Worcester Business Journal

8 Worcester Business Journal | June 24, 2024 | wbjournal.com PHOTO | COURTESY OF REBECCA AND DANIEL YARNIE New $50M public-private fund seeks to address both the housing crisis and the lack of diversity in development space opers in the U.S are white. In an attempt to both diversify the development space and help address the state's housing crunch, MassHous- ing, a quasi-public agency focused on affordable housing, and the Massa- chusetts Housing Investment Corp., a Boston-based private nonprofit, have teamed up to launch what they say is the largest publicly led financing program of its kind in the country. Announced in May, the Equitable De- velopment Fund is a $50-million effort designed to address disparities in access to capital in real estate. e fund aims to break down long-standing barriers keep- ing developers from underrepresented communities sitting on the sidelines, watching others benefit by developing the neighborhoods they grew up in. Helping Gateway Cities e fund will work by offering underrepresented developers who have BY ERIC CASEY WBJ Staff Writer T he current economic condi- tions impacting real estate development have led to delays of some of the biggest high-profile developments in Central Massachusetts, impacting even some of the largest property devel- opment firms in the country. At the same time, the real estate devel- opment space is facing a stunning lack of diversity, according to a March 2023 joint study conducted by Roxbury-based nonprofit Initiative for a Competitive Inner City and Washington D.C.-based consulting firm Grove Impact. e report found Black developers make up 0.4% of the industry, while Hispanic developers make up 0.16%. Further highlighting the lack of diversity in the space, the report found 111,013 of the 112,046 estimated real estate devel- experience in developing rental, home- ownership, or mixed-use projects the chance to access working capital lines of credit and standby letters of credit. Applicants are required to be previous or current residents for a period of five years or greater in one of the state's 26 Gateway Cities, which includes the Cen- tral Massachusetts cities of Fitchburg, Leominster, and Worcester. Devel- opers from Fram- ingham are also eligible, as are res- idents from census tracts where 51% or more of the households earn less than 80% of the area median income. ose who don't fall into one of the categories can still receive funds if they can provide documentation showing social disadvantage, including economic insecurity, barriers to educational access, disability, or membership in a group historically subject to prejudice. "What this fund does is gives [under- represented developers] the agency to go off and do projects when they're the first to see that there's an opportunity for a duplex on their street," said Moddie Turay, CEO and president of Massachu- setts Housing Investment Corp. "ey're probably the first to hear about those opportunities when their neighbors are thinking about selling. I think that what we're trying to do is empower those people that are active in the real estate space, want to build capacity, give them the tools that they need." Participants are required to seek hous- ing-related developments in the geo- graphic areas outlined in the eligibility requirements. MassHousing and MHIC want to raise an additional $25 million for the fund from private investors. Knowing the landscape Developers from underrepresented communities are uniquely equipped to serve the housing needs of those areas, said Walter Weekes, founder of Opti- mum Investment Realty Development. "Part of what we bring to the table as minority devel- opers is we oen know from differ- ent perspectives what will work in various communi- ties," Weekes said. "Because oen- times, if you live in those commu- nities, you know the landscape." Developers from underrepresented communities, even figures like Weekes who have been successful in the development space for years, say capital access remains the biggest hurdle. "Some of the more established firms are able to lock into more favorable terms, get better rates, or gain access to some of the funding that might be avail- able through the various state agencies," Weekes said. "What I have to do, what many other minority developers have to do, is to try to see how we can partner with other established firms to show some leverage. Oentimes, you may not have the balance sheet needed to move a deal forward." Optimum has a Boston address, but Weekes has been based in Worcester for the last quarter century, where he's a member of the Worcester Redevelop- ment Authority. He's working on two development projects in the city. "I do believe that this particular fund is moving things in the right direction. I think if the program is able to ac- complish its goal, it will help minority developers have access to funding," said Weekes, noting this type of financial support is critical for covering so costs or unexpected expenditures with the potential to derail projects. Rebecca and Daniel Yarnie, the Worcester-born owners of Northbor- ough-based Polar Views, are involved Developing equity Walter Weekes, founder of Optimum Investment Realty Development Moddie Turay, CEO of Mass. Housing Investment Corp. Rebecca and Daniel Yarnie were involved in the redevelopment of 34-36 Harrington Ave. in Shrewsbury into a mixed-use housing complex.

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