Developers of color have been kept on the fringe of Chicago’s multifamily housing construction, The Urban Institute found in a new analysis highlighting a significant lack of diversity in a crucial segment of the real estate industry.
The institute’s study, which reviewed building permits issued between 2019 and 2023, found that less than a quarter of Chicago’s multifamily developers pursuing permits for projects including 10 or more units are led or managed by people of color, the Chicago Sun Times reported.
Out of the 177 developers included in the analysis, only 17 were headed by Black leaders, six by Latino leaders, and seven by Asian leaders, collectively accounting for just 17 percent of the total despite those three groups accounting for about two-thirds of Chicago’s total population, according to U.S. Census Bureau data.
This diversity gap is troubling to city leadership and seen as an obstacle to increasing affordable housing supply, which is desperately short of the stated need for the city. Chicago is estimated to be short by approximately 120,000 affordable housing units, and the number of individuals experiencing homelessness continues to rise, the newspaper reported.
“We need all of the players to be able to reach their full potential and contribute to the housing supply and the housing stock in our cities,” said Jorge González-Hermoso, a research associate with the Urban Institute.
To address these challenges, the Urban Institute put forward several recommendations to the city. These include offering subsidized low-interest loans or grants to developers of color, conducting more outreach before issuing requests for proposals and easing regulations that can delay or complicate development projects.
These measures could reduce barriers for smaller, minority-led firms, which frequently lack the resources and networks necessary to navigate the complex regulatory landscape.
In an effort to foster greater inclusivity in Chicago’s real estate market, local leaders and organizations have started implementing measures to better support developers of color.
Juan Saldana III and Phillip Beckham III of the Chicago-based firm P3 Markets claim that recent initiatives by the city and state have shown an increased effort to support developers of color.
They observed a growing focus on promoting developers who reflect the community’s diversity.
Saldana and Beckham also mentioned that City Hall has started giving feedback on development projects earlier in the process, which helps guide developers before they seek funding.
In support of these efforts, Mayor Brandon Johnson’s administration has introduced the “Cut the Tape” report, aimed at simplifying the licensing and permitting processes.
“We want the same access and the same quality of life and conditions that other folks have in other parts of the city,” Kenya Merritt, Chicago’s deputy mayor of business and neighborhood development, said.
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