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Community Development Has Had An Interesting Relationship With Questions of Racial Equity

Bringing More Capital to Developers of Color

Racial Equity Initiative

Companies like Netflix, Twitter, and others have pledged millions in new financing for affordable housing, small businesses, and other community development projects to advance racial equity. Much of that money is flowing to LISC (Local Initiatives Support Corp.) and Enterprise Community Partners. In this piece, we look at how they are using those and other funds to try to improve the racial equity outcomes of affordable housing investment.

Leonard L. Adams Jr. - President & CEO of Quest CDC In Atlanta, Georgia

Quest Communities Is Leading The Charge

When Leonard Adams started his journey to build Quest CDC, a nonprofit developer of transitional and permanent supportive housing in Atlanta, he had no connections to the world of community development. He just knew that he wanted to use the properties he owned “for something a little bit better than just being Mr. Landlord,” he says. There was a clear need for housing for people who were trying to exit homelessness and were waiting for open spots in various treatment programs, as well as for those graduating from those very programs, and that’s where Adams started. Quest became a nonprofit in 2001 after a few years on the for-profit side. Over the last two decades Quest has served about 10,000 households. In 2019 alone it had $38 million worth of construction under way. And still, Adams says when he approaches some lenders, he is still made to jump through hoops that don’t match with his experience. For example, he’s been asked for personal guarantees in recent memory, which isn’t appropriate given his organization’s track record. Adams is a Black man, and he benefited somewhat from Atlanta being a region with a number of other Black developers, more than in most parts of the country. Although those developers weren’t trying to house the population he was trying to house, Adams still found it difficult to convince traditional lenders to take him seriously. After Quest became a nonprofit, Adams made connections to community development lenders and built a thriving organization, but he did so despite multiple instances of discrimination from lenders, repeatedly needing to prove himself despite his organization’s track record, and steep learning curves as he discovered things he didn’t know his staff needed to know, such as Low Income Housing Tax Credit compliance details.

Quest CDC provides Affordable and Supportive Housing to underserved individuals and families on Atlanta's Westside.

When Adams first connected to his local office of Enterprise Community Partners, a national community development intermediary, over a decade ago, it was a great relief to find a lender that understood his mission. “There wasn’t a bank in town that was gung-ho about what I was pitching,” he recalls, but Enterprise “immediately understood what we were about. I didn’t have to prove to them why [my mission] was important, we just had to figure out how to make the numbers work.” He has worked with the group ever since, availing himself of all the programs it offers, from lending to leadership training.

But he also noticed that many of those programs were overwhelmingly white—both in speakers and participating developers. And he noticed that the terms on the loans he was getting weren’t much better than those being offered by traditional banks. These are the kinds of things that Enterprise—and its counterpart LISC—are hoping to change with their recently announced racial equity initiatives.

Racial Equity’s Moment?

The murders of George Floyd, Breonna Taylor, and other people of color by police, and the disparate impact of COVID-19 on communities of color prompted moments of racial reckoning in 2020 for many individuals and institutions across the United States, and the community development field was not exempt.

Community development has had an interesting relationship with questions of racial equity. The field emerged from a combination of civil rights and grassroots organizing energy, determined to bring investment to neighborhoods that had been redlined, subjected to urban renewal, or otherwise disinvested from. However, over time the field became more technocratic, more involved in complex financing for affordable housing, and whiter. As in many parts of the nonprofit and social justice world, well-intentioned practitioners often assumed that doing affordable housing and community development work in ways that focused on income and ignored race would improve racial equity simply because the issues being addressed fall more heavily on communities and households of color.

​Those assumptions were already starting to shift pre-2020, but that shift has accelerated. Recently Shelterforce looked at how the focus on racial equity had brought in millions of funds and financing to community development from new corporate investors. Much of that is flowing to two of the largest players in the field—the intermediaries LISC (Local Initiatives Support Corp.) and Enterprise Community Partners. How are they using those and other funds to try to improve the racial equity outcomes of affordable housing investment?


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