🔒Aiming High: Black developers seek larger role in New Haven’s building boom

On a swelteringly hot day last August, city officials and neighborhood residents gathered at 340 Dixwell Ave. in New Haven to celebrate a long-awaited milestone.

Beulah Land Development Corp. Chief Operating Officer Darrell Brooks was set to break ground on a 69-unit affordable housing complex on a lot that sat vacant for decades in the mostly Black community.

Brooks’ father had first envisioned developing in the area back in the 1960s, citing the need for Black families to have safe and affordable housing.

“I’ve always had this passion to wonder — how come we in our community cannot have good sustainable housing?” Brooks’ father, Bishop Theodore Brooks Sr., mused at the event. “I’m a blessed, aging young man to have three fantastic sons to be able to help me bring about my vision.”

Several months later, Darrell Brooks was recognized with the Developer Investment Award at the Greater New Haven Chamber of Commerce's annual meeting.

The Brooks family’s achievements raise the question: Why aren’t more Black developers cutting ribbons as New Haven undergoes a building boom?

Obstacles for minority developers

A “glass bottleneck” is preventing many Black entrepreneurs from entering the development field and restricting the growth of the few Black developers currently in the business, according to a new national report by social-impact consulting group Grove Impact.

“There’s a stark representation crisis facing the real estate industry today,” Grove Impact partner Derwin Sisnett said in introducing the report. “With Black and Hispanic developers making up under 1% of the field, it’s no surprise that diverse communities continue to face significant housing challenges.”

The report, released in March, found that Black entrepreneurs represent 0.4% of all developers, while Hispanic developers represent 0.16% of the industry. Despite their small numbers, Black and Hispanic developers generated more revenue, on average, than similarly-sized white developers.

In addition to a lack of representation, Black developers in particular face a "revenue gap" that prevents them from moving from midsize to large projects.

At or above $50 million in annual revenue, the report found not a single Black developer and only one Hispanic developer amid 382 white developers in that range.

The consequences of the disparities are far-reaching, according to the report. By being mostly shut out of the development sector, Black and Hispanic entrepreneurs miss out on an industry that can be a powerful engine for building generational wealth.

Grove Group recommended more research on the factors holding back developers of color and more outreach to Black and Hispanic entrepreneurs. In addition, the report suggested that banks be required to release more data on their business lending, particularly applicants’ and borrowers’ race and ethnicity.

Cities can play a role by launching programs to support new developers and encourage more people to enter the industry, according to Grove Group.

In New Haven, a new proposal to create a land bank offers an opportunity to support Black developers in building housing in the city, Economic Development Administrator Michael Piscitelli said.

An established program in Hartford and Waterbury, a land bank can be used by a city to acquire properties to be set aside for affordable housing or other development benefiting the community.

“Modeled after a successful program at the Hartford Land Bank, this initiative will provide access to new development projects,” Piscitelli said.

New Haven’s planned land bank will also provide training for Black and Hispanic contractors seeking to enter the development sector, he added.

New Haven officials have taken an active role in making projects such as Beulah Land’s apartment complex move forward.

“The revitalization of the Dixwell Avenue corridor is driven by Black-led developers and we are committed partners at ConnCAT Place, NXTHVN and 340 Dixwell,” Piscitelli said.

In another effort, Livable City Initiative Executive Director Arlevia Samuel petitioned New Haven lawmakers in March to spend $5 million in federal pandemic aid to speed affordable housing projects across the city, including at least one helmed by a Black developer.

“This is an opportunity to invest in several existing shovel-ready rental development projects,” Samuel said in a letter to the Board of Alders. City leaders have made housing development a priority in spending some of the $53 million coming to New Haven under the federal American Rescue Plan Act.

Boston models collaborations

Connecticut cities might want to look farther north for a model of how to support Black developers, said Yves-Georges Joseph, founding principal of New Haven-based RJ Development + Advisors LLC.

Joseph has helped spearhead several developments in New Haven and New London, and a planned apartment complex near Science Park that he is partnering in may benefit from the new Livable City Initiative to kick-start construction.

Boston has implemented several public-private programs to support developers of color – including the innovative Massport Model, which prioritizes the involvement of smaller companies owned by women and minorities in larger development projects planned for city-owned land.

Programs like the Massport Model can help boost Black entrepreneurs to the next level, Joseph said. Unlike the second- and third-generation family firms like Winstanley Enterprises that dominate New Haven’s development scene, many Black companies are newer and lack the access to the key elements of the business, he said.

“There’s a saying in our industry that you have to control something: Either control capital, control a deal or control the real estate. If you don’t control any part of the transaction, it’s very difficult, if not impossible, to be meaningfully involved,” Joseph said.

“The question is how to create opportunities for underrepresented sponsors to control different aspects of a transaction,” Joseph said, adding that public entities can play a major role to enable access to property and capital. “It has everything to do with structuring public-private partnerships to kind of maximize underrepresented sponsors in a meaningful way.”

Boston has the right idea in bringing entrepreneurs from underrepresented communities into the largest and most ambitious projects, including the $550 million Omni Boston Hotel, which debuted in the city's Seaport district in 2021, Joseph said.

“Some of those transactions are billion-dollar deals,” he said. “They’re massively scaled transactions that are creating deliberate and intentional opportunities for folks who otherwise wouldn't be able to compete to be involved.”

Given New Haven’s smaller size and limited supply of developable land, the city shows strong support for Black developers, and more are launching projects, Joseph said. He is one of the partners in the $185 million ConnCAT Place on Dixwell, a mixed-use development with housing, retail and cultural space.

Also in Dixwell, artist Titus Kaphar spearheaded the development of NXTHVN, a $12 million arts incubator and gallery that has drawn attention from the national media.

Even so, more ambitious diversity targets for projects on what New Haven has for public land would allow more local entrepreneurs to grow and thrive, Joseph said.

“I think Black developers and developers of color are making strides across the country,” Joseph said. “I think there’s a tremendous amount of work left to do. I think we’ve far from completed the task, but I am optimistic and I absolutely do see progress.”