Crowdfunded Development Gets Boost from New Securities Laws

In the U.S., investment in private development has long been limited to wealthy individuals; making the type of crowdfunding that raised $239 million from 3,100 people for a skyscraper in Bogota difficult. New securities laws should change that.

"The practice of crowdfunding real estate is spreading from South America — where Prodigy Network recently raised around $239 million from 3,100 Colombians to build a 66-story skyscraper in Bogotá — to New York, where the developer Urban Muse is hoping to offer a slice of a Brooklyn Bridge Park project to the public," reports Amy Cortese. 

"That seemingly simple idea [crowdfunding development] is actually a radical departure from conventional practice, and requires some financial and regulatory gymnastics," she explains. "Under current law, only wealthy 'accredited' investors (typically those with a net worth of $1 million or more) are allowed to invest in private firms."

"But recent changes to securities laws ushered in by the Jumpstart Our Business Startups Act, signed into law in April 2012, will soon make it much easier for the Millers and other new-breed developers to 'crowdfund' real estate."

Full Story: Washington Projects Invite the Small Local Investor

Comments

Prepare for the AICP Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $199
Planetizen Courses image ad

Planetizen Courses

Advance your career with subscription-based online courses tailored to the urban planning professional.
Starting at $14.95 a month
Book cover of the Guide to Graduate Planning Programs 2012

Thinking about Grad School?

You need the essential resource for prospective planning students
Starting at $24.95

Stay thirsty, urbanists

These sturdy water bottles are eco-friendly and perfect for urbanists on the go.
$19.00