The Pennsylvania Housing Finance Agency wants to get more women- and minority-owned businesses involved in building affordable housing and it’s creating a fund to help such businesses get started.
The Agency has created a Developer Opportunity Fund for Women-Owned Business Enterprises, Minority-owned Business Enterprises and community developers who are building affordable housing within Pennsylvania through the Low Income Housing Tax Credit Program.
“We have an opportunity to enhance our Low Income Housing Tax Credit program by encouraging the growth of smaller and newer developers who lack the experience and resources to be able to compete effectively,” said PHFA Executive Director and CEO Robin Wiessmann. “These firms are at a disadvantage because of limited experience and a lack of liquidity that hinders their growth. The Developer Opportunity Fund is aimed at helping these firms better compete to add more diversity and broader community representation in the construction of affordable rental housing.”
Weissmann said the need for such a fund became apparent after observing developers applying for tax credit allocations over the past few years.
She said they found that many small developers didn’t have the liquidity or net worth to meet the demands for tax credit investors and were forced to partner with larger developers or other third-party guarantors to meet the liquidity required.
These developers then ask these businesses to give up a substantial amount of their developer fee, making it harder for them to develop independently.
Weissmann said women-owned, minority-owned, and community developers bring unique and important perspectives that can benefit the design and construction of multifamily housing developments and help them better serve female and minority residents and communities of color and should be encouraged to bring their diversity to affordable housing development projects.
The agency PHFA’s hopes to have an initial funding level of $50 million for the fund, with the expectation that this would fund approximately ten projects during the first five years of the pilot. PHFA said it is planning to provide more funding for the program in the future and it is seeking other sources of financial support.=