By Casey Murray | OBSERVER Staff Writer

Poppy Grove Development supporters
Poppy Grove Development supporters don their hard hats and hold shovels to celebrate the “groundbreaking ceremony” in Elk Grove last month. The affordable housing development, which will be the city’s largest, is being led by two African American developers. Robert Maryland, OBSERVER

The weather Jan. 10 in Elk Grove was wet and stormy, the worst weather to break ground on a construction project. But developers and city officials still were celebrating.

Notable figures such as Mayor Bobbie Singh-Allen and state Treasurer Fiona Ma donned hard hats and held shovels inside the Elk Grove Veterans Memorial Hall lobby alongside investors, developers and construction company representatives. They held a symbolic groundbreaking, the weather having forced a pivot from the construction site.

The project being celebrated, Poppy Grove Development, will be Elk Grove’s largest site of affordable apartment homes and was led by two Black developers: Reese Jarrett at E. Smith and Company, and Michael Johnson at UrbanCore Development.

The development will create 387 affordable apartments to rent. The construction will be done in three phases, with the first phase of 147 apartment units expected to be done by spring 2024. The second phase is scheduled to be finished about three months later and the last phase three months after that.

Developer Reese Jarrett of E. Smith and Company
Developer Reese Jarrett of E. Smith and Company, tells guests about the Poppy Grove Development, which will be Elk Grove’s largest site of affordable apartment homes. Robert Maryland, OBSERVER

Those at the groundbreaking lauded it as an achievement that would not only help bring relief to families caught up in the housing crisis, but also represent California’s effort to promote developers of all backgrounds.

It’s difficult to say how many real estate developers are Black, but it’s evident that they make up a small portion of the total. Bisnow, a media company that specializes in real estate coverage, found that nationally, at 67 of the largest commercial real estate firms in 2021, about 13% of C-suite roles were held by people of color.

A release from Wells Fargo said developers of color make up less than 5% of the industry.

For the developers of color who do exist, accessing the funds necessary to accomplish large projects, like Poppy Grove, is a huge hurdle.

“Developers of color, particularly Black developers, don’t necessarily have the same access to capital,” Jarrett said. “One of the things that was critical … was the ability to have a set-aside pool that allows access to these precious funds.”

Poppy Grove is being funded partly by such funds, set aside by the state to be used by developers of color. Jarrett said during the groundbreaking that the development wouldn’t have been possible without it.

But the funds have now allowed two Black developers to lead the charge on a significant project that will likely be used by many people of color. The importance of empowering minority developers to create housing for others in their community was a significant theme during the ceremony.

Michael Johnson, right, hugs Reese Jarrett
Michael Johnson, right, hugs Reese Jarrett during the groundbreaking ceremony celebrating the announcement of the Poppy Grove Development in Elk Grove. Johnson and Jarrett are the developers behind the affordable housing development. Robert Maryland, OBSERVER

“We need to create more opportunities for local developers that are developing in their own neighborhoods,” Ma said during her speech. “For too long, developers don’t look like the people that are in the neighborhood. And so, hopefully, this is the start of something bigger and brighter.”

Richard Roberts, chief business development officer at real estate investment firm Red Stone Equity Partners, added to that.

“This deal may be the largest and most significant development under the direction of a minority developer in the country,” he said. “In order for housing to be truly responsive to the needs of all communities, it needs to be developed, owned and maintained by folks who understand those communities.”

Many pointed out the unique opportunity to build such a large affordable housing development in an affluent suburban community like Elk Grove.

“There are ample shopping opportunities, transportation, high-quality schools – those opportunities don’t always come to families in need of affordable housing,” Jarrett said.

However, the opportunity wasn’t unique just because of the benefits it can afford future residents, but also because it managed to dodge some of the pitfalls that often prevent affordable housing projects from being built, especially in wealthy areas.

California Treasurer Fiona Ma
California Treasurer Fiona Ma gives a “thumbs up” during the ceremony. “For too long, developers don’t look like the people that are in the neighborhood. And so, hopefully, this is the start of something bigger and brighter,” she said. Robert Maryland, OBSERVER

In the greater Sacramento region, projects often are stalled or abandoned because of government bureaucracy, regulation, complicated funding structures or because residents don’t want affordable housing built in their neighborhoods. This phenomenon is referred to as “Not in My Backyard,” or NIMBYism.

Singh-Allen said they were able to dodge these pitfalls partly because of strong support from the city council and city staff, and partly through educating the wider community. She said the need to address the housing and homelessness crisis was greater than any push-back.

“We can’t just be talking about affordable housing, but we need to be showing progress in that area. And so this is something important not only to us, but our residents,” she said. “Every now and then we’ll get some NIMBYism, but the best way to combat a lot of this is through education.”

Jarrett said he’s proud of the development and the impact he hopes it will have on families. He’s also proud of the path he’s forging for other Black developers.

“We’ve established that there is a pathway to finding access to these funds that otherwise have been prohibitive,” he said. “We think that that will give some confidence and open up some doors for younger developers that are in the business or getting into the business and we hope to try to mentor some of those folks.”