Building Resilient Communities: M/WBEs getting into the Housing Development game.
As the CEO of an Economically Aligned Housing Development firm (EAHD), I understand the significant challenges that Minority and Women-Owned Business Enterprises (MWBEs) face when accessing funds for real estate developments. However, several existing funds can help MWBEs make their real estate development projects a reality, and it's essential to be aware of the different funding options available.
One of the funding sources for MWBEs in NYC is the Community Development Block Grant (CDBG) program and Request for Proposals (RFPs). Administered by the Department of Housing Preservation and Development (HPD), MWBEs can apply for CDBG funding or compete for RFPs through HPD's Office of Development. The CDBG program funds various community development projects, including housing, infrastructure, and economic development. Another option is the New York State Homes and Community Renewal (HCR) program, which provides funding for affordable housing development. MWBEs can apply for HCR funding through the agency's Office of Community Renewal. The HCR program offers a range of funding options, including grants, loans, and tax credits, to support affordable housing development across the state.
In addition to these programs, MWBEs can access funding through the New York City Economic Development Corporation (NYCEDC). The agency's Real Estate Transaction Services team can provide financing and technical assistance to MWBEs, helping them navigate the real estate development process and identify funding opportunities. The NYCEDC offers other programs and services to support MWBEs, including business training and networking events. MWBEs can also seek out community development financial institutions (CDFIs) such as the Local Initiatives Support Corporation (LISC) and the Upper Manhattan Empowerment Zone (UMEZ). These organizations provide financing and technical assistance to support community development projects in underserved areas of the city.
We also make acquisitions and turn them into Economically Aligned Housing Developments (EAHD). Again, the goal is to acquire land and convert it into affordable housing using a combination of investor funds and tax credits. Here's how we approach the process:
Identify Potential Sites: We start by identifying potential sites for acquisition, focusing on areas with a high demand for Economically Aligned Housing Developments and proximity to transportation, schools, and other amenities.
Conduct Feasibility Studies: Once we identify potential sites, we conduct feasibility studies to assess the project's viability. We consider zoning regulations, environmental concerns, and community engagement.
Secure Investor Funding: Once the feasibility study is completed, we secure investor funding to acquire the land. We work with investors who share our mission of creating affordable housing for low-income families and individuals.
Apply for Tax Credits: We apply for various tax credits and programs, such as Low-Income Housing Tax Credits, to help fund the construction of the EAHD. These programs offer incentives to developers who create EAHD, and we take advantage of all available opportunities.
Collaborate with Local Government: We collaborate with local government agencies to ensure our projects align with their affordable housing goals. We work with agencies like the NYC Department of Housing Preservation and Development to secure financing and other resources.
Through these steps, we can acquire land with investor funds and convert it into affordable housing using tax credits and other programs. Our ultimate goal is to provide safe EAHD for those who need it most while also contributing to the economic growth of the communities where we live.
I recognize the importance of addressing the funding gap for MWBEs in real estate development. However, these funding gaps have real consequences for MWBEs and their communities. Without access to funding, MWBEs cannot compete with more prominent developers and miss out on opportunities to contribute to the city's affordable housing and community development initiatives. This limits not only economic growth but also perpetuates social inequality.
Policymakers must do more to support MWBEs in real estate development. This includes increasing funding for programs like CDBG and HCR and improving the certification process for MWBEs. Providing MWBEs with access to funding options for real estate development projects in New York City is crucial. Historically, MWBEs have faced significant challenges in accessing funding due to discrimination, lack of access to networks, and limited financial resources. However, we are committed to promoting diversity, equity, and inclusion in our industry and ensuring that MWBEs have access to the resources they need to thrive.
It's essential for MWBEs to have access to a strong network of mentors, advisors, and industry experts. Our firm prioritizes building relationships with MWBEs and providing them with the necessary resources to succeed. We offer mentorship, networking opportunities, and other support to help MWBEs navigate the real estate development industry.MWBEs in NYC have access to various funding options for real estate development, including government programs, private lenders, and community development financial institutions. However, accessing these funds can be challenging, and MWBEs must be prepared to navigate a complex regulatory environment and submit a strong application. We believe promoting diversity, equity, and inclusion in our industry is essential for creating a more vibrant and equitable city.
Here are some steps that small MWBE firms can take to access funding and become great affordable housing developers.
Build a strong team: Building a team with experience in affordable housing development is essential. Hiring a team of experts, including architects, engineers, attorneys, and financial consultants, is recommended to help navigate the complex affordable housing development process.
Research financing options: Research available financing options for affordable housing development, such as low-income housing tax credits (LIHTC), Community Development Block Grants (CDBG), and HOME Investment Partnerships Program (HOME).
Develop a business plan: A well-written business plan should outline the goals of the firm, its development strategy, budget, and funding sources. It should also include an analysis of the current affordable housing market.
Apply for funding: Apply for funding from government agencies, private lenders, and philanthropic organizations. Be sure to meet all application deadlines and provide all required documentation.
Build partnerships: Consider partnering with other MWBE firms or established affordable housing developers. Building partnerships can bring additional expertise and resources to the project.
Build a strong reputation: Reputation is everything in the real estate industry. Build a strong reputation by delivering quality projects on time and within budget. This will help secure future funding and opportunities for growth.
Following these steps, a small MWBE firm can access funding and become a great affordable housing developer in New York City. It's important to note that this process is complex and challenging, but it can be achieved with the right team, financing, and strategy.
Accessing funding and becoming a successful affordable housing developer in NYC requires a comprehensive understanding of the available funding sources and tax credit programs and a strategic approach to land acquisition and development. With careful planning and execution, it is possible to leverage investor funds and government resources to create much-needed EAHD in the city while generating returns for investors. By following a plan that works for your firm and seeking partnerships with experienced developers and community organizations, MWBE firms can play an essential role in addressing the affordable housing crisis in NYC and beyond.