A Latina real estate developer in Austin will be part of a $40 million grant initiative designed to bring diversity to the region’s booming real estate market while creating more affordable housing.
Why it matters: Real estate developers of color make up less than 5% of the roughly $175 billion US housing development market, per a statement from Wells Fargo, one of the banks funding the program, called Growing Diverse Housing Developers.
How it works: GDHD is a free, four-year project that will help 39 developers expand their businesses and overcome systemic barriers created by generations of racism and disinvestment.
- Seven real estate developers of color from Texas are participating.
- Alyssa Flores of Madhouse Development will have access to money for local real estate projects that could turn into mixed-income housing and businesses in underserved areas.
Background: Working for her Austin-based family firm, Madhouse Development, Alyssa Flores, a University of Texas and UT Law graduate and one of the GDHD fellows, is involved in the strategic planning and administration of housing projects.
- Madhouse developed the ThinkEast apartments off Shady Lane, but much of their focus is in South Texas.
What they’re saying: “You walk into a room with a bank, and you don’t see a lot of color,” Flores tells Axios. “We need to increase diversity, especially in development finance.”
- “Although you would think where the money can go, development goes, that’s not always the case,” she says. “Minority communities are generally disinvested. Unintentionally, we all have blind spots — but if you’re Hispanic you don’t miss that spot. If you’re Asian-American and grew up in Houston, you don’t miss that spot. Having a diverse company and a diverse industry helps every community.”
The intrigue: An April class-action lawsuit alleges Wells Fargo engaged in discriminatory lending practices against its Black customers.
- A decade ago Wells Fargo agreed to pay at least $175 million to settle accusations that it discriminated against Black and Latino borrowers.
- And in 2017, the bank paid nearly $36 million to about 320 members of a class-action lawsuit brought by Black financial advisers who had sued over racial discrimination, arguing they were steered into poor neighborhoods and shut off from winning new clients.
- More recently it paid $7.8 million to settle a claim by the Department of Labor that it had discriminated against nearly 35,000 Black job applicants for positions in banking, sales and support roles.
- Says Flores: “It takes bad moments to bring out really good results.”