EXPANDING CAPACITY FOR MINORITY- AND WOMEN-OWNED BUSINESSES
HPD is expanding its Minority- and Women-Owned Business Enterprises (M/WBE) initiative to create new opportunities and services for M/WBE developers and contractors. This initiative seeks to increase M/WBE participation in the development of affordable housing under City-sponsored programs by providing access to professional development and mentoring; The New York City Acquisition Fund LLC offering low-cost financing options for site acquisitions and predevelopment costs; and encouraging developers to employ M/WBE contractors and professional service firms. Additionally, HPD is seeking New York State legislation that would empower the agency to create a pre-qualified list of M/WBE developers eligible to compete for certain new construction and preservation projects. Through these efforts HPD hopes to address demonstrated disparities in M/WBE participation in affordable housing development, strengthen the affordable housing development industry, and further its mission of providing safe and affordable housing to all New Yorkers. For more information, please read our press release.
Professional Business Development
HPD is working with the New York City Department of Small Business Services (SBS) to tailor existing courses offered through the SBS’s Construction Mentorship program to meet the unique needs of M/WBE developers. Developers who choose to enroll in these courses will have the opportunity to learn effective business planning, financial management, and strategies for winning and managing New York City government projects. SBS will also offer individualize business assessments to a limited number of M/WBE developers.
For more information on NYC SBS and their free services, visit: NYC Business Solutions
Improving Access to Capital
The New York City Acquisition Fund LLC plans to offer favorable financing terms to qualifying M/WBEs that otherwise may not be eligible for the Acquisition Fund’s standard loan products. These financial tools seek to address barriers to access to capital that many M/WBEs currently face.
To learn more about the New York Acquisition Fund, please visit: http://www.nycacquisitionfund.com/
Increasing Development Opportunities
To address the disparity in M/WBE developer participation, HPD is seeking State legislation to permit the agency to take additional steps to encourage M/WBEs’ participation in the affordable housing development market. This legislation will enable the creation of a competitive pre-qualified list (PQL) of M/WBEs (and joint ventures that include M/WBEs,) and a pipeline of City-owned sites that will be competitively solicited to that PQL. In addition, HPD is coordinating with the New York State Association for Affordable Housing (NYSAFAH) to match M/WBE developers with experienced, well-established developer mentors. These mentors will offer guidance to the M/WBEs as they sharpen project proposals and navigate the development process.
HPD will also be requiring all developers receiving HPD financing to submit utilization plans where the developers may voluntarily establish goals for including M/WBE contractors in their development projects. During construction, developers will submit semiannual updates listing the M/WBE general contractors, subcontractors, and professional services providers they have hired and the amounts that have been paid out under contracts with those entities. This program is intended to encourage all developers to include qualified M/WBEs in their development team wherever feasible and is line with similar initiatives such as New York State Homes & Community Renewal’s M/WBE program.
Disparity Study Executive Summary
This study compared sponsors of competitively-awarded HPD-financed affordable housing projects constructed or preserved as part of the New Housing Marketplace Plan (NHMP) to a representative sample of firms in the broader marketplace that were ready, willing, and able to act as developer/sponsors for HPD projects. The central aim was to determine whether there was a disparity in the utilization of M/WBEs relative to the availability of such firms. HPD’s Housing Policy Research and Program Evaluation group (HPRPE) was tasked with executing all data collection and analysis for this study.
The relevant marketplace was defined as active firms in the New York City area that perform residential development work. The analysis yielded a total of 6,671 firms that met the criteria. Of these, 1,630 were identified as being ready, willing, and able to act as a developer/sponsor of the type of affordable housing projects included in this study. 43% of ready, willing, and able marketplace firms were M/WBEs.
One hundred seventy unique sponsors were identified that were awarded one or more projects included in this study. Of these, 47 were classified as non-M/WBE and 15 as M/WBEs (24%). Of the 272 competitively-awarded projects analyzed here, 98 projects were awarded to non-M/WBE sponsors and 16 projects were awarded to M/WBEs (representing a 14% utilization rate). These projects comprised 21,805 affordable units, of which 9,295 were awarded to non-M/WBE sponsors and 1,024 to M/WBEs (a 10% utilization rate). The corresponding Disparity Index scores are 56.8 for the overall number of M/WBE sponsors, 33.0 for projects awarded to M/WBEs, and 23.3 for units awarded to M/WBEs—all well below the maximum score of 80 that the courts recognize as an indication of substantial under-utilization.
Existing Opportunities for Minority- and Woman-owned Business Entities
The results of the study spurred the development of HPD’s M/WBE Initiative. Businesses interested in learning about existing opportunities for M/WBEs are encouraged to visit the websites below:
NYC Department of Small Business Services - How to Certify with the City
NYC Department of Small Business Services - Construction Mentorship Program
NYC Department of Housing Preservation & Development - Local Business & Participation
New York State Homes & Community Renewal – M/WBE Corner