They went from rehab and jail to owning a real estate portfolio: ‘You own the hell out of this house!’

The Baltimore houses are in rough shape. They might be missing roofs, or even floors. Some have been inhabited by squatters. Rats come in. Cats follow. As David Lidz, founder of the Waterbottle Co-op , which rehabilitates the foreclosed homes, points out, the contents are hard to view dispassionately.

“When a family leaves, most of the time they leave a ton of stuff there,” he says. “You find old photo albums and caps and gowns and baby clothes.”

As Lidz sees it, these houses are a metaphor for so many of Waterbottle’s worker-owners – himself included – who are in recovery from substance use disorders or have had run-ins with the criminal justice system. “When we reach the bottom, we look like those houses inside,” the 58-year-old explains. “We’re just full of remorse and regret and guilt and pain. And we’re trying to clean all that out, so we can become a vessel of utility and service and spirituality and love.”

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Waterbottle, whose portfolio now includes 25 properties across the Baltimore area, is essentially born from some of Lidz’s lowest moments in 2002, when he couldn’t find a job. “In the 90s, I had a white-collar career in Washington DC as a government relations officer, which I drank away because I was also an alcoholic,” he says.

One day, he was out walking near the Baltimore sober house where he had been living. “I saw some dudes working on a vacant house,” he says. “I got to talking to them and they explained they were in this business called ‘property preservation’. It’s sometimes called ‘loss mitigation’ – where they get hired by large mortgage institutions to maintain and manage foreclosures.”

Standing on that Baltimore sidewalk, Lidz’s most immediate takeaway was that he could get a job like that . “I just needed a cordless drill, a digital camera, a shitty van and a shitty lawn mower and I could do the work. I could cut the grass and trash out properties,” he says. He recalls grueling days of working all by himself. “I would do things like remove stinky refrigerators that had been abandoned for years, and it would be, like, August and I would roll it out to my van by myself,” he says.

Lidz got more and more work, and soon needed to hire help to keep up with his commissions. In his own recovery journey, he says, “I was hearing that the best way to stay sober is to help other people stay sober. So I hired folks who were recovering from alcoholism or addiction or were coming back from jail or prison.”

Waterbottle’s hiring approach is one that Xiomara Rivas Brown, the organization’s human resources director, calls “radical inclusion”. Rather than fixating on employees’ past challenges, “we focus on skills and interest”, she says. “What can you do? What do you want to learn? What do you want to work on?”

As his crew grew, Lidz obtained his contractor’s and real estate licenses, rehabbing and gut-renovating houses. The only hitch was, he was borrowing money with high interest rates to purchase the properties. “We were bleeding money,” he says. That’s when Lidz and his colleagues struck upon the idea of becoming a worker cooperative. “I was aware of this new term – well, new to me – of impact investment, which is sometimes called ‘catalytic’ or ‘program-related funding’,” Lidz says. “We understood it to have better terms and lower interest rates than market-rate products.”

In 2020, they got Community Development Financial Institutions (CDFI) funding , which focuses on distressed communities, from the grassroots organization Seed Commons , and became a social enterprise : a business that uses its strategy, profits and capital to address societal concerns. About 3% of all global businesses are social enterprises, according to recent research from the Schwab Foundation’s Global Alliance for Social Entrepreneurship. These businesses generate $2tn yearly and are responsible for creating 200m jobs.

With support from Seed Commons, workers’ earnings increased. “We raised our wage rates from $11 to $17 an hour before we converted to co-op to $18 to $48,” Rivas Brown says. Jazmin Hernandez, who has worked her way up from trashing out properties to being on the drywall and window-install crew, says: “The most rewarding part of the job is bettering my economic condition.” She found the job through her life partner – and yes, the all-in-the-family aspect of the crew is definitely a thing, Lidz says, adding that his wife also works with Waterbottle.

Not only are the co-op members making more per hour, they’re also benefiting from their hard work in another way: when a property is renovated, it becomes part of the rental real estate portfolio that workers have a stake in. They have first dibs on assuming the lease on the freshly redone rentals. While the co-op owns 25 properties today, the goal is to rehabilitate 200 Baltimore properties by 2026.

Granted, being one of many owner-members can require a shift in mindset for some workers who aren’t used to a co-op model. “We push the employees to get involved,” Rivas Brown says. “We try to get them into meetings and show them balance sheets and numbers and renovation costs. We don’t want it to be like: Oh, management is doing this and workers are doing that.”

Or, as Lidz puts it: “This is your company, too. You’re a worker-owner. You own the hell out of this house.”