In a predominantly white real estate development industry, a Seattle-based nonprofit wants to help developers of color get much-needed affordable housing projects off the ground. .
HomeSight, a nonprofit developer and financier, on Tuesday launched a new fund to support small developers in the early stages of building affordable homes for sale.
Funded by Amazon, JPMorgan Chase & Co., and the Washington State Housing Finance Commission, the fund helps developers of color in the early stages of construction research potential sites and obtain legal assistance. , plans to provide a grant of $550,000 to help build up funds to secure the property. .
Another $1.5 million will go towards low-interest financing for next steps, including hiring consultants, architects and engineers to put together plans and apply for building permits. Initial development costs vary depending on the project. Uche Okezie, director of real estate development at Homesight, estimates that pre-development work for a townhome development, for example, can cost an average of about $75,000 per unit.
The fund focuses on supporting Black developers and is open to all developers of color. Okezie said in an interview that given the wealth gap and discrimination, black developers are more likely to start with smaller portfolios and face more challenges in obtaining financing for construction projects. Ta.
“They don't have the financial support compared to white people, so it's a little harder for them to get started,” she says.
builder of People of color across the country face similar challenges. According to some estimates, the percentage of black developers nationally is less than 0.5 percent. According to a 2020 report, only 5% of the members of the Urban Land Institute, a real estate and land use organization, were Black. Organizations in Washington, D.C., and California have launched similar efforts to support developers of color.
The website names the initiative the “Field Order 15 Fund.” The fund, named after an 1865 order that designated land in the South for newly freed slaves, is often referred to as the “40 Acres and a Mule” promise. President Andrew Johnson later rescinded this order. The group calls the new program an attempt to “achieve abandoned equity goals.”
This new fund is part of a larger effort to help 1,500 low- and moderate-income Black families buy homes in South Seattle, South King County, and North Pierce County. To achieve this goal, the region needs to support more developers interested in building affordable housing for first-time homebuyers, said HomeSite Executive Director Darryl Smith. He said there is.
The Field Order 15 Fund supports the development of homes for sale that are affordable to people making 120% or less of the area median income. This equates to about $131,000 for a couple living in King County and $103,000 in Pierce County.
Homesight hopes to start distributing funds to developers within the next three to four months.
Mr Okezie said by diversifying the people building homes across the region, it could serve as a role model for the industry and also diversify the types of developments being built.
“I want to be able to say I bought my house from someone who looked like me,” she says. “They understand what I want, and they understand keeping money in our community.”