$50 Million Initiative to Reduce Barriers and Support Minority-Owned Developers to Build More Affordable Housing

Effort Expected to Enable $500 Million in Private Construction Lending to Minority-Owned Affordable Housing Developers Through Partnership With Goldman Sachs and Community Preservation Corporation   

As Adams Administration Doubles Down on Commitment to Fight Housing Crisis, City Needs More Tools from Albany to Build Affordable Homes for New Yorkers 

New York City Mayor Eric Adams, New York City Housing Preservation Development (HPD) Commissioner Adolfo Carrión Jr., and New York City Housing Development Corporation (HDC) President Eric Enderlin today announceda new initiative to provide up to $50 million to help Minority Business Enterprises (MBE) developers overcome historical financial barriers and fully participate in the development of critically needed affordable housing for New Yorkers. Established in partnership with the Urban Investment Group at Goldman Sachs and the Community Preservation Corporation (CPC) the new “New York City Minority Business Enterprise Guaranty Facility” is expected to enable as much as $500 million in private construction lending to MBEs.  

Today’s announcement builds on Mayor Adams’ commitment to fight the housing crisis as he continues calls made in his State of the City Address for Albany to deliver a housing package this session that will help create the affordable homes New Yorkers need and deserve.   

“For too long, Minority Business Enterprises have faced systemic barriers and restrictive financial requirements in our construction sector that have prevented them from being a part of the solution to the affordable housing crisis,” said Mayor Adams. “Today’s $50 million initiative is a major step forward towards our goal of building a fairer, more equitable New York City while creating housing, jobs, and opportunity for all.  As we said in this year’s State of the City address: this city and this nation are facing a massive housing crisis. To face this moment, we must be a ‘City of Yes’ — ‘yes’ in my backyard, ‘yes’ on my block, ‘yes’ in my city, and ‘yes’ to our MBEs.”  

MBEs have historically faced challenges securing construction loans due to restrictive financial barriers, including lender guaranty and liquidity requirements, often resulting in the need to form a partnership with larger firms that dilutes their ownership and reduces their developer fees, or entirely prevents them from participating in affordable housing developments. The MBE Guaranty Facility removes those barriers by providing a total of up to $50 million in back-stop guaranties, allowing MBE developers to independently access the capital required to secure construction financing and develop city-financed affordable housing projects in New York City. The MBE Guaranty Facility includes a $25 million commitment from HDC on behalf of the city and a $25 million commitment from Goldman Sachs Asset Management over a five-year period, with CPC serving as the facility manager. The $50 million is expected to leverage as much as $500 million in investment in affordable housing. Goldman Sachs’ commitment is a part of its One Million Black Women initiative, which aims to deploy $10 billion in direct investment capital and $100 million in philanthropic capital over the next 10 years in partnership with Black-women-led organizations, financial institutions, and other partners to address the dual disproportionate gender and racial biases that Black women have faced for generations.  

To be eligible, developers must be a certified MBE with a strong development track record and a demonstrated need for the capital. Joint ventures are allowed if the partner is a non-controlling, not-for-profit entity, such as a faith-based organization. Eligible projects include affordable housing projects in the city’s construction financing pipeline expecting to close within six months and with a senior private construction loan up to $50 million. The MBE Guaranty Facility will provide guaranties up to 10 percent of the applicable senior loan value and will begin accepting applications in winter 2024, with the first projects expected to close by the end of Fiscal Year (FY) 2024 or early FY25. To learn more, MBE developers should ask their HPD project managers for more information.  

Mayor Adams is delivering on a commitment towards increasing economic equity across New York City, especially with Minority- and Women-Owned Business Enterprises (M/WBE). In FY23 — the first full fiscal year of the Adams administration — city agencies and affiliated entities awarded over $6 billion in total to M/WBE firms through the OneNYC initiative, the city’s goal to award $25 billion in contracts to M/WBEs by FY 2025, contracting with a record-setting 1,903 certified vendor firms. The M/WBE figures include more than $1.4 billion in contracts awarded to M/WBEs under the Local Law 1 program — setting a record in M/WBE contracts since the program’s creation in 2013 — and tied the city’s highest-ever M/WBE utilization rate of 28 percent for one fiscal year.   

Mayor Adams implemented expanded discretionary authority under the non-competitive purchase methods, unleashing millions of dollars in additional contract awards to M/WBEs. Using that method, the city also awarded a record-setting $175 million dollars in contracts to M/WBEs — a 60 percent increase over FY22 and more than double the contract value in previous fiscal years. Additionally, Mayor Adams appointed Michael Garner as the city’s first-ever chief business diversity officer to address historic disparities in city contracting and provide minority and women entrepreneurs increased opportunities to do business with New York City.  

The Adams administration is playing its part to build more housing, breaking several records for producing much-needed affordable housing amid a severe housing shortage in the five boroughs. Data released by the Adams administration shows that, in calendar year 2023, the HPD and HDC closed on financing for the creation of an all-time record-breaking 14,227 new affordable homes. HPD also directly connected more New Yorkers to homes than ever before, bringing nearly 13,000 households into affordable units in 2023. As part of “Housing Our Neighbors: A Blueprint for Housing and Homelessness,” Mayor Adams committed to expanding access to capital, and is ensuring that MBE developers have access to the opportunities created by this investment.