Having a voice in the neighborhood via community meetings is something that’s prevalent in Dorchester and Mattapan as development remains strong in the neighborhoods. Now, a new financing method being offered for the first time in Dorchester allows neighbors to not only weigh in on projects, but also to invest in them.
It’s equivalent of letting community members put their money where their mouths are, say those who have brought the “regulation crowd funding” idea to Dorchester.
Miriam Gee, of Co-Everything, said they have long partnered with TLee Development on numerous projects, but after the federal government passed Title III of the 2012 JOBS Act, they focused on a small piece of that law called ‘Regulation Crowd-funding exemption,’ which is overseen by the Securities and Exchange Commission (SEC) and allows the public to invest small amounts in things like real estate projects.
While such offerings are not the make-or-break financing required for affordable housing developments, the money they bring in is an extra source of funding that allows the community to participate in more than just meetings, said Gee.
For the past two years, she and others have met with a small group of long-time Dorchester residents to talk about the opportunities the law provides and potentially implement it as a part of a mixed-use, workforce housing development at 1463 Dorchester Ave. in Fields Corner. Recently, they launched an offering to the public in what Gee said may be the first such effort in the neighborhood.
“Most developers aren’t usually interested in getting $500 or $1,000 here and there from the neighborhood to have a small stake in a project and get a small return,” she said. “It’s easier if TLee Development gets a big investor to put in money and calls it a day. Now, about three years since we started meeting, we’ve got to the point where the project is under construction…The Crowdfund offering is live and we’re hoping to get as many Dorchester residents as possible to hear about this opportunity and consider investing.”
Per SEC regulations, participants in an offering cannot contribute without consequence to a news story or public advertisement that discusses the terms of the offering, the goals, the timeline, or the dollar amounts raised. All of that can be learned by visiting the SEC-approved platform, Small Change, and searching for the offering. The rules for the overall concept state that offerings must be $1 million or less, and an individual must be over 18 and can invest up to $2,200 per year or 5 percent of his or her net worth, if it is less than $107,000.
Some neighbors have already taken notice, one of them being Marilyn Forman, the president of the Erie Ellington Brinsley Partnership Neighborhood Association, who said she has long thought about having community investment for vacant lots or housing developments. When TLee and Co-Everything started circulating the idea of ‘regulation crowd funding,’ she said her association pledged to support it.
Forman said she has chosen to invest and added that she hopes the concept takes hold after this first offering because it’s a chance to have a real voice in the community and on the development that occurs there. She said she was excited to learn that investors could be part of a Project Oversight Committee that has input into some parts of the management of this project, such as what kind of retail operations are chosen.
“I’m excited about it and that I had an opportunity to be a part of it because it’s a part of history here,” she said. “I have a little piece of the 40 acres and the mule. It’s a piece, but I’m excited nonetheless and hoping this will take hold…This hasn’t been done here before. I could be skeptical, and folks should be because there is risk like any investment, but you bite the apple, or you don’t. It’s a risk, but I think it’s one that is worth the community going after.”
Forman said she goes out of her way now to check on the development of the building, to see how things are going. “I’m excited because it’s my piece of the rock,” said Forman. “We own our house, but I didn’t get to see them build it. I can see this and it’s history and I can tell my grandkids I was part of this project and then pass it on to them. That’s where you get into the idea of generational wealth that we all talk about, and this is something more than an annuity to pass down, because it has a story to it.”
Gee said that kind of enthusiasm for owning a piece, even a small piece, of the neighborhood was common in their concept meetings. She said many people had never been able to come up with a down payment for a home but were interested in getting a chance to own something.
“In going through the set-up process and diving deep into community engagement, it’s been clear folks are excited about this idea,” she said. “It hasn’t been attempted here before…It’s really investing in real estate in your neighborhood without having to pay a huge down payment.”
Gee said they have learned a lot over the past two years leading up to the launch and are happy with the process that brought them to this point and helped them to learn how such a concept can be replicated on other projects.
“We’ve had to go through a lot of hurdles to get here, but we’re excited to be where we are,” she said.
The project at 1463 Dorchester Ave., on the old Gallagher Insurance building site, was previously approved as a 5-story, 29-unit affordable housing rental project with retail space. Construction on the project began late last October.