A certified public accountant, Mr. Baker became a developer after seeing the power of real estate in his high-net-worth clients’ portfolios. With experience completing more than 30 affordable housing developments, including the Allen Young Apartments, a 107-unit project in Plainfield, N.J., and current work developing one of the first Passive Houses in the state, Mr. Baker has seen how developers of color get stuck.
To get funding for a project from a lending institution, not only does a developer need to to bring at least 20 to 30 percent equity, they have to show they have experience with such projects. Since a lot of Black and Latino developers don’t have large-development experience, they cannot get the financial backing — or the experience.
Oscar Sol, 44, co-founder of Green Mills Group, a Florida-focused development company, which built the $18 million 119-unit Forest Ridge community in Hernando, Fla., said that it took him a decade working for a large developer to master the “unique financing tool for affordable housing.”
Mr. Sol was lucky to get that training. It’s common for developers to only need small staffs, so “the opportunity to get in with a developer, unless they are massive, it’s not really there that much,” said Edmundo Gonzalez, 52, a developer in Jacksonville, Fla., who recently completed Villa Callisa, an 11-unit, luxury, waterfront townhome community in St. Augustine. This leaves many aspiring developers taking circuitous routes to enter the industry, often parlaying their knowledge and relationships from adjacent fields. Mr. Gonzalez has seen engineering, architecture, and construction be “great places to learn the business from the periphery” and “get your feet wet.” “If you are entrepreneurial and business minded in nature, and you want to make money, development is honestly where you go in all those fields,” he said. This path leads to fewer Black and Latino developers, because architecture and engineering also have very low representation.
Source link
