3 Best Practices for Partnering With M/WBE Developers
NHPF's Polina Bakhteiarov on how to maximize the benefits of these alliances for both parties.
Today, those in affordable housing seek to promote greater diversity, inclusion, and racial justice as we actualize long-established missions of providing sustainable, service-enriched homes and communities.
To this end, NHPF is committed to increasing access to opportunities for historically underrepresented individuals and businesses throughout the development cycle. This starts during the planning phase by structuring meaningful partnerships with firms that are minority and woman-owned business enterprises or “M/WBEs.”
A sure formula for success is to identify complementary areas of experience and expertise among the participating organizations. In these multi-partner joint ventures, each developer brings a particular value-add to the project to ensure a better overall result.
“Track record often becomes the barrier for smaller M/WBE developers,” said Jerrod Delaine, CEO of Legacy Real Estate Development. “In a joint venture partnership, that local M/WBE firm can pull together community support and trust. Then, the more prominent firm can raise and allocate the capital needed to do the deal. As a team, we can accomplish more and spread the risk.”
Below are some specific strategies to ensure that these joint ventures maximize each developer’s current potential and long-term success.
1. Identify partners with strong local credentials
Any national developer entering a new market will be wise to partner with a local group to integrate their nationwide expertise with the partner’s localized experience and knowledge, resulting in broader, more well-rounded overall capacity to execute on a development opportunity. NHPF recently partnered with Brisa Builders, a Black woman owned and operated developer-general contractor, on a public-private redevelopment proposal in Brooklyn, N.Y., where NHPF’s 30-plus years of national experience complemented Brisa’s deep local roots and numerous projects in proximity of the target site.
“Many M/WBE developers have highly community-oriented, localized missions, thus making for a great partnership with firms that are focused on the impacts on residents throughout the development process for substantive rehabilitation, tenant-in-place renovations, and preservation projects,” as Ericka Keller, CEO and managing member of Brisa Builders, explained. “When contemplating effective joint ventures, we look to partner with entities that have complementary skills and knowledge yet varied experiences and lenses. Although we are always philosophically aligned, we each bring different practical experiences and perspectives, which allow us to work collaboratively and creatively in formulating unique ways to accomplish our shared goals.”
2. Determine reciprocal programmatic niches
If you are an affordable housing developer and are looking to expand into workforce and/or market rate projects, identify a developer that specializes in those asset subclasses. When responding to several recent solicitations to serve as co-developer for various housing authorities, NHPF—which specializes in traditional affordable housing development—sought out partners specializing in workforce and market-rate housing to generate fully mixed-income and mixed-use redevelopment plans. NHPF has been working with The Peebles Corp., the largest Black-owned development company in the U.S., and their affordable and workforce housing subsidiary, Legacy Real Estate Development, on several project proposals like this across the Mid-Atlantic and Southeast regions.
“M/WBE partnerships are not charity—they’re good business,” said Legacy’s Founder and Chairman Donahue Peebles III. “Partnerships are successful when skillsets are complementary; for instance, our focus on market rate development complements NHPFs affordable track record in South Florida,” s
3. Partner with an eye towards future opportunities
Another strategy when exploring new markets is to seek out potential partners who not only complement you with their strengths and skillsets, but also have established or growing local development pipelines. While working on a potential public-private partnership in Nashville, Tenn., NHPF met Matthew Harrell, president & CEO of APK Development & Construction, who has gained tremendous traction in the affordable housing and redevelopment space in Louisville, Ky. Although the Nashville project did not move forward, NHPF and APK are now exploring other regional opportunities in the latter’s catchment area.
“The clear answer to nonprofits, city government, and federal housing agencies is to insist on developing partnerships with smaller, more localized developers in order to create pipelines of community-driven and community-connected housing developments,” Harrell declared. “Even if the first deal we consider is not feasible, we are always looking further down the road at opportunities to continue partnering for the good of the community.”
We see that it is possible to leverage entrepreneurship as a tool in combatting institutionalized economic inequities to begin closing the racial wealth gap in America. The question remains, however: How do we replicate and scale these project-level successes to accelerate M/WBE developer growth on the national scale for larger, more systemic impact?
Polina Bakhteiarov, senior acquisitions director, NHPF.