The excerpt below was originally published as: Credit Where Credit Is Due: Expanding Access to Capital for BIPOC Developers By Nisha Mistry, Shelterforce
The real estate sector has a history of exclusionary employment practices and underrepresentation of Black and Brown professionals. And the racial wealth gap itself has reinforced that underrepresentation. “Traditionally, real estate development has relied on family money,” explains George Ashton, managing director of strategic investments for the Local Initiatives Support Corporation (LISC). Many Black and Brown Americans lack access to the “network-based wealth” that underpins development, Ashton says, and so “[as a CDFI], we step into that void.”
“We need to learn as we go and keep making incremental changes.” — Annie Donovan, LISC COO
Other CDFIs around the country—and a growing number of corporate partners, such as Amazon—want to fill that same void. Over the past two years, the CDFIs have been pooling private and philanthropic dollars at breakneck speed to accelerate the delivery of capital, and often training and mentorship as well, to developers of color. Some of these programs, such as the Black Developer Capital Initiative (BDCI) launched by the Low Income Investment Fund in partnership with the National Affordable Housing Trust, exclusively focus on Black-led development firms.
Shelterforce first reported on this trend last year by highlighting the then-emergent racial equity programs led by LISC and Enterprise Community Partners, two of the nation’s largest CDFIs. Philanthropic and corporate investor support for these programs, and others like them, appears to be unstoppable. Nonetheless, there are real questions about the extent to which they can foster inclusive development.
CDFIs and Black and Brown developers all make it clear that there are no easy answers. However, by looking across the sector and better understanding the factors that shaped these programs, we can get a clearer picture of what the growing support for Black and
Brown developers could mean for the movement to close America’s racial wealth gap.
An article in Shelterforce by former LISCer Nisha Mistry looks at the ways CDFIs are working to dismantle longstanding discriminatory roadblocks that have kept BIPOC developers from capital and other opportunity. The piece, which quotes LISC COO Annie Donovan and LISC Strategic Investments director George Ashton, is part of a must-read Shelterforce series on systemic solutions to the racial wealth gap.
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