Affordable Housing Finance recently caught up with Alice Carr, head of Community Development Banking at Chase, on the bank’s 2018 highlights and its forecast for the coming year. In 2018, Chase was a leading lender for the industry, providing over $1.5 billion in permanent and construction loans for properties with formal income restrictions.
AHF: What were some of Chase Community Development Banking’s affordable lending highlights last year?
Carr: In 2018, we saw a steady pace of production in the affordable housing space, and we continued to participate in the broader conversation around naturally occurring affordable and workforce housing. We’re encouraged by the commitment from the state of California to actively participate in discussion with municipalities across the United States about efforts to create expansion programs for affordable units nationwide.
The firm also launched Advancing Cities, a $500 million initiative to bolster the long-term vitality of the world’s cities and the communities within them that have not benefited from economic growth. Up to $250 million of this commitment will be low-cost, long-term capital, which will enable us to combine the firm’s philanthropic programs and business expertise.
We’re excited to support these efforts through our community development banking business. Our team continues to be committed to supporting industry investors by providing loans, investments, and affordable housing and neighborhood revitalization services to help develop vibrant and diverse communities thrive.
AHF: How will this year will compare to 2018? What is your forecast for the debt market?
Carr: Even with the multifamily housing industry carefully watching market signals, we expect steady growth in affordable housing lending given the increasing demand for affordable units. Now that the industry has normalized around tax code changes, we anticipate a steady production year, with an eye toward construction costs and interest rates.
AHF: Does Chase have any new priorities or products that you’ll be focusing on this year?
Carr: We anticipate a lot of community development activity this year, and we’re focused on continuing to provide the right solutions and expertise around workforce and affordable housing. We’re also excited about our involvement in the Advancing Cities initiative, providing flexible capital options to industry players that are on the ground grappling with affordable housing challenges in local communities.
It will take more products and solutions to solve the national affordable housing crisis. There is a recognized need for affordable housing to be built on a broader scale, and we’re providing our business acumen, local community knowledge, and industry solutions and expertise nationwide to help find sustainable solutions.
AHF: Where will the biggest opportunities on the debt side for affordable housing borrowers be?
Carr: We expect to continue to see large deals completed, especially as states show commitment to including units serving tenants with higher area median incomes. We are dedicated to meeting market needs with solutions that work for workforce and naturally occurring affordable housing.
AHF: And what do you see as the biggest threats for the industry on the debt side?
Carr: As we head into 2019, there’s some uncertainty about where we are in the real estate cycle, as well as concerns around construction costs and increasing interest rates. We work in a resilient industry, and we expect to see growth this year, along with increasing support toward affordable housing and neighborhood revitalization opportunities.
