Austin developer aims to fix Texas' affordable-housing problem
/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 U.S. 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."
