Morgan Stanley and National Equity Fund, Inc. (NEF), have established a disaster-area development program that seeks to accelerate affordable housing construction and create jobs in regions devastated by recent storms, floods, and tornados.
Morgan Stanley is creating a $100 million Rebuilding Local Economies Fund that will target Federal Emergency Management Agency (FEMA) disaster counties in 13 states, including Missouri, North Carolina, and Alabama. The fund will invest in low-income housing tax credit (LIHTC) properties.
NEF, a leading tax credit syndicator, will manage the fund, which has the potential to replace up to 1,000 units of affordable housing and create about 4,000 new jobs. It is pairing the Morgan Stanley fund with $4 million in predevelopment lending to help developers move their developments forward at an even faster pace. Projects must begin construction by March 2012 to qualify.
“The communities that have been hit by the recent storms, floods, and tornados can’t afford to wait for the typical lengthy development process,” said Audrey Choi, managing director and head of global sustainable finance at Morgan Stanley, in a statement. “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.”
Thirteen states had counties designated FEMA flood and windstorm disaster areas between April and June. The fund will target these counties in Alabama, Arkansas, Georgia, Iowa, Kentucky, Minnesota, Mississippi, Missouri, North Carolina, North Dakota, Ohio, South Dakota, and Tennessee.
The Rebuilding Local Economies Fund will focus on expediting the construction of green affordable housing.
Market dynamics have left many areas of the South and Midwest, especially rural communities, with few LIHTC sources for development, said Joe Hagan, president and CEO of NEF.
“Morgan Stanley has long made it a priority to support investments in areas not well served by the rest of the market,” he said. “They are continuing that with this program. These communities have a significant need for housing investment capital, and the tax credit is a terrific tool to help fuel recovery if we can put it to work quickly.”