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Underrepresented developers will soon have access to a $50 million fund to build more affordable housing in the state.
MassHousing, a quasi-public agency, and the nonprofit Massachusetts Housing Investment Corporation (MHIC) are partnering on the fund, which they say is the largest public financing program of its kind in the country.
The state’s housing production has not kept pace with demand, pushing home prices and rents to some of the highest in the country. As the state grapples with this affordable housing crisis, the new Equitable Developer Fund aims to increase and diversify the pool of developers who can build such housing.
Black real estate developers make up 0.4% of the industry, and Hispanic developers make up 0.16% of the industry, according to a report released last year.
“We’re facing a housing shortage, and we have to find a way to solve that housing shortage,” said Mody Turay, CEO of the Massachusetts Housing Investment Corporation.
The new fund will provide financing to developers from socially and economically disadvantaged backgrounds. Touray said access to capital is often a major barrier for these developers. Affordable housing can be expensive to build, he said, which often makes it difficult for developers of color to enter the field.
“This fund actually arms them in a meaningful way, and in doing so, gives them the agency to go into their communities and actually start developing in their own backyards,” Turay said. said.
The program’s organizers will also provide technical assistance to help developers “navigate the complexities of affordable housing,” he said.
The fund was established after MassHousing conducted a statewide hearing tour to understand the challenges faced by developers and find ways to increase participation in affordable housing developments. The $50 million comes from the state. The organizations hope to raise an additional $25 million from private investors.
Applications for funding are expected to open this spring.
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