Bank of America’s Maria Barry On Financing Affordable Housing Post-COVID

“The work is challenging and it is so rewarding,” said Barry, who prior to her 2009 promotion was CDB market executive for the Northeast. “There is nothing like when you get to attend a ribbon-cutting and you get to meet the residents who are moving in and you see the look on their face and just how grateful they are to live there.”

The CDB arm Barry runs supplied $7.85 billion in originations last year to surpass its previous record of $6.7 billion in 2021. It also marked the sixth consecutive year of record growth for the group.

Prior to joining Bank of America’s CDB business in 2004, just as the company was merging with Fleet Bank, Barry was part of a Fleet team that worked  with small to midsize developers. She previously worked in Fleet’s commercial credit department leading Community Reinvestment Act (CRA) initiatives and chairing the bank’s Fair Lending Policy Committee.

Since joining Fleet’s commercial credit department in 1987 after a two-year accounting stint at Ernst & Young, Barry has seen a big rise in the number of women working in key banking roles, especially in the CRE space. She is active in trying to bring more women into executive CRE banking roles through LEAD for Women, an employee network at Bank of America, and Power of 10, a women’s leadership and mentoring program the company sponsors. 

Barry, who is based in Providence, R.I., spoke with Commercial Observer on Feb. 28 about her journey into CRE banking, how the industry has changed for women, and the evolution of financing affordable housing projects since the early 2000s. 

The interview has been edited for length and clarity.

 Commercial Observer: You were a big track and cross-country star at UConn. How did that experience as a high-level Division I athlete influence where you are now in your career?

Maria Barry: I learned so much from being a Division I athlete for four years. I competed for 12 seasons at UConn in track and cross-country. It taught me to dream big as I accomplished so much more than I ever dreamed possible. I was a pretty good 800-meter runner, but by the time I left UConn I left with like several school records ranging in events from the 1,500 meters to many relays and the 3,000 meters, and I also was able to do training that was way beyond anything I thought I could have done when I started. I had incredible teammates who would take me on these long, long runs through the hills of Connecticut, and I was thinking, “I can’t believe we’re going to do this” as it seemed way beyond anything I could ever do. And then we would get through it together, and, of course, that made us stronger and faster.

I also learned a lot from the teamwork and leadership opportunities, as I was captain of both the track and cross-country teams. We worked so hard together and we won multiple New England and Big East championships during the time that I was there. You could really see all of the hard work and teamwork coming together at those championship meets. We were running different races, but we had the same goals.

Are you still an active runner?

I am. I tend to run more races for charity, so I have been running for Dana Farber Cancer Institute for the last couple of years. I’ve done the Falmouth [Mass.] road race and the half-marathon, and I also run 5Ks with my family. Both my children are runners, so it’s a family thing for us.

After graduating from UConn, you worked in accounting and had a two-year stint at Ernst & Young. What drove the shift into banking? 

When I was at Ernst & Young I got great experience. Public accounting is a really great foundation for any business-related job, and I worked really hard and had a lot of responsibility right out of school in that role. I earned my CPA and then I decided I really wanted to broaden my experience, and I felt banking would let me do that. Even though when I joined the bank it was smaller, there were so many opportunities to learn. When I joined it felt like a really great place with so much opportunity to learn, grow, and try new things. I felt I would never get bored here, and that has definitely proven to be the case. 

As we kick off Women’s History Month, how would you describe the makeup of women in commercial real estate banking today versus when you entered the industry in the early 2000s?

Generally there are more women in real estate and more women in leadership roles in banking than when I started. I’m one of four children, and I’m the only girl as I have three younger brothers; so that was a huge benefit for me when I started my career because I was sometimes the only female in the room, and I was very used to that growing up in a house of brothers. That was helpful because there weren’t as many women in the room back then as there are now. There’s a lot of support for bringing women into the industry and developing them, and I’m really encouraged.

What do you think can also be done to increase the number of female executives in commercial real estate banking? Are you involved with any initiatives on this end?

I’m a mentor to several women in the industry both within the bank and external. I’m also part of some leadership groups that are broader than just commercial real estate but they include women in commercial real estate. We have an initiative at the bank called Power of 10, and that is a group that started organically around 10 years ago where small groups of women get together on a monthly basis to share ideas while learning and supporting each other. It is really terrific and a great way for women to connect with each other; also to grow, share best practices, share ideas, and really help each other as they’re navigating their careers. I lead a Power of 10 group, and I’m part of the operating committee for Power of 10 across our firm. We have hundreds of groups all over the world. 

We also have an initiative at the bank called LEAD for Women, and that is also focused on supporting and developing women. I’m the co-executive sponsor for LEAD in Rhode Island, and that’s another way that we’re really helping women in the industry grow and develop. 

Going back to your early days in banking, how did Bank of America’s acquisition of Fleet in 2004 affect your affordable housing role with the community banking team?

I had a background in credit training in leading our CRA initiatives. I also have led our fair lending team and had a lot of exposure to our executive leadership team and our board of directors; and I had recently joined our commercial real estate team right around the time of the acquisition. So, based on my background, it was a natural fit and a really exciting opportunity for me to jump in and run our community development banking Northeast team. I was so grateful for that opportunity, and that led to the role that I’m currently in now.

How has financing for affordable housing projects evolved in your more than two decades in CRE banking? 

The deals are larger, and I think a lot of that has to do with just trying to gain efficiencies in the whole development process. The capital stack for deals now is more complicated. There’s a variety of types of tax credits, there’s more mixed-income housing, and different types of subsidies are woven into the deal. And I would say there’s an additional level of complexity now on the financing side of it. 

When I think back to when I first started in this business, there were areas that you could classify as blighted. Now there are fewer sites available, which can make it really challenging when we’re trying to identify a new affordable housing location for clients. And at times it can also impact the environmental component of the building because some of these properties were the last ones to get picked, so they might be a little bit more challenging in that regard. I also think deals take a little longer now especially with more recent supply chain challenges and challenges in getting enough contractors to be able to work on a project. The need for housing continues to be very high and is growing, but those are some of the changes I think I’ve seen over the last couple years I have been involved with the business.

You’re leading a new investment of up to $150 million in equity to preserve more than 3,000 affordable units nationwide for middle-income households. Why did you decide that now was the time to focus on the “missing middle”?

We had a couple of developments that included middle-income housing, and we started to think about how we could do more of this at scale. That’s how we came up with this idea in partnership with Enterprise Community Partners. Partnering with them was a natural fit for us. We’re hoping that this is just the beginning and that this will be a model for future funds to continue to preserve middle-income housing, maybe even potentially on a larger scale.

What are the biggest barriers now with bringing affordable housing projects to the finish line in America’s largest markets?

Escalating costs can be one of the biggest challenges whether it is materials or construction costs, and we’re still seeing supply chain challenges that are causing some delays as well. The good news, though, is I think we’re starting to see some signs that costs are starting to moderate a little bit, and supply chains are getting better. Our clients have really come up with some new strategies so they can put those in place to get ahead of ordering some of the more challenging items. The good news is we’re starting to see some resolution to a couple of these challenges.

How has the slowdown in the overall commercial real estate market amid rising interest rates affected your affordable housing goals?

We have a really strong pipeline so far in 2023. We remain committed to this business — that the need for housing just continues to grow. This is really a top priority at the federal, state and local levels so our commitment is very strong. We’re working closely with our clients to rework budgets, and our clients have some support from state and local agencies to help them solve some of the challenges that they run into. So we’re seeing a lot of deals moving forward. It’s a really great partnership, I think, with everyone really in the same direction and wanting to get the housing built.

Turning to New York City, which in many ways is the epicenter of commercial real estate. What is New York’s potential for future affordable housing development now that the city’s former 421a tax abatement program has expired? 

The good news there is that New York City and the state have a really long history of creating really innovative programs to address the housing needs and the challenges that residents face  across the region. So, I think, even though 421a has expired, we’re expecting to see alternative strategies that promote safe, sustainable, affordable housing going forward. 

And we’re definitely seeing signals of a willingness to consider similar-type programs. Those discussions are ongoing, but we’re encouraged. New York has always been a leader in this space so we anticipate there’ll be other options to continue the momentum.

Lastly, in your CRE banking career you’ve experienced a lot of challenges between the Global Financial Crisis, the height of the COVID-19 pandemic, and now rising interest rates. From those experiences, would you say affordable housing has proven to be downturn-proof?

The need for housing continues to grow, and people who live in safe, affordable housing will work really hard to pay their rent, and they know that it would be really hard for them to find another place to live. So, once that community is built, we see a lot of strengths there in that people don’t want to leave. They have their friends there and their communities there, and they don’t want to face the prospect of not having a safe, affordable home. That in itself creates strength in the project and the development. 

The underwriting of these developments is strong, so that there’s definitely reserves for unexpected challenges. As we talked about earlier, there’s a tremendous partnership with federal, state and local agencies, which also adds strength to the deals. And all of this combined demonstrates the strength of the business and how responsible the development is. That’s what’s enabled the business to withstand some of these really challenging economic times.

Andrew Coen can be reached at acoen@commercialobserver.com.