Equitable Path Forward - From Enterprise
Equitable Path Forward is a five-year, $3.5 billion nationwide initiative to help dismantle the deeply-rooted legacy of racism in housing – from the types of homes that are built, where they’re built, who builds them, and the wealth that is generated from them.
The multipronged initiative establishes an equitable path forward for Black, Indigenous, and People of Color (“BIPOC”) and other historically marginalized housing providers by:
Filling the gaping capital gap from decades of systemic racism
Strengthening providers through advisory services and other nonfinancial support
Creating new career pathways to diversify leadership in real estate
By investing in these housing providers who are on the ground and engaged with their community, Equitable Path Forward will lead to a new and needed level of responsiveness, investment and equity in the communities that get built.
The Challenge is Urgent
After decades of systemic racism in housing – from government-sanctioned discrimination like redlining and race-based federal mortgage programs, to restrictive deed covenants based on the color of your skin, to predatory lending and discriminatory property tax collection – our communities bear the scars. These policies and practices have led to:
Home ownership rates for white Americans that are nearly twice as high than for Black Americans.
A widening wealth gap with the median net worth of a white household nearly eight times that of a Black household.
The real estate industry itself where only 2% of development companies are Black-led.
Just 1.5% of real estate assets under management are controlled by minority-owned firms. Even among community development corporations, only 16% are minority-led.
These disparities have been driven by a range of factors, among which, historically, housing providers of color – despite community knowledge and credibility – have been unable to access sufficient capital for sustained growth of their operations and real estate portfolios.
Closing the Gap with Three Main Pillars
Equitable Path Forward Growth Fund
A $350 million Growth Fund that will attract an additional $3.1 billion of debt, equity and grants to provide BIPOC-led and other historically marginalized housing providers both entity-level and project-level capital to grow their businesses and pipelines of affordable homes. Enterprise has seeded this fund with $10 million of its own capital. Specifically, Equitable Path Forward Growth Fund products include:
Entity-level lending. Including unsecured lines of credit to support organizational growth through Enterprise Community Loan Fund, Enterprise’s nationally recognized Community Development Financial Institution (“CDFI”) – among the hardest-to-access capital, the lack of which has created a ceiling for small developers to grow, particularly for developers of color, many of whom because of given wealth disparities don’t have access to the “friends and family” growth capital.
Entity-level grants. Through Enterprise’s Solutions division, which aggregates and deploys philanthropic capital to additionally support organizational growth.
Project-level equity. Through Enterprise’s Housing Credit, Conventional Equity, New Markets Tax Credit and Opportunity Zone platforms, among other sources.
Project-level debt. Through Enterprise’s CDFI, among other sources.
To maximize the leverage of this capital, Enterprise will incorporate a Standby Guaranty Facility – initially backed by Enterprise’s balance sheet as it seeks additional investors – for housing providers to compete for institutional capital on a level playing field. This will enable larger, lower-cost and longer-term investments in affordable homes developed and preserved by providers who have historically lacked the balance sheet required to attract this capital in the first place or, if able to attract capital only do so at costly terms that dilute the ability to scale their pipeline and build wealth.
Equitable Path Forward Developer Advisory Services
A $15 million program to deliver comprehensive consulting, networking facilitation, business services and evaluation support to help organizations and businesses working in communities across Enterprise’s nationwide footprint expand their capacity and be better prepared to deploy and leverage capital to preserve and create affordable homes.
Equitable Path Forward Leadership Program
A $10 million, two-year rotational program in real estate – modeled after the distinguished programs at major industrial and financial firms – for future BIPOC and other historically marginalized leaders.
Equitable Path Forward capital and expertise will be deployed nationally, with a focus in the following cities and regions across the United States: Chicago, Denver, Detroit, Gulf Coast, Mid-Atlantic, New York, Northern California, Ohio, Pacific Northwest, Southeast and Southern California.