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Five Greater Boston cities will train a lens on diversity of development teams as a first step toward elevating minority participation in commercial real estate.
The Commonwealth Development Compact program is a one-year pilot that emerged from discussions about overcoming barriers to entry in the industry.
Cambridge, Somerville, Lynn and Salem are following the lead of Boston, which began requiring developers to disclose information on the diversity of their project teams last summer.
Cities participating in the compact agreed that diversity, equity and inclusion (DEI) will comprise 25 percent of evaluation criteria when selecting developers for disposition of municipal properties. Private projects requiring zoning relief such as special permits and variances will be required to include DEI disclosures, and communities will expect DEI-related community benefits to be addressed in development proposals.
Research by consultants Grove Impact and the Knight Foundation indicates that only 0.6 percent of real estate in the Northeastern U.S. is managed by people of color.
“That has to change,” Cambridge Mayor Sumbul Siddiqui said. “We have to be more intentional in our policy-making and reaching out to these historically underrepresented communities.”
The Eastern Bank Foundation, the Builders of Color Coalition, Boston Society for Architecture and Civic Action Project partnered on the compact. Expansion of public-private diversity programs in Massachusetts could generate $700 million in new revenue and 17,000 new jobs, Grove Impact estimates.
At Monday’s signing ceremony, Lt. Gov. Kim Driscoll cited Massport’s groundbreaking role in making diversity a criteria in selecting developers for recent land dispositions in Boston’s Seaport District.
The city of Boston followed Massport’s lead in 2018, adding diversity criteria to its evaluation standards when disposing of public parcels for development.
Lynn Mayor Jared Nicholson, whose city has a non-white population of approximately 50 percent, said raising minority representation in project teams will generate more jobs for diverse tradespeople. The city is contemplating additional disposition of a publicly-owned parking lot near the MBTA’s Lynn commuter rail station.
“When we talk about public land, we need to hold ourselves accountable to the entire community. It’s not a simple private transaction between two parties,” Nicholson said.
More recently, public land-use agencies have turned their attention to private parcels which make up the bulk of development activity.
Last summer, the Boston Planning and Development Agency added diversity to required information submitted by developers seeking approval for projects. The information is not currently used to evaluate approvals, BPDA Director Arthur Jemison said at a NAIOP Massachusetts forum last week.
The Eastern Bank Foundation contributed $150,000 to the initiative, which included outreach and workshops with minority- and women-owned businesses about overcoming barriers to entry in the industry.
“We don’t have a lot of data on big development projects, so we wanted to understand the data and the barriers that small business owners, as well as the developers are really facing,” Eastern Bank Foundation Foundation Fellow Natalia Urtubey said. “We couldn’t do that without information and data, so that’s what really started this conversion.”
