LISC/NEF and Enterprise/ESIC Launch Community Recovery Fund to Redevelop Devastated Gulf Region
9 Sep 2005 - New York, NY
Effort Includes Grants, Loans and Tax Credit Investments
In the wake of Katrina's massive devastation, Local Initiatives Support Corporation (LISC) and Enterprise are joining forces to help finance the redevelopment of impacted Gulf Region communities and provide affordable housing to returning hurricane victims.
Along with their respective syndication arms - Enterprise Social Investment Corporation (ESIC) and National Equity Fund, Inc. (NEF) - Enterprise and LISC are raising grant, loan and equity dollars to build new homes, spur economic development, and support the restoration of the critical community infrastructure that is desperately needed throughout parts of Louisiana, Mississippi and Alabama. The joint effort is called the Community Recovery Fund, and it will operate through local community-based development organizations focused on revitalization of their neighborhoods.
"As we and others focus on the immediate concerns of disaster relief, we are also marshalling our resources to make sure displaced residents have homes and businesses to come back to once they're ready to look to the future," explained Michael Rubinger, LISC president and CEO, and Bart Harvey, Enterprise chairman and CEO.
Enterprise/ESIC and LISC/NEF have provided a combined $12 billion over the years in support to distressed cities and towns, underpinning the development of affordable housing, retail and industrial uses, health and education facilities, and the like. Both have a significant national reach with regard to the community organizations they support, range of funders and the depth of their technical expertise, and both have been active in the affected region for many years. Based on that track record, The Rockefeller Foundation-a long-time funder of both groups-has committed the first $1 million to the combined effort.
"For the better part of three decades, LISC/NEF and Enterprise/ESIC have been focused on helping low-income residents improve their quality of life," Messrs. Harvey and Rubinger noted. "Given the magnitude of this disaster, it just makes sense that we combine our efforts so we have the scale we need to have a lasting impact. We invite other organizations to partner with us on the Community Recovery Fund."
This joint initiative includes a low-income housing tax credit (LIHTC) investment program that will be managed jointly by NEF and ESIC. This program is based on a model they established in New York City, where for more than 15 years Enterprise/ESIC and LISC/NEF have collaborated with the city to jointly manage housing tax credit investments. Through that partnership-known as the New York Equity Fund-the organizations have invested more than $1 billion in the city's affordable housing efforts, supporting the development of 20,000 rental homes for low-income residents.
"As equity providers, we're not really structured to provide direct relief to the individuals most affected by this catastrophe," said Jeffrey Donahue, president and CEO of ESIC, and Joseph S. Hagan, president and CEO of NEF. "So we decided to get together and do what we do best: provide fuel for new affordable housing. We think we can significantly influence both the quality of housing that is built and how quickly it comes on line. Both are critical to rebuilding these communities."
Important to that effort will be the emerging federal response to Katrina. The organizations are encouraging the federal government to provide the affected states with an additional allocation of LIHTCs to help with the rebuilding effort. Already, the Internal Revenue Service has lifted income restrictions on LIHTC housing developments for people displaced by Katrina, which should help victims more easily obtain housing within their means in the weeks to come.
"An additional allocation of tax credits will help direct millions of private-sector dollars to these areas. We really think that needs to happen," Messrs. Hagan and Donahue agreed. "It will dramatically accelerate new housing development, which will be the most important task facing local officials once the rescue and recovery efforts are complete and the clean up begins."
About Enterprise Foundation
The Enterprise Foundation helps America's low-income families with their struggle out of poverty by providing decent homes, access to steady employment, quality child care and safer streets. Working with a network of 2,500 community organizations nationwide and through its 17 offices, Enterprise has leveraged close to $6 billion in investments and donations to help build almost 175,000 affordable homes.About LISC
LISC combines corporate, government and philanthropic resources to help nonprofit community development corporations revitalize underserved neighborhoods. Since 1980, LISC has raised more than $6 billion to build or rehab nearly 160,000 affordable homes and develop 25 million square feet of retail, community and educational space nationwide.About ESIC
The Enterprise Social Investment Corporation (ESIC) is a national leader in affordable housing and community revitalization efforts. Founded in 1984 as a socially motivated for-profit subsidiary of Enterprise, ESIC works with a variety of investment and development partners to finance, develop, acquire and manage a portfolio of affordable housing and other community development initiatives. These activities result in the annual investment in or direct development of over $1 billion of high-quality affordable housing and related community enrichment facilities in underserved neighborhoods across the country.About NEF
National Equity Fund, Inc. (NEF) ensures that the private capital attracted to the low-income housing tax credit (LIHTC) makes its way to the communities and developers that need it most. As a national nonprofit syndicator of LIHTCs, NEF is the bridge between institutional investors and affordable housing developers, helping match projects with capital and providing the kind of technical assistance, grants and loans that are needed to complement its project investment activity. Since 1987, NEF has invested $4.4 billion in 68,000 affordable rental apartments nationwide, most of which have been developed by nonprofit community groups.Article Type: Press Release