Neighborhood Allies’ New Equitable Growth Guarantee Fund to Support Real Estate Developers of Color with $1.25M Pilot Investment from the Henry L. Hillman FoundationLeave a Comment
Thank you to the Henry L. Hillman Foundation for awarding a $1.25 million grant to Neighborhood Allies in direct support of our new Equitable Growth Guarantee Fund — a game-changing tool of the recently launched Centralized Real Estate Accelerator that aims to help real estate developers of color, and community-based developers, raise private capital for their projects.
The Pittsburgh region is at an important moment of alignment: philanthropic, elected, business, nonprofit, and community leaders have a shared goal of making our real estate development system more equitable for Black developers and entrepreneurs as well as historically minority neighborhoods. In that spirit, Neighborhood Allies’ newly launched Centralized Real Estate Accelerator is working with community-driven developers to strengthen their abilities and technical capacity. In fact, we are currently supporting nine for-profit Black developers and eight community-based organizations with development projects in neighborhoods of color. However, lack of capital continues to be a persistent problem – one that contributes to a self-reinforcing cycle of wealth disparities in Black communities.
Issues such as lack of equity or credit access make it incredibly difficult for new or aspiring developers to access funds for predevelopment costs such as design fees, surveying, and more. The Fund will empower Black developers and community-based organizations to close collateral gaps on properties, leverage private investment, and build project equity and personal wealth.
We want to intersect this cycle of wealth disparities with our new Equitable Growth Guarantee Fund. Here’s how it works:
- Neighborhood Allies supports developers’ technical needs with our Accelerator services, such as access to pre-development funds; hands-on assistance with project strategy; budgeting, contract review, and more; as well as connections to a network of stakeholders.
- We then partner with banks and other financial institutions to structure credit enhancements that fit developer and project needs. Structures will target two key flaws in the system: lack of predevelopment funds for catalytic projects, and low property valuations in communities of color.
- As projects become successful, we can recycle the funds into additional projects.
Lowering the risk taken on by banking partners by backing developers’ loans will help Neighborhood Allies support small developers of color in achieving present and future success.
“This grant from the Henry L. Hillman Foundation allows us to launch an innovative new tool that gives Black developers and Black communities a chance to build wealth through real estate projects that are created with and for the community. Making real estate more equitable and nurturing true community ownership can help us make big strides in closing the racial wealth gap for Black Pittsburghers.”
– Matt Madia, Director of Real Estate Services
Through the growth guarantee fund, we hope to support 70 projects with $19 million in loan guarantees for Black developers and communities over the next ten years. We are thrilled to have the support of the Henry L. Hillman Foundation as we embark on this journey to a more equitable Pittsburgh!