Building Trades

NYS Legislation Expands Opportunities for Minority Contractors

June 16, 2014
By Neal Tepel

New York, NY — NYS legislation has passed that allows HPD to create a pipeline of affordable housing development opportunities dedicated to increasing the participation of Minority and Women-Owned Businesses (M/WBEs) in HPD’s programs.

The new law, sponsored by Senator Young and Assemblyman Wright, who chair the state legislature’s housing committees, allows HPD to authorize additional measures which will increase participation by Minority and Women-Owned Businesses.

“This bill accomplishes two purposes,” said Mayor de Blasio. “Construction and rehabilitation of 200,000 units of affordable housing is a tall order, and we need a strong and diverse development industry, with new ideas, energy, and roots in all our neighborhoods, to accomplish our goals. At the same time, our affordable housing agenda is, at bottom, about promoting opportunity, and the opportunity to grow a business in development should be available to all those with entrepreneurial spirit and talent. This bill, like the Housing New York plan, is an ambitious and innovative effort to make development opportunities available fairly, by recognizing and squarely addressing some of the challenges faced by minority and women-owned development firms.”

The city administration believes that this program as well as Mayor Bill de Blasio’s Housing New York plan, will work to create local employment opportunities across the five boroughs. The legislation gives HPD the authority to implement a program and strategy that provides more opportunity for M/WBE developers. The legislative goal is for minority and woman developers and contracors to be provided tools and resources to compete effectively for City-supported affordable housing projects. However, some builders are already questioning the fairness of a process that gives preference to specific groups.

HPD will use its new authority to establish a pre-qualified list of M/WBE developers and joint ventures that will be eligible to compete for a designated pipeline of new construction and preservation projects supported by HPD. The firms on the pre-qualified list will be selected based on responses to a Request for Qualifications (RFQ) to be issued later in 2014 designed to identify M/WBE developers that show the ability to successfully take on construction projects.   
Each entity on the pre-qualified list will be matched with a mentor who is a member of the New York State Association for Affordable Housing (NYSAFAH), the statewide trade association for New York’s affordable housing industry. The pre-qualified M/WBE firms will then be given the opportunity to respond to a competitive Request for Proposals (RFP) to develop specific new construction and preservation projects.
HPD is also rolling out a suite of policies and programs that will provide financing to firms owned by minorities and woman. The New York City Acquisition Fund will offer low-cost financing options. In the past, these low-cost loans through the NYC Acquisition Fund have been available to small, nonprofit developers. The Fund has now extended these favorable terms to qualifying M/WBE developers that do not otherwise have access to much needed capital.

HPD has also begun requiring all developers receiving HPD subsidies to develop voluntary goals for hiring M/WBE contractors. Developers are now required to submit reports to HPD of M/WBE general contractors, subcontractors, and professional services providers they have hired and the amounts paid.  HPD will be tracking and monitoring the hiring practices of developers to ensure compliance. The program builds upon similar initiatives such as New York State Homes & Community Renewal’s MWBE program. 

“This is a critical program, not only for our members but for all minority and women-owned affordable housing developers in New York City,” said Jolie Milstein, President and CEO of the New York State Association for Affordable Housing. “NYSAFAH has had a longstanding dedication to and a proven track record of supporting M/WBEs across the state. This will have a significant impact on our efforts to strengthen the future of affordable housing in New York City and beyond."

June 16, 2014

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