Philadelphia To Launch Accelerator Program For Minority Developers, Backed By City Land

The city of Philadelphia knows how disproportionately White its real estate industry is compared to the overall population, and it is launching a program to attack the problem.

The Philadelphia Housing Development Corp. has issued a request for qualifications from developers of color to participate in a program backed by nonprofits, private companies and city resources, though much remains to be ironed out about the contributions of each, PHDC officials told Bisnow. Participants will receive a combination of technical assistance, mentorship and prioritized access to city-owned land to convert into affordable housing.

The RFQ is open to any developer of color whose company has at least one year of experience, completed projects worth at least a combined $250K, a minimum gross annual revenue of $100K and a history of obtaining debt financing worth at least $250K. The number of applicants accepted into the Minority Developer Program, as PHDC calls it, will not have a cap, PHDC President and CEO David Thomas said.

“In my perfect world, I’m not turning anybody down; I’m just tiering the applicants," Thomas said.

The MDP will ideally function differently for developers at various stages of their careers, with the smallest companies getting the most hands-on support. Participants will have direct access to PHDC staff to learn the ins and outs of applying to develop city-owned land, to be followed by actual requests for proposals open only to participants, Thomas said.

"We’re trying to take them out of the ocean with the sharks, because in many cases, the small developer just doesn’t have the ability to compete with a large-scale developer," Thomas said. "So we’re trying to teach them how to compete by having them compete against one another.”

The idea for the MDP began in December 2019 before the outbreak of the coronavirus pandemic delayed it for months. Work began in earnest in June 2020, with PHDC spending the time since soliciting input from developers of color, potential nonprofit partners and financial institutions, said PHDC Senior Vice President of Land Services Angel Rodriguez, who has overseen the Philadelphia Land Bank since before it was absorbed by PHDC.

Nearly all of the specifics of MDP still need to be pinned down, including which lots will be offered in the program-specific RFPs, who the nonprofit and private sector partners will be, and where financial support for the developers (and the program itself) will come from.

“At the current time, I’ve identified $1.5M to get us started, though we haven’t really figured out how to use it," Thomas said. "We’ll be looking at that based on the results of the RFQ.”

Once the deadline for responses to the RFQ passes on Sept. 27, program participants will participate in a "boot camp" on how to navigate the city's notorious land disposition process. After that, PHDC will begin to issue RFPs to participating developers.

“The core piece of technical assistance [MDP] offers is how to do business with the city, since we have the assets to help them understand," Rodriguez said. "And we recognize it’s not easy to work with us.”

Alongside the training process, PHDC will issue an RFQ for companies that want to participate in the mentorship part of MDP. By November, the city agency hopes to begin both issuing RFPs to participants and matching them with mentors, Rodriguez said.

The developers who proceed through the program will be required to build affordable housing on the lots awarded to them, which could be single-family or multifamily units, depending on the neighborhood surrounding the lots on offer, Thomas said. By requiring affordable housing, PHDC is attempting to address two different equity issues the city is facing at once.