Originally published at newsroom.wf.com. Wells Fargo ranked No. 29 on The DiversityInc Top 50 Companies for Diversity list in 2022.
The roughly $175 billion U.S. housing development market is known for high barriers to entry — and today, real estate developers of color make up less than 5% of the industry. To help address this gap, the Wells Fargo Foundation announced Growing Diverse Housing Developers, a $40 million grant initiative focused on expanding the growth and success of real estate developers of color, including Black- and Latino-owned firms.
Launched in collaboration with Capital Impact Partners, Low Income Investment Fund (LIIF), Raza Development Fund (RDF) and Reinvestment Fund, Growing Diverse Housing Developers aims to increase the supply of homes that are affordable across the country. Working together, these four Community Development Financial Institutions, or CDFIs, have selected 39 developers of color to take part in the four-year program. Participants will have access to lower-cost, flexible capital, as well as the training, mentors and resources needed to accelerate the production of multifamily and mixed-use housing development projects.
“We want to increase racial equity in real estate development, ultimately creating a more inclusive housing ecosystem,” said Bill Daley, Vice Chairman of Public Affairs at Wells Fargo. “One stark reality is that people of color are significantly underfunded and underrepresented in the real estate industry. Through Growing Diverse Housing Developers, we can help strengthen diverse housing developers, enabling them to grow their businesses, and at the same time, offer communities more affordable options for renters and homeowners.”
“This program confronts the systemic barriers that have kept developers of color behind many of their peers — barriers that have also limited the ability for communities of color to thrive,” said Ellis Carr, President and CEO of Capital Impact Partners and CDC Small Business Finance. “We are proud to work with Wells Fargo, LIIF, Reinvestment Fund and RDF to help both the people who will develop projects in communities across the United States and the community members who will further benefit from many of those same projects.”
“With this program, we can amplify Latino-led housing developers who too often do not have the support they need to succeed. And in doing so, we can increase the amount of quality housing developments across the U.S,” said Tommy Espinoza, CEO of Raza Development Fund, the nation’s largest Latino-serving CDFI. “Homeownership is key for communities of color because it creates stability for the family and is the quickest way to own an asset. We’re proud to work with Wells Fargo to create better opportunities for our communities.”
2022 program participants selected by coalition of mission-driven CDFIs
Through a $30 million grant from Wells Fargo, Capital Impact Partners joined forces with LIIF and Reinvestment Fund to create a national learning cohort of 27 housing developers (PDF), both nonprofit and for-profit, who are based out of California, Georgia, Texas and the Baltimore, New York City, Philadelphia and Washington, D.C. metropolitan regions. The developers will have access to capital and resources to advance their development pipelines and grow their business, including capacity-building grants funded by Wells Fargo, and more than $100 million in additional funding the CDFIs have committed toward innovative loan products.
“We don’t just build houses — we build communities where people want to live and can attain the best futures possible,” said Dr. Gina Merritt, Principal of Northern Real Estate Urban Ventures, LLC based in Washington D.C., and founder of Project Community Capital. Merritt is taking part in the Growing Diverse Housing Developers program and specializes in projects that provide residents with access to employment and health services, childcare, community spaces and other support services. “We use social capital to identify, qualify and train residents from underestimated communities with RTA — reliability, trustworthiness and ambition. Everyone deserves a decent, safe place to live and access to economic opportunity.”
J. Tommy Espinoza Growing Diverse Housing Developers Fellowship
With a $10 million grant from Wells Fargo, RDF launched the J. Tommy Espinoza Growing Diverse Housing Developers Fellowship, a four-year professional development program for Latino and Black-led real estate firms. The fellowship is comprised of 12 developers, including UnidosUS affiliates and other non-profits, who are already building and preserving multifamily rental housing and for-sale development projects across the country. The fellows will receive access to capital and mentoring, and will convene at least quarterly for learning sessions provided by RDF and the Council of Development Finance Agencies.
Julissa Carielo, construction entrepreneur and J. Tommy Espinoza GDHD fellow, co-founded DreamOn Development Company in San Antonio to “build things that matter,” including mixed-use housing projects that also bring jobs, businesses and services to underutilized areas. As one of the few Latina business owners in her field, Carielo says the RDF fellowship program “will provide invaluable funding for development projects, and connections to developers from all over the country that have a vested interest in creating more housing and transforming communities.”