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How an Austin developer hopes to fix affordable housing

A Latino real estate developer in Austin will be part of a $40 million grant initiative designed to bring diversity to the area’s booming real estate market while creating more affordable housing.

Why is this important: Housing developers of color make up less than 5% of the roughly $175 billion U.S. housing construction market, according to a statement from Wells Fargo, one of the banks funding the program, called Growing Diverse Housing Developers.

How it works: GDHD is a free, four-year project that will help 39 developers grow their businesses and overcome systemic barriers created by generations of racism and disinvestment.

  • Seven real estate developers of color from Texas are participating.
  • Madhouse Development’s Alyssa Flores will have access to money for local real estate projects that could turn into mixed-income housing and businesses in underserved areas.

Background: Working for her Austin-based family business, Madhouse Development, Alyssa Flores, a University of Texas and UT Law graduate and one of the GDHD Fellows, is involved in the strategic planning and administration of housing projects. .

  • Madhouse developed the ThinkEast Apartments off Shady Lane, but they’re largely focused on South Texas.

What they say : “You walk into a room with a bank and you don’t see a lot of color,” Flores told Axios. “We need to increase diversity, especially in development finance.”

  • “While one might think where the money can go, the development goes, that’s not always the case,” she says. “Minority communities are typically disengaged. Unintentionally, we all have blind spots – but if you’re Hispanic, you don’t miss this place. If you’re Asian American and grew up in Houston, you don’t miss this place. this place. Having a diverse business and a diverse industry helps every community.”

The plot: A class action lawsuit in April alleges Wells Fargo engaged in discriminatory lending practices against its black customers.

  • A decade ago, Wells Fargo agreed to pay at least $175 million to settle charges of discriminating against black and Latino borrowers.
  • And in 2017, the bank paid nearly $36 million to about 320 members of a class action lawsuit brought by black financial advisers who sued for racial discrimination, arguing they were directed to poor neighborhoods and barred from win new customers.
  • Most recently, he paid $7.8 million to settle a Labor Department claim that he discriminated against nearly 35,000 black applicants for positions in banking, sales and support roles.
  • Flores says, “It takes bad times to get really good results.”

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