Improving Diversity in California’s Affordable Housing Development
In California, affordable housing development creates billions of dollars in procurement opportunities each year. Between 2015 and 2020, developers spent upwards of $52B, with 60% going to construction-related costs. Yet, these resources have time and time again gone to white-led firms, with diverse firms losing out on billions of dollars in potential contracts.
With the escalating affordable housing crisis, the state is deploying an unprecedented amount of investment to meet this critical need. This presents a pivotal moment to drive forward racial and economic justice in California by investing in construction and construction-adjacent professional services firms led by people of color.
Diversifying the pipeline of people who share in the revenue resulting from vital public investments can have significant benefits. For instance, wealth can be increased amongst communities typically excluded from such valuable opportunities. Additionally, a significant number of families that the affordable housing developer industry seeks to house are people of color who are less likely to participate in the contract, construction, or professional services contracts associated with affordable developments.
By nurturing diverse construction firms, the volume of much-needed construction, design, and engineering can be increased successfully across the state.
In California, the majority of nonprofit affordable housing developers do not have procurement policies to address supplier diversity, despite being interested in such policy. This was revealed in a recent survey conducted by the Southern California Association of Nonprofit Housing (SCANPH) to assess how many affordable housing organizations have Diversity, Equity, and Inclusion (DEI) policies or goals for procuring vendors for projects.
The need to increase diversity in California’s affordable housing development is clear and the time is now. LISC LA Senior Executive Director, Tunua Thrash-Ntuk, has authored the following position paper, providing a framework for the state and local jurisdictions to establish inclusive procurement opportunities and advance principles of economic opportunity for diverse and women-owned firms to access development-related contracts.
“As the City of LA currently spends more than $10 billion in over 500k transactions annually, and we anticipate money from the $1.2 trillion infrastructure bill trickling down to our state and local governments, it is essential to ensure alignment to those dollars and how they can be invested to address the most relevant infrastructure equity indicator issues experienced by the most impacted demographics"
Undertaking the proposed efforts will therefore provide tremendous benefits to the State of California. Additionally, uplifting diverse construction firms and workers will help increase the annual number of homes built in California and help financially empower communities of color that have been alienated from upward mobility and prosperity.
Improving Subcontractor Diversity in California's Affordable Housing Development
READ PAPERIn an upcoming Changemakers LA podcast episode, we will be exploring the significance of assisting small business capacity building, accessibility, and the creation of a pipeline for supplier diversity initiatives and opportunities. Make sure to subscribe to our podcast to get notified when a new episode is released.
Additionally, LISC LA will be hosting a workshop on this topic at the Housing California Conference on Wednesday, April 6th at 10:45 AM, titled "Diversifying the Affordable Housing Supply Chain." The workshop will look at how stakeholders can make the affordable housing supply chain more diverse. Techniques to incentivize inclusive procurement, data collecting for goal-setting, and contractor network and capacity-building needs will all be discussed.
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