2023
Freddie Mac
INTERNATIONAL
AWARD
Innovations in Diversity
Innovation Title: Develop the Developer Company Website: freddiemac.com Year Introduced: 2020
Executive Summary What makes this program or initiative unique? In 2020, Freddie Mac introduced Develop the Developer — an innovative program inspiring reinvestment and development in historically underserved communities. The program started in Omaha, Nebraska and expanded to Tulsa, Oklahoma, in 2021, followed by Milwaukee, Wisconsin, in 2023. It is currently being expanded into other underserved markets in the U.S. Through this program, Freddie Mac addresses critical national housing challenges including: • Gaps in knowledge and critical skills for aspiring real estate developers. • The disproportionate lack of representation of women and Black, Indigenous and people of color (BIPOC) developers within the single-family and multifamily development industry. What was the purpose or goal? The real estate development profession lacks Black, Indigenous and People of Color (BIPOC) and women developer representation, hindering access to an industry that generates $203B annually. Furthermore, less than 1% of real estate developers in America are Black or Hispanic. Providing a gateway to education and resources for BIPOC community members with 0-3 years of experience in real estate development meets a critical need to encourage equitable professional development in an industry with a diverse representation gap. In addition, this program stimulates equitable and communitycentric affordable housing supply. 20
2023 Fourth Quarter
We have collaborated with educational partners to build robust training curriculums and to assemble technical assistance for emerging developers through standardized Develop the Developer Academy training opportunities in targeted markets. The Academy leads intensive cohorts providing training in foundational development and financing instruction, technical assistance, community connectivity and access to funding sources for emerging developers. What are the benefits and positive changes of this program or initiative? Developing new developers that live in the neighborhoods they work in helps to foster better relationships with community stakeholders and preserves the historical and cultural attributes of the community. In addition, providing education and resources to emerging BIPOC and women developers supports both professional development that spurs economic opportunities and increases the community’s chance to gain investment in areas that have experienced long-term, perpetual disinvestment. What are the indicators or metrics that demonstrate the innovation is effective? We track the demographics of enrolled participants, graduation rates, number of participants that move forward to start development projects, and access to funding. Thus far: • We have held nine cohorts — enrolling 94 new developers with a 100% graduation rate. • 83% of graduates self-identified as a minority and 63% self-identified
as women. • 53% of developers have launched single-family residential development projects yielding 197 new affordable housing units — 72% are in formerly redlined areas, 77% are in majority-minority communities. • Developer graduates have received over $32M in grant and subsidy dollars and obtained over $100M in financing to develop new affordable properties. How is it driving growth and if so in what areas? The Develop the Developer Academy is helping community members remove barriers to access capital. Developer graduates have obtained guidance and technical assistance to secure funding through various sources, including grants, loans, angel investors, and foundations that support minority-owned businesses and encourage economic progress. This program and its participants drive economic growth by creating housing units that may not have otherwise been developed in their communities. Many worked on vacant land lots that have been undeveloped for decades. Who does it impact? The Develop the Developer program is impactful to historically underserved communities of color and related stakeholders who are mission-driven to provide affordable, dignified housing to support a stable housing system in America. Our goal is to continue to expand access to the program and empower a diverse, equitable and inclusive workforce to support and revitalize our communities of color. www.diversityjournal.com