tomorrow. And that's kind of the the interesting way of looking at it. And then add to that your statistic about the number of people that are, that are receiving money to their parents add to that the statistic that that more and more people are spending well over the HUD suggested 33% of their gross income on housing, that reaching 40 and 50. And sometimes 60% mean, there's a housing crisis in the country. You know, you can't blame a capitalist for trying to fix a housing problem by providing smaller housing for, you know, less gross money, which is the argument, the argument is that you're gonna pay less gross per square foot. But the argument that the big coliving developers and brands will make is that ultimately, you're getting more return. And so it's kind of it's a message at the two sides of your mouth, one is investor, you're getting more money, and then to the users, you're saving money, but in actuality, the users are only saving money because they're using less space.
Atif Qadir 36:55
So I want to build on one of those things that you mentioned, which is that there is perhaps in the future going to be less stability or less permanence to work situations. Do you think then that the the Oslo brand or more broadly, thoughtful co living could have a place in places other than urban infill locations, for example, in suburbs or beyond?
Martin Ditto 37:24
Yes, and CO living is neat, you know, is going to be or needs to be different than it is now. I mean, I think if CO living had intergenerational elements to it, and CO living had, you know, other kind of flexibility issues to it, for instance, like, I love I remember this, you know, whenever I travel in Europe, you know, the major boulevards that with the major houses are all split up into multiple units. They're all split up into small condos and apartments, where you can live in the suburbs, but have a smaller place. And so the idea that a that it's not to me the ideas can co working work outside the urban areas, of course it can, the classical way, it's straightforward or right, and it's some rent, right, somebody will choose. And so if you go to Roanoke, Virginia, and you design a cool living building, do you get a premium per square foot over the competitive set? Maybe, right. I think the bigger question is, are the forms and products of housing that we're producing? In the city? Are they right? And are they being produced in the right quantities? And is the form and quantity of housing that's being produced? And our ex urban and suburban and, you know, kind of rural areas? Is it being produced at the right numbers or better question about whether it's being produced? I think it's a very American thing to do. I think the question is, what should it be? Forget about the production of housing, let's just say like, what, you know, I love how you municipalities talk about how they're solving the affordable housing crisis by producing X number of units. But that's not really a good way of measuring success. I mean, the best way of measuring success is, how many people are in need of housing. Right, and how many people are being provided housing
Atif Qadir 39:20
and couldn't get it without being when constrained?
Martin Ditto 39:22
Right? Well, yeah, I mean, you can get into the details of how that's being measured. But the point is, instead of measuring it based on some measure that's totally unrelated to the denominator. And if you have a you have a, you need a divisor to your numerator.
Atif Qadir 39:37
So rather than talking about the the supply this simple production of things going off the production line, it should be the demand and was that actually met,
Martin Ditto 39:44
right? I mean, I can make the same argument about food in America. I could say that, you know, we're doing such a good job because we're producing more food for for hungry people. Sure. But I'm ignoring the fact that that you know, the the poverty rate, as measured by the people who have enough to eat is going up. Well, that's not successful, we would not argue that we were successfully producing affordable food in the United States, if the poverty rate was going up, even if the production of food was going, going down.
Atif Qadir 40:23
So I think what you're getting at is that housing, whether it's co living or traditional housing, perhaps like, other social necessities, are things that are much broader than just their own production themselves. I feel this is a good segue with your pivot from Oslo towards a larger wellness and Community Focus brand. Could you talk about what you are taking from the Oslo properties that you've built? And where you see that brand continuing under, under your development company?
Martin Ditto 40:57
Yeah, I can start kind of with the story of, of how we started on this track. So, you know, I became frustrated with the kind of normal process of development where I had to find a piece of land and then design it, and then finish it and then sell it or manager, then it just became like this, this process that like, if like, if I continue to the rest of my life, like, what level of happiness will this bring me. And then, at the same time, I became interested into inter differential housing. I was very interested in how affordable housing is built and distributed. And by
Atif Qadir 41:31
just one second, by intergenerational you would mean, grandparents, parents, kids, potentially all together?
Martin Ditto 41:37
Yeah, I mean, that's like it within a family. For me, it's just like, housing shouldn't be all young people, like a building should not be full of young people. Okay. And not all people and a building shouldn't be of all old people. And that young people, they want that, then, well, who am I to stand in their way? My point is, I think that people in society would prefer more intergenerational, living, eating, working, all of those things. And I feel like that's not really being provided. Because it's
Atif Qadir 42:02
very, I think that's a very, very good point, because there's very nuanced sense of needs, and wants, that vary across generations, and they often are, can actually complement each other. Okay,
Martin Ditto 42:15
well, you get back to this idea of like, are we trying to build cities for what people think that they want? Or are we going to trust our planning, and the architects and designers to actually read statistics and work with sociologists and economists and psychologists and, and actually think about how mental physical, emotional, spiritual health can be affected by what we design, how we program it, what the experience is, how we mix, people, and again, this is not social engineering. It's just this idea that, that right now, if you let the market do exactly what the market wants to do, it does social engineer, it's, I think that would be called institutional social engineering,
Atif Qadir 42:56
right? Where people make decisions based on their wants, but not necessarily in their best
Martin Ditto 43:01
where the private is with no where the private system like unfettered by any regulation ends up being more and more focused on a on a given demographic got it because it can make more money, because that's
Atif Qadir 43:13
most valuable demographic and chasing them as opposed to others.
Martin Ditto 43:16
And this is what people suggest and the economy, right. He's like, you know, if I want you to give the advice to you, that someone might give you is like, I want you to get really, really, really good at this one thing, okay. And then just do that over and over again. And, you know, that is good if you just want to make money, and, and maybe bad when it comes to creating a more equitable world.
Atif Qadir 43:37
Okay. And this evolution for us? What is the the timescale of it? What's the physical scale? How are you? How are you imagining that? And where do you see that going forward?
Martin Ditto 43:50
So we're looking at it as a next generation of Oslo, we're not calling it Oslo, because it probably will not be very similar in lots of ways, like a lot of Helsinki or Stockholm. And so well, that the, our design team is very cool. And they have, we have agreed that for now, it will be referred to as dito 8.0. Okay, so that's our that's our code words.
Atif Qadir 44:12
And the eight means so are our partners in this
Martin Ditto 44:15
is a is an amazing design team, who probably most famous for being Apple secret weapon, okay, they were involved with the app, the design experience, or the retail experience for many, many years. And so I thought it's funny to call it did away point out because, you know, you have different iterations of a company and, you know, our next iteration.
Atif Qadir 44:35
So then, given that you are looking towards that, and what would you say is the place for Oslo atmo in the arc of your career so far?
Martin Ditto 44:47
I mean, I think in some ways it's it's a pinnacle of like these jewel box properties that I had been headed towards doing and and I'm I'm very proud of how it turned out and how eventually the community rallied around this design and how it's been received by residents. You know, and I did a partnership with a with an artist and architect named Hiroshi Jacobs to design a custom handrail system that is, I mean, it's absolutely critical. It's totally gorgeous. Yeah. And he's, and that just that partnership to me was a lot of fun. And so it to me, it's a, it's a pinnacle for some things that we were doing, and it's a transition point for other things.
Atif Qadir 45:30
Okay. We have time for a few questions.
45:36
Very interesting to talk or hear you talk about traditional housing, and then lifestyle housing, and also talk about brands. So I'm interested to know about the brand extension and brands extensions of what you mean by brand, and how the branding and the lifestyle start to influence how you design things, how you market them, and how you perceive them.
Martin Ditto 46:00
So if I, if I think about brand, and how how it's evolved in my life, from how I understood it, I assume I knew the word brand, when I graduate from college, when we had brands, Procter and Gamble had all these brands. But I didn't think of a company as a brand. And so I think the Zuta was a great example to me of sort of a Tom Osito of a man who really believes in brand way before everyone understood that. So that was a good introduction to you know, how that might, you know, how that might be helpful. I think that I then learned that, that if I made my product a little bit better than my competitive set that would bolster my brand. And then after I started to learn more and more about design, I realized, well, if I really work with fantastic architects, then I can create a look and an idea and a feeling an emotional kind of take on my brand, they created even more value. And, you know, then then I started to, you know, wanted to learn about light, and, and lighting, and, and furniture and art and, and so I've just started layering on all these other elements. And ultimately, all of those elements come together to create experience. And what's so fun about a hotel, for instance, or a resort is that you know, beyond an apartment building, you build the walls, and then you kind of exit and you and then people bring in their own furniture and design and music and smells and food. And so you know where we're headed is is is is that we are bringing more and more experts into our company and into our product and into our collaboration for Doa point out so that the ultimately experience is is literally for a certain subset of the population unbeatable, on on unbeatable and any other ever competitive set. And that's what brand means to me is brand is that I remember being they're living, they're experiencing it, whatever, based on what they created. And so it's it's the it's the essence of what someone walks away with.
48:11
So you also mentioned in the beginning that you had been living in a small city such as Nashville. And if you go back to Nashville today, I'm wondering how the sense of what is happening in the Nashville scene, and how it's developing today implies a sense of brand because of the uniqueness of that place.
Martin Ditto 48:32
That's interesting. Nashville definitely has a very strong brand that is bigger than it just being a southern city or Music City or, you know, now it's a healthcare city and university city and a state capitol and all the things you know, I think for Nashville, it has a lot of different things going for it, which adds to that brand. And so maybe that's a great example of, you know, Washington DC has amazing civic design and has power from the seat of government. And then it slowly added more to things its repertoire, which Nashville had gotten from an artistic perspective and government perspective and those for a long time. So I think that all of those things of Nashville way into it. I thought where you're going with that is kind of like how has the brand of Nashville changed. And that's interesting is more commerce comes to Nashville and more more people who are looking for more places to live, it starts to change the nature of Nashville. And for some people, that's good. And for some people that's not good. And that's really where we're starting to investigate is how can we make sure that when we go somewhere, we're not like I mean, you know, we we renovate, we take a parking lot we build into a building, so it's hard to argue that that's not better for everyone. But if you take an existing plot of land that has some residents on it and rebuild it well, now we're gonna start to manage now there is actually some winners and some losers potentially. And so that piece that social The responsibility piece and kind of how how what we're doing affects the greater environment is becoming, you know, it's always been interesting. But but that was like more of a more of a of a intellectual kind of exercise. Now it's central to how we think about what we do and who we partner with.
Atif Qadir 50:24
Well, thanks so much for joining us today, Martin, of course. Next time I'll be interviewing Karen stone Lee, the founding partner at span architecture. Her design firm focuses on innovative residential and commercial properties across the Northeast. My name is olive gather, and this has been conversations and Michael's ribs.