Email a Friend
NYC Department of Housing Preservation & Development

FOR IMMEDIATE RELEASE
Thursday, August 29, 2013

Eric Bederman (HPD) 212-863-5176


HPD COMMISSIONER WAMBUA ANNOUNCES BUILDING OPPORTUNITY: AN INITIATIVE TO EXPAND OPPORTUNITIES FOR MINORITY- AND WOMEN-OWNED BUSINESSES

 New Initiative Will Build Capacity and Increase Participation Among M/WBE Affordable Housing Developers 

New York City Department of Housing Preservation and Development (HPD) Commissioner Mathew M. Wambua today announced Building Opportunity, a four-pronged initiative to expand opportunities for Minority- and Women-Owned Business Enterprises (M/WBEs) to compete more effectively for HPD’s affordable housing development programs. Many M/WBE developers have limited access to affordable credit or land, constraining their ability to compete with larger firms for HPD subsidy in building affordable housing. To address these challenges, HPD is rolling out a suite of policies and programs aimed at increasing opportunities for M/WBEs to compete to participate in HPD-financed development projects and seeking State legislation to authorize additional programs in the future.

Currently, the City’s Administrative Code provides the means to expand opportunities for M/WBEs to participate in contracts to provide goods and services to City agencies, but no such program exists to expand opportunities for such firms to participate in affordable housing development projects that do not involve procurement of City contracts. Each year HPD provides millions of dollars in subsidies and low-cost loans to preserve and create affordable housing. In launching the Building Opportunity initiative, HPD aims to increase opportunities for M/WBEs to compete for HPD-supported affordable housing development work. For more information visit the Building Opportunity page HPD’s website. 

“This is the right thing to do. It is time for our development programs to catch up with the City’s other successful M/WBE engagement efforts,” said Commissioner Mathew M. Wambua. “For years we have encouraged opportunities for M/WBEs to compete for a fair share of City procurement contacts, and now we are providing a platform to help them build the experience and capacity that’s needed to compete in the City’s multi-billion dollar affordable housing development efforts. Through Building Opportunity, we are seeking to catalyze business expansion and job creation in the communities that HPD serves and to create a more competitive affordable housing industry that will further our mission of producing safe and affordable housing for all New Yorkers.” 

To increase M/WBE participation in the development of affordable housing, HPD is pursuing a four-part initiative. The measures include: 1) offering low-cost financing options for site acquisitions and predevelopment costs through The New York City Acquisition Fund, LLC; 2) providing access to capacity building and mentoring in conjunction with the City Department of Small Business Services (SBS); 3) encouraging developers to employ M/WBE contractors and professional service firms; and 4) targeting certain development opportunities to a pre-qualified list of M/WBE developers (or joint ventures that include M/WBEs). This last element requires legislation which will be introduced by the State legislature’s Housing Chairs, Senator Cathy Young and Assemblyman Keith Wright. 

Increase Access to Capital:

The New York City Acquisition Fund, LLC currently provides low-cost loans to developers of affordable housing and offers favorable terms to small, nonprofit developers. The Fund plans to extend these lending terms to qualifying M/WBE developers that may not otherwise have access to much needed capital. 

“The expansion of opportunities for Minority- and Women-Owned Business Enterprises (M/WBEs) to compete effectively and successfully for valuable affordable housing subsidies, is timely as it is welcome,” Denise Scott, Managing Director of New York City LISC. “This action by Commissioner Wambua and the NYC Acquisition Fund will help level the playing field and enable these businesses to grow and prosper while providing jobs and giving back to their communities. This is what building sustainable communities is all about." 

“Using the New York City Acquisition Fund to increase M/WBE developers’ access to capital coincides with the Fund’s goal: to help small developers better compete for scarce land to build much-needed affordable housing,” said Shola Olatoye, vice president and New York market leader, Enterprise Community Partners. “Many M/WBE developers started and grew their businesses in the very communities that resources like the Fund target, and Enterprise is proud to work with HPD and provide working capital to M/WBEs making New York City’s communities stronger.”   

Build the Capacity of M/WBE Developers:

HPD is currently working with SBS to develop a program tailored to M/WBE developers, and until the program is operational interested M/WBE developers are being directed to existing Compete to Win capacity building services. Developers who choose to take advantage of these services will have the opportunity to learn effective business planning, financial management, and strategies for winning and managing New York City government contracts. In addition, SBS and the Minority Business Development Institute will provide 10 M/WBE developers with individualized business assessments and develop strategies for building their capacity to compete successfully for development opportunities. 

“Since Mayor Bloomberg passed Local Law 129 in 2005, the number of M/WBEs certified to do business with the City has grown from 700 to more than 3,500, with firms receiving more than $3.2 billion in City contracts,” said Rob Walsh, Commissioner of the NYC Department of Small Business Services. “HPD’s new initiatives will help even more M/WBEs by opening up opportunities within the City’s affordable housing development efforts. I encourage all M/WBEs to take advantage of our Compete to Win services that can help firms access upfront loans, bonding, mentors, and more.” 

To apply for the SBS Compete to Win programs, interested firms can register on the SBS Business Solutions website. A brief questionnaire helps determine the appropriate level of service for applicants. 

Encourage Developers to Use M/WBE Contractors:

HPD will also begin 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 in line with similar initiatives such as New York State Homes & Community Renewal’s M/WBE program.

 

Increase Development Opportunities:

State Senate Housing Chairwoman Cathy Young and State Assembly Housing Chairman Keith Wright are introducing legislation this week enabling HPD to promote the participation of M/WBEs in its loan and disposition programs. Once enacted and signed into law, this legislation will allow HPD to designate a pipeline of development projects to be competitively solicited to a pre-qualified list of up to 10 M/WBEs (or joint ventures that include M/WBEs). The firms on the pre-qualified list will be selected based on responses to a Request for Qualifications (RFQ) designed to identify M/WBE developers that show the greatest potential to benefit from participating in the pipeline program. 

"This legislation will authorize the City to address the disparity in opportunities afforded smaller, less capitalized developers in affordable housing. I am glad to be advancing this initiative to help level the playing field for women owned and minority owned businesses, and to create economic development and increase job opportunities within smaller business entities,” said State Senate Housing Chairwoman Cathy Young. 

“Throughout my relatively new role as Chairman of the Assembly Housing Committee I have consistently heard the same request from emerging M/WBE developers- how can we gain access to the projects in New York City? I am extremely pleased to work with Commissioner Wambua to bring this initiative to fruition. These policies and programs represent a step in the right direction at addressing the disparities faced by M/WBE developers that they have known and fought to overcome for years. I will work diligently to ensure the success of the enabling legislation in Albany, and I look forward to cutting the ribbon at the first affordable housing development created as a result of our efforts,” said Assemblyman Keith L.T. Wright, Chairman of the New York State Assembly Standing Committee on Housing. 

The pre-qualified M/WBE firms will be given the opportunity to respond to a competitive Request for Proposals (RFP) issued by HPD to develop specific sites that provide opportunities for new construction and preservation projects. The projects encompass a range of building typologies, technical requirements and financial challenges that map to the unique capacity and experience gaps that M/WBE developers currently face and seek to close. Each entity on the pre-qualified list will be matched with a mentor who is a member of the New York State Association for Affordable Housing (NYSAFAH), the trade association for New York’s affordable housing industry statewide. 

“HPD’s M/WBE initiative formalizes the mentoring relationships New York’s leading affordable housing developers have been promoting over the last decade, and will enable us to not only support existing M/WBE firms active the industry, but also cultivate M/WBE firms new to the affordable housing field,” said Donald Capoccia, principal of BFC Partners and NYSAFAH president. “The barriers to entry into the affordable housing industry are high, given the capital requirements and many regulatory burdens specific to the industry. NYSAFAH commends HPD for its new suite of policies and programs - from project-based mentoring, to increased access to capital and back-office capacity - which together will enable more M/WBE firms to not only break into the affordable industry but become leading professionals in the field.” 

“I applaud Commissioner Wambua for taking this bold and much-need action to ensure that M/WBE businesses can compete on a more level playing field,” said Karim Hutson, founder and Principal of Genesis Companies, an MBE developer. “As affordable housing developers, we operate in a very challenging environment and this reality is even more prevalent for minority developers. Given the urgent need for quality affordable housing in New York City, it is essential that we increase opportunities for all qualified developers."

 As is legally required before implementing any race and/or gender conscious measures, HPD studied M/WBE market share and activity with regard to competitively awarded affordable housing development projects receiving HPD subsidy. The study showed that M/WBEs make up 42.6% of the relevant marketplace in the development community and compose 24% of developers awarded projects by HPD. M/WBEs were awarded 14% of the projects and developed 10% of all affordable units produced through City programs reviewed by the study.  

# # #

About the NYC Department of Housing Preservation and Development (HPD):

HPD is the nation’s largest municipal housing preservation and development agency. Its mission is to promote quality housing and viable neighborhoods for New Yorkers through education, outreach, loan and development programs and enforcement of housing quality standards. It is responsible for implementing Mayor Bloomberg’s New Housing Marketplace Plan to finance the construction or preservation of 165,000 units of affordable housing by the end of fiscal year 2014. Since the plan’s inception, more than 157,320 affordable homes have been created or preserved. For regular updates on news and services, connect with us via www.facebook.com/nychpd and www.twitter.com/nychousing. For more information, visit our website at www.nyc.gov/hpd.

.