ALBANY, NY – March 19, 2009 – (RealEstateRama) — A new Upstate Equity Fund that will encourage private sector investment in affordable housing projects throughout Upstate New York was announced today by Deborah VanAmerongen, commissioner of the state Division of Housing and Community Renewal (DHCR). The new funding source was developed by DHCR together with the New York State Association for Affordable Housing (NYSAFAH) and other partners in the development community.
Governor David A. Paterson said, “The Upstate Equity Fund is a creative and effective way to address a critical problem in Upstate New York. It will encourage private investment in affordable housing and community revitalization, and will not rely at all on taxpayer money. I applaud DHCR Commissioner VanAmerongen and NYSAFAH Executive Director Bernie Carr for helping to ensure that the economic downturn will not prevent us from providing safe and affordable housing for all New Yorkers.”
The fund will be managed by Great Lakes Capital Fund, which assists in the coordination of affordable housing investment and economic development. Since 1993, Great Lakes Capital Fund (GLCF) has worked with investors, community leaders, developers and organizations to create sustainable communities through investments and support for community planning, economic development, and youth development programs. GLCF has built a portfolio with over $1 billion in equity investments throughout Michigan, Indiana, Wisconsin and Illinois. Managing over 400 properties and serving 25,000 homes – with 0% foreclosure rate – GLCF has a successful history of being a leader in the affordable housing industry.
This fund will encourage banks in Upstate New York to participate in the Low Income Housing Tax Credit Program (LIHTC) and will bring additional units of affordable housing to Upstate communities. In New York, LIHTCs have been directly responsible for the construction or rehabilitation of nearly 50,000 affordable rental units for low and moderate-income families and seniors. Nationwide, about 1 million affordable rental-housing units have been produced using the LIHTC.
DHCR Commissioner Deborah VanAmerongen said: “The economic downturn and collapse of the credit and mortgage markets has eroded the value and effectiveness of the LIHTC. This makes it difficult for affordable housing developers to secure financing, especially in Upstate New York where the real estate market is not as strong as it is downstate. Equity funds are used successfully across the country to create affordable housing because the tax benefits they offer make participation in the housing credit program particularly attractive for investors.”
Executive Director of NYSAFAH Bernie Carr said: “The current economic crisis has created a perfect storm that has made it harder than ever to finance much-needed affordable housing, especially in Upstate communities. We applaud Governor Paterson and Commissioner VanAmerongen for this initiative that brings together the Upstate affordable housing community to develop this fund, and we look forward to working with our partners in that community to get it up and running.”
Chief Operating Officer of the Great Lakes Capital Fund Jim Logue said: “Great Lakes is looking forward to working with the banking industry in Upstate New York. State and local equity funds, like Great Lakes, can play important roles in a bank’s business and Community Reinvestment Act (CRA) compliance strategies. Investing in LIHTCs provide banks with significant tax advantages and make it easier to spread CRA investments efficiently across a large portion of their service areas. By their very nature, funds allow financial institutions to funnel their investment dollars into the areas they serve to create affordable housing and stronger communities.”
For more information, visit Great Lakes Capital Fund at www.capfund.net.
