Having a voice in the neighborhood through community meetings is something prevalent in Dorchester and Mattapan as development remains strong in the neighborhoods. Now, a new mode of financing offered for the first time in Dorchester allows neighbors not only to weigh in on the projects, but also to invest in them.
It equates to letting community members put their money where they say it belongs, say those who brought the idea of “regulatory crowdfunding” to Dorchester.
Miriam Gee of Co-Everything said they had long partnered with TLee Development on many projects, but after the federal government passed Title III of the JOBS Act of 2012, they focused on a small element of this law called ‘Regulation Crowd-funding exemption’, which is supervised by the Securities and Exchange Commission (SEC) and allows the public to invest small sums in things like real estate projects.
While these deals aren’t the breakthrough funding required for affordable housing developments, the money they bring in is an additional source of funding that allows the community to participate in more than just meetings, Gee said.
Over the past two years, she and others have met with a small group of long-time residents of Dorchester to discuss the opportunities offered by the law and possibly implement it as part of a housing development for the workforce. -mixed-use building at 1463 Dorchester Ave. in the corner of the fields. Recently, they launched an offering to the public in what Gee said was the first such effort in the neighborhood.
“Most developers are generally not 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 asks a big investor to invest money and stop. Now, about three years after we started meeting, we have come to the point where the project is under construction… The Crowdfund offer is live and we hope that as many Dorchester residents as possible will hear about this opportunity and will consider investing.”
Pursuant to SEC regulations, participants in an offering may not contribute inconsequentially to any news report or public advertisement that discusses the terms of the offering, objectives, timing, or dollar amounts raised. All of this can be learned by visiting the SEC-approved platform, Small Change, and researching the offering. Global concept rules state that offers must be less than or equal to $1 million and a person must be over 18 and can invest up to $2,200 per year or 5% of their net worth, if it is less than $107,000.
Some neighbors have already noticed this, including Marilyn Forman, president of the Erie Ellington Brinsley Partnership Neighborhood Association, who said she has long considered investing in the community for vacant land or subdivisions. When TLee and Co-Everything first started circulating the idea of “regulatory crowdfunding,” she said her association pledged to support it.
Forman said she chose to invest and added that she hopes the concept will take hold after this first offering, as it is a chance to have a real voice in the community and on the development that s produced there. She said she was pleased to hear that investors could be part of a project oversight committee that would be involved in certain parts of the management of this project, such as the type of retail operations chosen.
“I’m excited about it and had the opportunity to be a part of it because it’s part of the story here,” she said. “I have a little piece of the 40 acres and the mule. It’s a piece, but I’m still excited and hope it takes root… It’s never been done here before. I might be skeptical, and people should be because there is risk involved with any investment, but you bite the apple, or you don’t. It’s a risk, but I think it’s a risk worth pursuing by the community.
Forman said she is doing everything she can now to check on the development of the building, to see how things are going. “I’m excited because this is my piece of rock,” Forman said. “We own our house, but I haven’t seen them build it. I can see that and that’s history and I can tell my grandkids that I was part of that project and then pass it on to them. This is where you get into the idea of generational wealth that we all talk about, and it’s something more than an annuity to pass on, because it has a history.
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 put down a down payment on a house but wanted the chance to own something.
“Walking through the set-up process and diving deep into community engagement, it’s clear people are excited about this idea,” she said. “It’s never 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 learned a lot in the last two years leading up to launch and were happy with the process that got them to this point and helped them learn how such a concept could be replicated on other projects.
“We had to jump through a lot of hurdles to get here, but we’re thrilled to be where we are,” she said.
The project located at 1463 Dorchester Avenue, on the former Gallagher Insurance building site, has already been approved as a 5-storey, 29-unit affordable rental housing project with retail space. The construction of the project began at the end of last October.