Three prominent financial-service companies are teaming to invest more than $70 million in affordable housing in Charlotte, N.C., and the surrounding area.
The investment by Ally Financial, Bank of America Merrill Lynch, and Barings marks the largest private-sector commitment to affordable housing in the region,, which has seen strong growth over the past two decades, driving up housing costs, and creating a shortage of homes affordable to low- and moderate- income families.
Bank of America and Barings are based in the city. Ally is headquartered in Detroit but has a corporate center and a large presence in Charlotte.
"I hope today's announcement encourages more companies to come forward to support our city," said Charlotte mayor Vi Lyles. "It's going to take all of us to solve these big issues facing so many of our citizens."
The initiative increases the impact of each company's individual investments and includes:
- $50 million in below-market loans to finance affordable housing developments, which is equivalent to a $1 million grant per year for the next 15 years;
- $11 million invested in the newly proposed Housing Opportunity Investment Fund, which will assess affordable housing projects and find financing to execute viable projects;
- $2.5 million allocated to economic mobility programming and grants over the next five years; and
- $7.25 million worth of land donated to make affordable housing possible, particularly in Uptown Charlotte.
"In Charlotte, the general public, the business community, and elected officials work together to take action and meet these needs," said Bank of America CEO Brian Moynihan. "This is a great model for other cities addressing similar issues."
The below-market loans, which represent the largest portion of the investment, will be priced as much as 2% below market rate, potentially saving affordable housing developers $1 million every year over the next 15 years. This will help families access more affordable housing options with more inventory available, according to officials.
"While this investment is significant, there is more work to be done to make affordable housing achievable and sustainable in Charlotte," said Barings chairman and CEO Tom Finke, who made the investment in partnership with Barings' parent company, Massachusetts Mutual Life Insurance Co. (MassMutual). "We hope this partnership inspires other organizations to contribute to increasing economic mobility in our community."
The newly proposed Housing Opportunity Investment Fund will be managed by the city's Local Initiatives Support Corp., which is launching a local office.
"As the Charlotte economy has grown, low- to moderate-income families have to pay a disproportionate percentage of their take-home pay for decent housing in safe and stable neighborhoods," said Ally CEO Jeff Brown. "We are excited to be working hand in hand with Bank of America and Barings to make this contribution to affordable housing, and we're encouraging other companies to join us in this important initiative."