Why Housing Equity Accelerator?
There is a crisis of diversity and representation in the real estate development industry. While affordable housing tends to be built and concentrated in communities of color, it is rarely built by firms owned and led by people of color. Fewer than 1% of private real estate development firms in the U.S. are Black- or Hispanic-owned, and the number of high-grossing Black and Hispanic private developers in the U.S. can be counted on two hands. That lack of diversity of Black developers translates into less affordable housing in Black communities, low rates of homeownership and a scarcity of retail and other businesses within those communities. It also translates into a lack of diversity in the product, with real estate projects overwhelmingly targeted to middle- and upper-income groups.
One of the major problems with diversifying real estate, according to Black developers, is that they often face hurdles in acquiring funds, and ultimately in expanding their businesses. Real estate development is a powerful wealth building tool, yet it is an industry predominantly occupied by and beneficial towards White men. Black and Brown developers lack the content knowledge, connections and capital to navigate and build wealth in this space.
Building capacity within the organizations most deeply connected with communities to be served will increase the responsiveness of projects to community needs. Increasing the overall number of organizations engaged in affordable housing will help to increase the overall production and preservation of units, so desperately needed in our region.
HEA takes a holistic approach in building capacity with HEA Fellows based on 3 key components of success: Content, Connections and Capital.
Content: LISC will provide 12 months of customized curriculum and ongoing technical assistance on a full range of topics in real estate development, affordable housing and business development. This will establish a strong foundation that enables them to scale their businesses to build more affordable housing.
Connections: Being part of a broader professional network of developers, housing providers, consultants, public agencies and other content matter experts is key to the success of any real estate developer. This is especially important for emerging Black and Brown developers. HEA works to cultivate connections within a local and national network of partners, and within the cohort itself.
Capital: Real estate development is capital intensive, however a lack of capital is the biggest barrier for Black and Brown real estate developers. Systemic and racist practices, such as redlining, have limited the ability for many to accumulate wealth. Discriminatory lending practices have limited their access to capital. Through this program, Fellows will be able to access grants and loans to accelerate the growth of their businesses and the development of their projects, creating more affordable housing.