CSH has launched a multimillion-dollar, five-year lending and capacity-building initiative geared toward shifting capital and financial equity to communities of color.
Called Redesigning Access by Centering Equity (RACE), the initiative targets housing developers led or owned by Black, indigenous, and people of color (BIPOC). It will offer pre-development, acquisition, and other loans with preferential interest rates for affordable housing projects that include supportive housing units.
In early March, CSH said it had allocated more than $60 million in loans and will distribute more resources over the next five years. In addition, the organization offers customized technical assistance and training and local and state advocacy geared toward the challenges and opportunities that uniquely face housing developers of color.
“The RACE Initiative is part of the CSH strategic direction focused on boosting supportive housing production and building capacity in communities most impacted by systemic inequality and structural racism,” said Deborah De Santis, CSH president and CEO, in a statement. “Combined with CSH’s nationally recognized technical assistance and consulting programs, we are poised to dramatically shift resources to communities affected by long-term homelessness and cycles of institutionalization.”
CSH, a leader in supportive housing, has designed and implemented numerous technical assistance, consulting, and other community-focused programs. CSH is also a Community Development Financial Institution, with a strong Aeris rating that offers a range of lending services. To date, CSH has awarded more than $1 billion in loans leading to over 385,000 homes for people experiencing long-term homelessness.
Access to capital remains the most significant barrier for BIPOC developers. Women and people of color manage less than 1.3% of the $70 trillion global financial markets comprising mutual funds, hedge funds, real estate, and private equity. Not surprisingly, just 2% of the real estate industry in the United States includes Black-led companies. This racial homogeneity in asset management lends itself to biases in lending and financing decisions forcing limitations on BIPOC developers, according to CSH.
“The finance system is strategically designed to reward developers who have both a development history and key relationships, and this is unfortunately not the reality for many BIPOC developers. I am excited at the prospect of filling market gaps, addressing inequities, and directing this initiative’s resources to BIPOC communities that disproportionately bear the burden of homelessness,” said Shellon Fraser, RACE lending project initiative director.
Fraser led the design of the RACE Initiative and is conducting its implementation along with Nicole Brookshire, director of consulting, and Pascale Leone, vice president of diversity, equity, inclusion, and belonging.
The Opportunity Finance Network was CSH’s initial funding partner for lending targeting BIPOC developers, and CSH is actively pursuing additional partnerships. At this time, the initiative is focused on markets in Chicago, Georgia, Los Angeles, New York, the San Francisco Bay Area, and the Washington, D.C., metro. With additional partners and collaborators, CSH hopes expand to other markets in the coming years.