Amazon continues to reach out to segments of the US economy, leveraging their resources to help groups and communities across the US. This week the company committed $21+ million to establish a model for professional training, mentorship, and capital funding for real estate developers of color.
The pilot two-year, part-time professional development program teaches key skills to real estate developers of color, while advising them on the ins and outs of career advancement. Lowering the barriers that these developers face when bidding for affordable housing developments is a key part of the program.
The initiative is part of Amazon’s previously established $2 billion Amazon Housing Equity Fund. The Fund’s goal is to create and preserve 20,000 affordable homes for individuals and families earning moderate to low incomes. It includes providing below-market loans and grants to housing partners, traditional and non-traditional public agencies, and minority-led organizations.
Since the Fund’s January launch, Amazon has already committed to preserve or create over 5,600 affordable housing units in the geographic locations surrounding Amazon’s home town, encompassing Washington state’s Puget Sound region, as well as the Arlington, Virginia region and Nashville, Tennessee.
In its press statement about the new Accelerator, Amazon addresses the underrepresentation of blacks in the real estate industry, citing their lack of access to the capital and resources that prevent the advancement of affordable housing projects needed by communities. The program seeks to increase the number of professional real estate developers of color who will focus on affordable housing and inclusive community building.
“With this accelerator program, we are laser focused on lifting up emerging real estate developers of color. We want to foster their professional growth through education and training, as well as improve their access to capital, which can be elusive to developers of color,” said Catherine Buell, director of the Amazon Housing Equity Fund. “If we are going to bring about lasting, holistic, and meaningful change to how affordable housing is developed, developers of color need to be a part of the solution.”
The announcement also refers to a 2019 report published by the Urban Land Institute, a nonprofit research and education organization for real estate and land use experts. The report reveals that just 5% of its U.S. members are Black versus 82% who are white, while Blacks are more than 13% of the U.S. population. This identified gap reflects not only the lack of diversity at the project development level, but that developers of color are not being given opportunities to participate in meaningful and lucrative housing deals as their cities expand.
The program will be implemented by local social impact and economic justice organizations in each region. They include the Local Initiative Support Corporation (LISC) in the Puget Sound region, Capital Impact Partners in the Arlington region, and the Urban League of Middle Tennessee in Nashville. Together they will develop curriculums and networking opportunities that reflect the specific issues facing their communities.
The accelerator program in its first year will support up to 30 total participants. Assistance includes virtual and in-person classroom instruction on real estate fundamentals, affordable housing trends, public policy, and financing best practices. In addition, each developer will receive mentoring and professional networking opportunities with industry leaders, researchers, and established real estate developers.
They will be given access to capital for pre-development expenses such as architectural and engineering costs, permitting and others. All part of putting people of color real estate developers on the path to success, while helping their communities.
“Developers of color bring enormous opportunity for creative and inclusive solutions to community-focused real estate development, but systemic issues continue to create multiple barriers to their success,” said Ellis Carr, president and CEO of Capital Impact Partners and CDC Small Business Finance. “Through this program, we are partnering with Amazon in helping open doors for people of color who can then pay their experience forward.”
Participants will be selected by each partner organization based on their identity as a person of color, relevant work experience as a developer at a real estate development firm or organization and the real estate development activities focused in the three designated areas.
At the same time Amazon is partnering with Enterprise Community Loan Fund, Inc. to administer grants of up to $200,000 to qualified real estate developers of color. These grants are open to those who apply to the Amazon Housing Equity Fund and need assistance with the capacity-building and pre-development expenses—for preserving and creating affordable housing within Amazon’s three focus regions.
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