Wed., March 8, 2023 — Today, Community Housing Capital (CHC) announced a $34 million fund to increase access to affordable housing for people of color. The CHC BIPOC Affordable Housing Development Fund (“BIPOC Fund”) is initially made possible by a $17 million commitment from Arnold Ventures, with another $17 million coming from CHC’s own capital. With this commitment, CHC aims to address racial inequality in the housing market across 12 southern states plus Washington, DC, and reduce the racial wealth gap.
The racial wealth gap is wide and persistent. More than 50 years after the Civil Rights movement, the typical U.S. Black and Latino families possessed $24,100 and $36,050 in wealth, respectively, while the typical white family had $189,100. Housing security and housing affordability are impediments to building wealth for Black, Indigenous, and other families of color, some of whom have been excluded from homeownership and are more likely to be renters. BIPOC families’ ability to build wealth is more likely to be harmed during economic downturns, such as the subprime mortgage crisis in 2008 which wiped out half of Black wealth, and the pandemic which widened the racial wealth gap.
The BIPOC Fund will provide capital and strategic guidance to counter the trend through debt financing and prioritizing minority-led non-profit housing developers working in communities of color. It will preserve naturally occurring affordable housing and enable the building of new units for families earning less than 80% of area median income (AMI) across 12 southern states and Washington, DC.
“Too often, executives of color are excluded from funding opportunities or receive higher rates than their white counterparts, due to bias and other systemic challenges,” said Cindy Holler, President and CEO of Community Housing Capital. “The fund will infuse capital into minority-led organizations working in communities of color that have been denied wealth-building opportunities for far too long.”
Dana Chestnut, SVP and Chief Lending Officer, said, “NeighborWorks’ organizations across the southern region are aiming to develop $2.4 billion in real estate. However, because of liquidity concerns, they only pledge 1% of that amount, whereas for market-rate housing, developers typically pledge 25% to 30%. We looked at that gap and saw an opportunity to provide early, patient, and debt capital to the communities that would most benefit from it.” The BIPOC Fund will offer pre-development loans, land loans, bridge multi-family acquisition loans, and revolving lines of credit.
Arnold Ventures has committed more than $70 million in investment to affordable housing projects since 2021. “We believe that developers of color are an essential partner in closing the affordable housing gap in America — especially in communities of color,” said Chris Hensman, Director of New Programs, Arnold Ventures.
CHC aims to continue to build the BIPOC Fund, eventually expanding its reach beyond southern states and across the U.S. in places where housing affordability remains an acute challenge for families. In addition, CHC will collect data from its borrowers annually to understand its impact and reach.
About Community Housing Capital
Community Housing Capital (CHC) is a 22-year-old Community Development Financial Institution (CDFI) and 501(c)(3) created to facilitate the creation and preservation of affordable housing. Since 2000, CHC has, through its lending activity, created or preserved over 21,400 units of affordable housing and facilitated $2.9 billion in total development. Community Housing Capital is headquartered in Decatur, Georgia. For more information, visit its website at https://www.communityhousingcapital.org.
About Arnold Ventures
Arnold Ventures is a philanthropy dedicated to tackling some of the most pressing problems in the United States. Driven by a mission to maximize opportunity and minimize injustice, it invests in sustainable change, building it from the ground up based on research, deep thinking, and a strong foundation of evidence. Arnold Ventures is headquartered in Houston, with offices in Washington, D.C., and New York City.