Amazon.com Inc. plans to devote $21 million to a new program designed to help more developers of color succeed, partnering with an Arlington nonprofit to launch a pilot of this effort.
The company announced Wednesday that it would create the free, part-time accelerator program whose goal it said is "to increase the number of professional real estate developers of color who focus on affordable housing and inclusive community building." Amazon expects to fund the pilot out of its $2 billion Housing Equity Fund, a pot of money devoted to affordable development efforts in the company’s major hubs of Seattle, Nashville and the D.C. region.
"With a bit of mentoring and new access to capital, we're hoping this ends up being the magic combination to support more developers of color," Catherine Buell, Amazon’s head of community development and director of the Housing Equity Fund, said in an interview.
Locally, the tech giant will work with Capital Impact Partners, a community development financial institution based in Arlington, to recruit participants for the two-year program and manage it. The company will work with similar organizations in Nashville and Seattle and aims to reach up to 30 participants across all three markets, but Buell said it could expand over time.
She hopes it can be particularly helpful for developers who already have some experience working on smaller affordable housing projects and are looking for a bigger platform. But she's also willing to work with people who have never closed an affordable deal before and need help navigating the "many layers of financing" necessary for such developments.
Racial equity has been a persistent challenge in the development industry, with racial justice protests in the summer of 2020 throwing a spotlight on the lack of diversity among executives in development firms across the country. The Urban Land Institute, a network of real estate and land use experts, noted in a recent survey that more than 82% of its national U.S. membership is white, with only 5% Black and 4.5% Asian American.
The Amazon program aims to make progress in reversing that trend by offering virtual classroom instruction on subjects such as “real estate fundamentals, affordable housing trends, public policy and financing best practices,” per the company, but also by providing networking opportunities and small group mentoring to overcome systemic barriers to entering the industry — one insiders have acknowledged is often particularly reliant on social capital. Buell said Capital Impact Partners is working to develop a roster of mentors within the development industry, but didn't share any names.
"The great thing about a mentor is they won't be looking over your shoulder, but they will have that background knowledge," Buell said. "Maybe this is your first entitlement process in a specific jurisdiction and you don't know how to communicate with them about it yet. They can help."
Even more crucially, the program will offer participants access to capital for “predevelopment expenses, such as architectural and engineering costs; permitting, survey, and site-planning fees; and market and feasibility studies.” Capital Impact Partners has been among the groups working locally to improve access to funding sources for developers of color, launching a $20 million loan fund for the purpose earlier this year.
The program will begin searching for applicants right away, Buell said. Anyone who identifies as a person of color and has some experience in real estate development in the D.C. region is eligible to apply.
The company announced concurrently that it’s working with Enterprise Community Loan Fund Inc. to hand out grants of up to $200,000 to developers of color from Amazon's housing fund for projects that preserve or create affordable housing around Amazon’s hubs in Greater Washington, Seattle and Nashville.
The tech firm has recently launched similar loan and grant programs out of the fund that aim to combat its own impacts on the local housing market. One offers grants for affordable projects near transit stations in the D.C. area, in addition to loans for affordable projects on land owned by Metro.
