LANSING, Mich. – More affordable housing will be built across Michigan with the help of a $55 million Community Development Financial Institution (CDFI) New Markets Tax Credit (NMTC) award, the Michigan Economic Development Corporation announced today. Michigan Community Capital, one of three Michigan entities to receive an NMTC award in the 2018 round announced in late May, will use the $55 million program award to invest in attainable housing projects in communities statewide.
“The $55 million awarded to Michigan Community Capital will help fuel Michigan’s economic momentum and create upward mobility for residents and business opportunities for underserved communities in Michigan. We’re pleased to work alongside MCC to bring more of these beneficial, place-based projects to the state,” said Jeff Mason, CEO of the MEDC, the state’s chief marketing and business attraction arm that administers programs and performs due diligence on behalf of the Michigan Strategic Fund. “The decision by CDFI Fund to recognize and support the work of MCC emphasizes the strength of Michigan’s community development programs,” Mason said.
MCC has invested in various mixed-use and mixed income multi-family housing projects. In July 2017, MCC invested in a project led by TC 637 Michigan, LLC. The $7.8MM project in Grand Rapids included replacing low density, functionally obsolete and vacant single-family homes with a medium density, mixed-use, multi-family apartment building consisting of 44 residential units. One hundred percent of the residential units are being leased on a rent-capped basis. Another project, led by Lofts on Lake Street LCC and located in downtown Boyne City, offers the unique opportunity to create market rate housing mixed with workforce housing in a desirable and walkable location.
“MCC will use this very scarce federal resource to invest in some of the most impactful but financially challenging projects across the state over the next 18 months. These projects will include place-based investments to rehabilitate vacant, blighted and contaminated property; investments in businesses that make jobs accessible to households of modest means; and to improve access and affordability to fresh food alternatives,” said Eric Hanna, president and CEO of Michigan Community Capital.
The NMTC Program helps economically distressed communities attract private investment capital. This federal tax credit helps to fill project financing gaps by enabling investors to make larger investments than would otherwise be possible. The CDFI Fund is operated by the U.S. Department of Treasury to complete the vision of an America where all people and communities have access to investment capital and financial services that they need to prosper.
Michigan Community Capital is a supporting entity of the Michigan Strategic Fund that facilitates investment in attainable housing projects. Attainable housing is defined as housing targeted at individuals and families with incomes between 60 and 120 percent of area median income. MEDC and its partners have identified an unmet need for attainable housing in many communities across the state as rental rates have continued to rise, primarily in central business districts and other commercial cores.
MCC has invested $145M from previous NMTC’s rounds in various projects around the state in addition to its current focus on attainable housing projects. MCC has also been supported by the Michigan Strategic Fund with a $22.5M low cost loan which it utilizes to make risk capital investments in transformational mixed-use and attainable housing projects across the state. MCC has closed four attainable housing projects using MSF funds and has another seven projects in the pipeline.
Michigan was selected from a pool of 214 applicants that requested a total of $14.8 billion in tax credit allocation authority from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund. The 73 award recipients are headquartered in 35 different states, Puerto Rico and the District of Columbia.
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