Black, Hispanic and other housing developers of color make up less than 5% of those who work in real estate in the U.S., according to reports from the Urban Land Institute and other industry groups.
The causes and barriers are many, but one that has the biggest impact is access to capital.
Especially when it comes to securing financing to build affordable housing, it’s not easy to get in the door, said Julissa Carielo, who leads a development company working on two historic rehabilitation projects expected to bring more housing and commerce to the West Side of San Antonio.
“But that doesn’t stop me from trying,” she said.
Carielo, co-founder of the DreamOn Group, was recently selected to participate in a four-year fellowship program sponsored by the Wells Fargo Foundation and focused on fostering the growth and success of real estate developers of color.
The “Growing Diverse Housing Developers” initiative was established with a $40 million grant in collaboration with a group of nonprofit financial institutions dedicated to community development, known as community development financial institutions or CDFIs.
Similar strategies to boost minority participation in the industry were launched last year, including a $21 million program by Amazon and a $30 million project by U.S. Bank and Enterprise Community Partners.
The Wells Fargo initiative provides selected participants access to lower-cost interest, flexible capital, as well as the training, mentors and resources needed to build multifamily and mixed-use housing development projects, according to a statement from Wells Fargo.
The developers also will have access to capacity-building grants funded by Wells Fargo and to more than $100 million in additional funding through the CDFIs.
“We want to increase racial equity in real estate development, ultimately creating a more inclusive housing ecosystem,” said Bill Daley, vice chairman of public affairs at Wells Fargo.
Carielo is among 39 developers based in California, Georgia, Texas and the Baltimore, New York City, Philadelphia and Washington, D.C., areas selected for the program.
She will participate with 10 other developers in the J. Tommy Espinoza Growing Diverse Housing Developers Fellowship, a component of the Wells Fargo initiative that provides four-year professional development opportunities for Latino and Black-led real estate firms. The fellowship is named for the founding president and CEO of the Phoenix-based Raza Development Fund, one of the participating community development financial institutions.
Espinoza fellows will receive access to both capital and mentoring and meet four times a year for training provided by Raza and the Council of Development Finance Agencies.
Carielo said the training and discussions on issues like federal housing tax credits, for example, are helpful to developers like her. Bank and financing leaders explain how other projects were financed in order to build housing developments deemed affordable, with rents tied to household income.
“To keep them affordable, you have to find an avenue that’s going to offset some of the cost in order for us to say it’s affordable,” Carielo said.
“Otherwise, the rents have to be high enough to cover the developer costs. We’re looking for funding that comes in to offset some of that cost so that we can reduce the rental part of it.”
A real estate entrepreneur, Carielo founded Tejas Premier Construction 16 years ago and, more recently, established the DreamOn development and property management companies with Rene Garcia.
Carielo was doing work for other developers and felt that with her own company, she could focus on the needs of her neighbors and partner with those who shared her mission to improve San Antonio.
“I love working with the community, and if we can provide solutions that are going to help them, then we’re a part of that solution,” she said. With DreamOn, her goal is to develop, build and maintain properties.
“We’re not a developer that’s going to come in and build something and then flip it,” she said. “Our goal is to stay with it long term.”
She applied to be part of the Wells Fargo initiative while also embarking on several major development projects in San Antonio.
DreamOn is leading redevelopment of the historic Basila Frocks building at 500 N. Zarzamora, a project of the economic development group Prosper West that’s currently in a design planning phase. The vacant dress factory will be rehabilitated into office, retail and food and beverage spaces.
“Early on, it was obvious to the selection committee for Basila Frocks that Julissa and Rene with the DreamOn Group had the interests of the Westside community at heart,” said Ramiro Gonzales, president and CEO of Prosper West. “While the project details and numbers were critical to every candidate conversation, Dream On was equally fixated on what the community wanted and needed from this project, what the engagement process would look like, and the impact potential for the neighborhood.”
The Scobey project, also located on the West Side, is expected to become another DreamOn development. An agreement is pending with the VIA Metropolitan Transit board, which owns the property, Carielo said.
In the former Scobey storage complex, a mixed-use development is planned for several buildings with the goal to create a transit-oriented development near VIA’s headquarters and Central Plaza transit center.
Carielo hopes to complete at least 10 housing projects during her time in the fellowship and thinks the program can help.
Without access to mentorship and capital, there would a lot of “trial and error” for a company like hers in trying to develop affordable housing products, Carielo said.
“Here, we’re getting it up front so it’s an amazing opportunity for us,” she said. “We can’t do it alone as developers. We need partnerships like this Wells Fargo grant to be able to keep it affordable. There’s no magic formula that happens without it.”
And as a woman in the real estate industry, Carielo has to build relationships and trust within the industry to get things done, just like everyone else, she said. So she is especially eager.
“I’m just super excited to get to play in the same arena,” Carielo said.
