Amazon commits $21 million to kick-start housing by developers of color
Amazon is funding a $21 million program to help real estate developers of color advance their careers. The free, part-time professional development program is offered in partnership with social impact and economic justice groups to support developers and facilitate affordable housing projects in three metro areas, including the Puget Sound region.
In announcing the initiative, Amazon said the two-year accelerator program will help real estate developers of color progress in an industry known for high barriers to entry, "namely capital investment, and practical experience."
"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."
As part of the instruction, the program addresses the challenges developers of color face when bidding for affordable housing projects. In addition to increasing the number of such developers, the goal is to also increase the number of participants who focus on affordable housing and inclusive community building.
Working with its program partners, Amazon will develop curriculums and networking opportunities that reflect the specific issues facing their communities. Participating organizations 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.
Concurrently, Amazon is also partnering with Enterprise Community Loan Fund, Inc. to administer grants of up to $200,000 to qualified real estate developers of color. The grants are open to anyone who applies to the Amazon Housing Equity Fund and needs assistance with the capacity-building and pre-development expenses associated with the preservation and creation of affordable housing within Amazon's three focus regions.
The accelerator program will initially support up to 30 total participants by providing:
- Virtual and in-person classroom instruction on real estate fundamentals, affordable housing trends, public policy, and financing best practices.
- Small group mentoring.
- Professional networking opportunities with industry leaders, researchers, and established real estate developers.
- Access to capital for pre-development expenses, such as architectural and engineering costs; permitting, survey, and site-planning fees; and market and feasibility studies.
Each partner organization will select their participants for the program based on three eligibility guidelines:
- Identify as a person of color.
- Work experience as a developer at a real estate development firm or organization.
- Real estate development activities focused in the Puget Sound region, Arlington region, or Nashville.
The latest initiative is part of the more than $2 billion Amazon Housing Equity Fund to net 20,000 affordable homes in its hometown communities in the Puget Sound region, in and around Arlington, Virginia, and in Nashville, Tennessee. Launched in January 2021 that Fund is designed to preserve existing housing and create inclusive housing developments. The Puget Sound region's share includes $285.5 million in below-market financing and grants with approximately 2,200 housing units expected to be preserved or created.
"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."
In a tweet, Amazon CEO Andy Jassy emphasized addressing the affordable housing crisis in underrepresented communities starts with removing barriers. "Amazon's new program provides Black, Hispanic and Native American real estate developers with training, mentorship and capital to kick-start their projects."
Data from various organization's underscore Jassy's point about underrepresented communities. According to 2020 Bureau of Labor Statistics data on professionals working in the Real Estate and Rental & Leasing Industry, 83.5% are white, 16.4% are Hispanic or Latino, 9.6% are Black or African American, and 4.3% are Asian.
The gaps are even more pronounced for senior executives in the U.S. commercial real estate industry. Three-fourths (75%) are white men, 14.1% are white women, 1.3% are Black men and less than 1% are nonwhite women, according to a 2017 study from the Bella Research Group and the Knight Foundation.
Developers of color also lack access to the capital and resources for much-needed affordable housing projects to help their communities. In a 2019 report, the Urban Land Institute found only 5% of its U.S. members are Black, even though this cohort makes up more than 13% of the U.S. population. More than eight of every 10 members of the nonprofit research and education organization for real estate and land use experts are white.
Amazon stated such disparities "translate into a lack of diversity at the project-development level that can subsequently exclude developers of color from working on meaningful and lucrative housing deals as cities expand."