Morgan Stanley (NYSE: MS) and National Equity Fund Inc. (NEF) are expanding their joint Rebuilding Local Economies Fund with $75 million to support replacement housing in communities devastated by Hurricane Sandy.
The fund, launched in 2011, finances affordable housing for low-income residents in FEMA-declared disaster areas. It is designed to help jump-start economic activity with new jobs and development activity, in addition to ensuring that families have safe, quality, affordable housing.
The now $200 million fund has already committed $108 million to development projects across parts of the Midwest and South that were battered by tornadoes and floods over the last 18 months. The new $75 million commitment will focus exclusively on parts of New York, New Jersey, Connecticut, Rhode Island and other areas impacted by Sandy’s destruction. When all $200 million is invested, the fund will have supported the development of approximately 1,500 units of affordable housing and the creation of thousands of construction and permanent jobs.
“Morgan Stanley is committed to supporting local communities when disaster demands an immediate response,” said Audrey Choi, Managing Director and Head of Global Sustainable Finance at Morgan Stanley. “The Rebuilding Local Economies Fund aims to kick-start and accelerate affordable housing opportunities and job creation in these communities.”
“So many people have lost so much to this catastrophe,” noted Joe Hagan, NEF president and CEO. “The scale is overwhelming. We want to focus resources on the places that need them most, and work with new and existing partners in these communities to help developments move forward.”
The fund is managed by NEF and connects Morgan Stanley capital to projects that have been allocated federal Low Income Housing Tax Credits (LIHTC). NEF has also set up a $4 million pool of predevelopment capital to help developers expedite the early work needed to launch these projects.
“This much-needed capital is a critical part of our work to help victims of Sandy on their long road to recovery,” noted Michael Rubinger, president and CEO of the Local Initiatives Support Corporation (LISC). LISC – a national nonprofit and NEF's parent – recently announced an Emergency Relief Fund to help low-income residents and communities hit by the unprecedented storm. “With the support of partners like Morgan Stanley, LISC and NEF have been on the ground in these neighborhoods for decades,” Rubinger said. “Now, we are working hard to assemble our national resources to help meet the staggering local need.”
LIHTC developments must be affordable to families, seniors and special needs residents earning 60 percent or less of their area’s median income. Developers earn the housing credits through a state-based competitive process and then sell them to institutional investors to fund their projects. The Low Income Housing Tax Credits direct some $9 billion in development capital to low-income communities each year.
“Affordable housing development can help underpin economic recovery in communities reeling from disaster,” said Mike Mantle, Senior Advisor in Morgan Stanley Global Sustainable Finance. “Through collaborations like this, we can foster long-term, sustainable economic growth in these communities and rally resources at a time of great hardship.”
For more information about project investments through the Rebuilding Local Economies Fund or to make an inquiry about a particular need, please contact NEF’s Tony Lyons, 212-455-9323 or tlyons@nefinc.org.
About Morgan Stanley
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,200 offices in 43 countries. Since 2006, Morgan Stanley has executed more than $5 billion in investments to strengthen underserved communities. For further information about Morgan Stanley, please visit www.morganstanley.com.
About NEF
Celebrating its 25th anniversary in 2012, National Equity Fund, Inc. (NEF) is a nonprofit Chicago-based affiliate of the Local Initiatives Support Corporation (LISC) and the nation’s largest syndicator of Low Income Housing Tax Credits (LIHTC). Since its inception, NEF has played an integral role in creating affordable housing options, revitalizing communities and strengthening local economies. It has invested $9.5 billion in more than 2,100 LIHTC developments, creating 127,000 affordable homes for low-income families and individuals. For more information, visit www.nefinc.org.
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