Morgan Stanley and National Equity Fund, Inc. have established a new disaster-area development program intended to accelerate affordable housing construction and create jobs in the regions devastated by the recent storms, floods and tornados. The $100 million “Rebuilding Local Economies Fund” will target FEMA disaster counties in 13 states by investing in projects using Low Income Housing Tax Credits (LIHTC) to finance new construction or rehabilitation.
NEF will manage the fund, which has the potential to replace up to an estimated 1,000 units of affordable housing and create approximately 4,000 new jobs. NEF is pairing the Morgan Stanley fund with $4 million in predevelopment lending to help project sponsors move their developments forward at an even faster pace. Projects must begin construction by March 2012 to qualify.
Audrey Choi, Managing Director and Head of Global Sustainable Finance at Morgan Stanley, says in a statement, “The communities that have been hit by the recent storms, floods and tornados can’t afford to wait for the typical lengthy development process. They need homes now. They need jobs now. By helping projects get off the ground more quickly, we are laying the foundation for economic recovery in these areas.”
Market dynamics have left many areas of the South and Midwest, especially rural communities, with few LIHTC sources for development. And between April and June, 13 states were designated FEMA flood and windstorm disaster areas: Alabama, Arkansas, Georgia, Iowa, Kentucky, Minnesota, Mississippi, Missouri, North Carolina, North Dakota, Ohio, South Dakota and Tennessee.