Google, the popular search engine company, is investing more funds into the low-income housing tax credit (LIHTC) market.
U.S. Bancorp Community Development Corp. (USBCDC) has arranged and will manage an $86 million LIHTC fund for the Web firm. The fund will provide equity for the construction of 480 affordable rental units for families and seniors in seven communities in the Midwest and West.
USBCDC originated the tax credit investments with experienced housing developers to build affordable housing developments in Waukegan, Ill.; Apple Valley, Minn.; Des Moines, Iowa; Milwaukee, Wisc.; and Fontana, Palm Springs, and Salinas, Calif. This is USBCDC’s first LIHTC fund with Google.
“In recent years there has been a void in affordable housing investment,” said Brent Callinicos, Google vice president and treasurer, in a statement. “Our investment with USBCDC allows us to further our goal of providing relief to people who otherwise may not have access to quality housing.”
As a new LIHTC investor, Google is bringing fresh capital to the industry at a time when many developers of low-income housing projects have faced significant financial gaps. Its entry into the market helps expand the investor base beyond the traditional investors such as bank and insurance companies.
“We’re proud to align with Google in a shared commitment to affordable housing,” said Larry Baerveldt, director of tax credit syndications for USBCDC. “The expansion of the affordable housing investor base beyond traditional investors is an exciting development for the industry and comes at an important time. This investment by Google, together with the efforts of our strong developer partners, will result in completion of nearly 500 new affordable rental housing units for low income families and senior citizens.”
The move follows a $25 million LIHTC investment that Google made to two California projects through Union Bank earlier this year.