By Joshua Burd
The state’s Economic Development Authority is seeking input from minority- and women-owned development firms, as it lays the groundwork for a $20 million funding program to help improve diversity in the real estate industry.
The agency last week issued a formal request for information on the challenges that such companies face in accessing capital for residential and commercial projects. Specifically, it said it was seeking comments, questions, recommendations, facts, information, ideas and responses that will help it better understand the scope and variables related to how underserved developers access all forms of financing available to them.
The solicitation comes a month after Gov. Phil Murphy proposed investing $20 million to capitalize a so-called diverse developer fund, supporting projects led by builders of color, as part of a $65 million expenditure on new real estate initiatives in his Fiscal Year 2023 budget.
“New Jersey is among the most diverse states in the country and the resources we offer to developers and business owners must reflect that diversity,” said Lt. Gov. Sheila Oliver, who serves as commissioner of the Department of Community Affairs. “Over the past four years, we have established numerous programs that help make New Jersey a national model for inclusive and sustainable economic development. Feedback we receive through this RFI will help us continue to strengthen our commitment to small businesses statewide.”
The EDA detailed the program on April 21, pointing to a Black Enterprise article citing Bank of America’s Black Business Owner Spotlight, which found that 82 percent of entrepreneurs of color say they must work harder compared to their non-diverse peers. Another study found almost 60 percent of women entrepreneurs say they do not have the same access to capital as their male counterparts.
Both speak to key issues in Murphy’s economic agenda — closing the racial and gender wage gaps and encouraging thriving and inclusive New Jersey urban centers and downtowns, with a focus on reducing poverty.
“Capital is essential for any business owner or developer looking to launch or scale operations, maintain cash flow or cover operating costs,” said Tim Sullivan, the EDA’s chief executive. “Developing programs to support developers who often find themselves unable to access funding is paramount to our efforts of creating the stronger, fairer and more equitable New Jersey economy that Governor Murphy champions.”
The EDA said it wanted feedback and ideas from qualified entities, including but not limited to minority- and women-owned development enterprises, or MWDEs. It also hopes to gain input from community development finance institutions, community development lending units of medium and large banks, other mission-based lenders, community development organizations that work closely with MWDEs, state and local government entities and other stakeholders with perspectives on structural barriers and disparities encountered by development firms owned by minorities and/or women in terms of access to capital.
The authority said it also seeks interest and ideas on solutions to address those obstacles, including but not limited to, existing programs that address the disparities in financing available for residential and commercial development.
“This RFI is an important vehicle in helping us break down the systemic barriers that often keep MWDEs from accessing the capital they need to succeed,” EDA Chief Diversity and Inclusion Officer Michelle Bodden said. “We encourage stakeholders statewide to send us input to help us create a program that closes the racial and gender disparities that have existed for far too long.”
The EDA’s announcement came alongside statements of support from the African American Chamber of Commerce of New Jersey and the Statewide Hispanic Chamber of Commerce of New Jersey.
“We applaud the Murphy administration for their intentionality in the establishment of a Diverse Developer Fund,” said John E. Harmon Sr., the African American Chamber’s founder, CEO and president. “By doing so it will enable Black businesses to leverage resources that will enable them to bring their plans and ideas to fruition in a meaningful way. Moreover, if New Jersey stays committed to this type of strategy, it will overtime chip away at the systematic economic disparities that persist and improve the competitiveness of our state.”
“The New Jersey census data revealed that the Hispanic community accounted for 21.6 percent of the state’s population in 2020, likely approaching a number closer to 25 percent with underreporting and changes from 2020 to 2022,” said Carlos Medina, the Hispanic Chamber’s CEO and president. “Recognizing Hispanics’ vital role statewide, the Statewide Hispanic Chamber of Commerce of (New Jersey) supports any approach to knocking down barriers to equity in accessing capital, which is the number one challenge that the 120,000 (New Jersey) Hispanic-owned businesses powering the state’s economy face.”
According to the EDA, all questions concerning the RFI must be submitted in writing no later than Friday, May 6, 2022, via e-mail to MWDE-BarriersRFI@njeda.com. The subject line of the e-mail should read “QUESTIONS-2022 RFI-DI-141 – MWDE RE BARRIERS.”
Answers to questions submitted will be publicly posted on the authority’s website under the RFIs section, on or about Friday, May 13.
All RFI responses must be submitted in writing no later than 11:59 p.m. Friday, May 27, via e-mail to: MWDE-BarriersRFI@njeda.com. The subject line of the e-mail should read “RFI Response-2022-RFI-DI-141 – MWDE DEVELOPER BARRIERS.”