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Harvey Yancey, H2DesignBuild Owner, joins Yahoo Finance’s Kristin Myers to discuss challenges facing black real estate developers.
KRISTIN MYERS: Now, gaining access to capital and funding is difficult for Black business owners, and it's no different for those in real estate development. That's a field that remains overwhelmingly white. But there's some initiatives that are being designed to change that. So let's bring on Harvey Yancey, owner of the construction firm H2DesignBuild.
Harvey, great to have you with us. So I want to first talk about the situation at hand. Very few people in real estate development are Black. But what are the challenges that you have faced in your own career? Is it just about money capital, or is it networking, all of the above, or something else?
HARVEY YANCEY: All of the above. There's different things that contribute to the lack of Black and Brown people in the real estate market. if it's networking, who do you know, or if it's from the banking institutions.
KRISTIN MYERS: Now, you're in Washington, DC, which, despite what I think a lot of folks think about at home, given Washington and politics, is a majority not white city. But given the developers there in the development space are mainly white, how has that impacted some of those Black and Brown communities?
HARVEY YANCEY: It's extremely different in this area because there's-- it's probably 1%, 2% of the developers are Black, or Black and Brown people that are performing some of the major projects in the city. And a lot of that is just access to capital and being able to get funded and understanding the process and being accepted in certain areas that some people don't understand on how to fund these projects.
So, and that's one of the things that we're all looking at and trying to change the dynamics of, you know, the process of getting capital. You know, if you live in Bethesda and get an investor or a banker to go to southeast DC, it's a little bit challenging when you don't know the area and especially if you are a Black developer.
KRISTIN MYERS: So, then, let's talk about the best way to change that. What is the best way to really increase the number of Black and Brown developers not just in DC, but perhaps also around the country?
HARVEY YANCEY: Well, there needs to be more diversity in the capital allocation of funds. And people need-- there needs to be more attention to specific areas and developers and being able to grow them, understand the process, and understand the risk that's involved by giving people the opportunity. If me or someone else comes into the bank or into an investment fund, it shouldn't be a different-- any difference if we're Black or white.
KRISTIN MYERS: So then is it a matter--
HARVEY YANCEY: And that's the challenge, and those are the things that need to change.
KRISTIN MYERS: Right. I'm wondering if it's a matter of the fact that so many initiatives have been announced just even recently. But this is not a new problem. And it's not a problem that has never been discussed before. It's been talked about for quite some time. And yet, we haven't necessarily seen that much progress being made.
So is it a matter of the fact that we need to start specifically calling it out and allocating these funds, saying, hey, you know what? We're going to put aside $10 billion. And we're only going to be giving this to Black and Brown developers going forward in order to ensure that folks like yourself actually get the funding that they really need in order to be successful.
HARVEY YANCEY: Well, it should be mandated in especially large municipalities where you see a lot of the growth in reference to the development. I'll give my hats off to the mayor and politicians of DC, is that they have different programs that have become available, one such as the HIP Program, which helps provide emerging developers, such as myself, scale and at the same time, invest in our dreams in a community, of growing our companies.
You know, HFA Department of Housing and Finance had started a program three years ago. I was building, you know, maybe two or three houses a year. And with that program now, I'm doing roughly 25 to 40 houses a year. And with that program, it allowed access for specific capital and equity for emerging developers, such as myself, to grow. And I think that is one of the biggest things that other areas should look into.
KRISTIN MYERS: I had a very quick question for you here. I only have about 30 seconds. Do you feel that there's been a push to get Black developers more into the affordable housing space, which, of course, has its own limitations?
HARVEY YANCEY: Yes, because we know the area. And if we're in these transitional areas, who else would you turn to? Who--
KRISTIN MYERS: Right, and of course--
HARVEY YANCEY: --understands the market better than we do?
KRISTIN MYERS: Right, and of course, there's also other more profitable areas. We're seeing some of those pictures on the screen of some of those beautiful homes and buildings that you have designed. I wish we had more time to chat. Unfortunately, we don't. Harvey Yancey, owner of the construction firm H2DesignBuild, thanks so much for joining us.