by Director of Asset Building Programs Lucy Arellano
(Follow Lucy on LinkedIn)
About 4.4 million businesses in the United States annually contribute more than $700 billion to the economy. Latino-owned businesses, that is. This according to the U.S. Hispanic Chamber of Commerce.
There is no denying the burgeoning economic power of the Latino community across the land.
Closer to home in San Francisco’s Mission District, the neighborhood remains a welcoming hub for Latino immigrants, yet we face challenges to creating the asset of our own business. Such obstacles have led to MEDA pivoting its work. While the foundation to building family generational wealth remains direct services — including free workshops to start or expand a business, coupled with one-on-one coaching/technical assistance — the work now builds toward community ownership. It’s about also strengthening place, not just people: This is a goal necessary in a neighborhood showcasing unprecedented displacement.
MEDA knows that it is not enough to turn the curve on residential displacement; the concurrent displacement of small businesses, nonprofits and arts & cultural organizations must also be stemmed so that low-income communities of color have the culturally relevant services and resources they need to not just survive, but thrive. A thriving small business economy is central to strong communities all over the world.
This has led to MEDA employing four main strategies around business development:
- Microbusiness incubator. It is challenging to find a reasonably priced commercial space in the Mission. That is why MEDA provides technical support, including commercial-lease negotiation, which is vital in a city that has no rent control for such spaces. To jumpstart clients who are budding entrepreneurs, MEDA’s neighborhood center, Plaza Adelante, offers below-market-rate affordable spaces. A recent reimagining of Plaza Adelante’s first floor offers enhanced street visibility for the five small businesses selling their wares. Plus, a trio of 100-square-foot food stalls will be available this spring; such spaces are much needed, as 20 percent of Latino-owned businesses are food services, according to a Biz2Credit 2018 survey.
- New construction. Five years ago, MEDA added to its direct services by becoming an affordable-housing developer — a move necessary in a neighborhood that had not seen a single unit of affordable housing built in a decade, and with market-rate properties with exclusive first-floor commercial ventures springing up all over the Mission. MEDA already has five new constructions in the pipeline. The exciting news is that the ground-floor spaces of these properties will become the new, longtime affordable homes of nine community-based organizations, ranging from early education services to arts organizations to college-mentorship programs. Having such nonprofits on site will strengthen families by meeting them where they live, with wraparound services offered — a comprehensive, holistic, two-generation approach to the building of Latino family wealth.
- Small Sites Program. MEDA is preserving the homes of tenants vulnerable to no-fault Ellis Act evictions by speculators taking the property off the rental market. The City of San Francisco Small Sites Program allows nonprofits, such as MEDA, to purchase four- to 25-unit apartment buildings. The program scaled over time to include properties with commercials spaces, and there are now 23 small businesses saved from displacement by having MEDA as their landlord. Such enterprises run the gamut from mom-and-pop grocery stores to $25-a-pop beauty salons. Additionally, the City provides money to refurbish the common spaces and units as needed, creating quality spaces for both residential and commercial tenants.
- Access to non-displacement capital. Many immigrants cannot get a loan at a traditional lender, creating an obstacle to both the creation of an asset and, down the road, generational wealth. That is why in fall 2015 MEDA launched Fondo Adelante, which since its inception has disbursed $2.44 million via 84 small-business loans. In early 2017, Fondo Adelante became a Community Development Financial Institution (CDFI), and has since begun a capitalization plan to scale its small-business lending and to even forge into real estate lending. Such scaling will enable MEDA to protect more Mission buildings that are home to small businesses, nonprofits and arts & cultural organizations.
The aforementioned strategies are collectively creating community ownership in the Mission. It’s about claiming — and reclaiming — place. And when place is solidified, economic power can translate to political power, the latter a means to ensuring equitable systems can be leveraged to better one’s family, and community.
This is a model that is scalable and replicable … and will generate a movement of Latino wealth and power-building across the United States.