Mayor Bill de Blasio and a bevy of city and state agencies announced last week a $210 million public-private initiative that will exclusively serve Minority and Women-Owned Businesses (M/WBEs) and nonprofit developers in its mission to support affordable housing development during the post-COVID-19 crisis.
Dubbed the New York City Acquisition Fund (NYCAF), the money will solely finance projects led by a M/WBE or nonprofit developer with a minimum 51 percent ownership stake in the project. The heightened focus on M/WBEs and nonprofits strengthens the fund’s alignment with the City’s commitment to a fair and equitable post-COVID-19 recovery and preserves the Fund’s limited resources for the borrowers most in need of favorable financing for their affordable housing projects.
“Affordable housing shouldn’t just offer a place for New Yorkers in underserved communities to live – its construction should offer opportunity to those New Yorkers, too,” said de Blasio. “I’m proud to stand with partners across the government to support developers who give back the most to the New Yorkers they serve.”
The Fund’s announcement is in line with the City’s new equitable ownership requirement to strengthen M/WBEs and nonprofits’ role on affordable housing projects developed on City-owned sites. The rule requires that an M/WBE or nonprofit partner hold a minimum 25 percent ownership stake in any affordable housing project awarded on public land.
Assemblymember Rodneyse Bichotte Hermelyn (D-Flatbush), who chairs the subcommittee of MWBEs said that equitable and affordable housing must be a top priority in the city’s COVID-19 recovery plan. “The New York City Acquisition Fund’s exclusive focus on M/WBE’s blazes a path toward a more equitable future for New Yorkers. I praise the Mayor, Task Force, and Commissioner Carroll for taking on this initiative,” said Bichotte.
Sideya Sherman, Executive Director of the Taskforce for Racial Inclusion & Equity and EVP of Community Engagement & Partnerships at NYCHA, said the fund’s shift to exclusively serve MWBEs and nonprofit developers is a game-changer for firms seeking the crucial acquisition capital they need to get ahead.
“We are thrilled that the Fund will be building on the City’s efforts to increase investments in M/WBE and nonprofit developers that share our deep commitment to the communities we serve,” said the city’s Housing Preservation and Development (HPD) Commissioner Louise Carroll.
NYCAF was established in 2006, and offers bridge loans to affordable housing developers to acquire vacant sites and occupied buildings and finance pre-development work. It was created through a partnership between Enterprise and The Local Initiatives Support Corporation (LISC), the city, and major commercial lending institutions and foundations.
LISC has been in operation since 1980 and specifically invests in low-income communities. Since April 2020, LISC NYC has made a mission statement to “eradicate the racial wealth gap for good, protect affordable housing for LMI New Yorkers, and build pathways of meaningful economic opportunity for all.”
“The NYC Acquisition Fund’s decision to channel funding toward M/WBE and nonprofit developers is a major step toward ensuring equitable access to capital and creating sustainable community wealth for Black and Brown New Yorkers,” said Valerie White, executive director of LISC NYC.