Real Estate Weekly
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NYSAFAH News Views

Expansion of MWBE program is good news for affordable housing

New York’s affordable housing industry has long been one of diversity and inclusion. For this reason, it has served as an open door and pathway into housing development in New York State for Minority- and Women-owned Business Enterprises (MWBEs).

NYSAFAH is proud of this accomplishment, and as the state’s affordable housing trade association, we are always seeking to find new ways to further provide equitable opportunities for MWBEs in our industry.

That is why we are so encouraged by the recent extension and expansion of New York State’s MWBE program — which will make it even easier for MWBEs to play a role in shaping the future of New York’s housing stock.

Governor Cuomo, Senate Majority Leader Stewart-Cousins, Assembly Speaker Heastie and all the legislators who worked tirelessly to get this across the finish line deserve credit for their vision and leadership on this crucial issue. New York, and especially the affordable housing industry, is stronger for their efforts.

The amendments extend the MWBE program by five years, meaning that it will continue through 2024. This encourages groups that may have faced barriers to participation on public or publicly-funded projects, including construction and development, to have a key role in such projects. Moreover, the amendments provide that the actual term for which a certification is valid has been extended from three to five years.

That helps ensure that qualified MWBEs who have undergone the lengthy process for certification — it can often take up to three years to receive accreditation — are given ample time to be rewarded for their efforts.

The certification process is also improved by reducing it to 21 days for review of deficiencies and 45 days for approval by the state.

But perhaps the most significant change is one that alters the net worth limit. Previously, in order to receive MWBE certification, a minority or woman owner upon whom the certification is based could not have a personal net worth of $3.5 million or more. Now, however, that figure has been increased to $15 million.

Increasing the limitation will help ensure that MWBEs are performing to the very best of their ability all of the time and will no longer needlessly punish enterprises when they are successful.

This will further help expand the number of MWBE eligible contractors, which will enable developers and general contractors to satisfy MWBE participation goals and improve competition and quality among MWBEs. The resulting greater diversity within the contractor population will ensure a more equitable prosperity for New Yorkers.

It is important to note that over the past several years there has been forward momentum in creating opportunities for MWBEs in the affordable housing industry: such firms now make up more than 12 percent of NYSAFAH’s total membership.

That figure is even greater for the construction portion of our membership. We expect both figures to rise even further given our industry’s continued focus on diversity and these new changes, which will bolster already existing efforts by NYSAFAH and its membership.

These common-sense changes will help accelerate New York’s progress and ensure that our state-funded projects are as diverse as the communities in which they are built.

That is a significant achievement. For our industry, it means more MWBE architects and engineers to create energy efficient housing, more MWBE developers to bring together the many resources and expertise necessary to build affordable housing, and more MWBE contractors and subcontractors to construct the safe, quality housing that is critical for families to thrive.

This expansion and extension will also empower NYSAFAH to continue to reach our own pre-existing goals, which include expanding its network of MWBE members, working with the Legislature to further improve this certification and recertification process, expanding the number of MWBEs in key major trades, and continuing to increase MWBE utilization rates over the next five years.

While our goals were already in progress, these legislative changes will help accelerate our progress.

We are encouraged by these new developments and look forward to continuing to work with partners across the State to ensure that our industry is as diverse and as reflective as the people we serve.

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