FFTC Makes $5 Million Program-Related Investment to Kickstart Housing Opportunity Investment Fund
Affordable housing is a critical component for fostering upward mobility and creating vibrant communities. Yet, Mecklenburg County currently faces a deficit of 22,000 affordable housing units, and nearly half of its residents are cost-burdened – meaning housing costs exceed 30 percent of income.
To address the affordable housing shortage, Foundation For The Carolinas kickstarted a new privately financed Housing Opportunity Investment Fund with a $5 million program-related investment, the largest of its kind in FFTC’s history.
The announcement follows the City of Charlotte’s placement of a $50 million bond referendum on the November ballot to dramatically boost its publicly financed Housing Trust Fund. The goal is to match the City's public investment with $50 million from the private sector.
The Housing Opportunity Investment Fund will aim to lessen the growing affordability gap to develop housing that serves residents in a range of incomes – including moderate, low and extremely low-earning households. Local Initiatives Support Corporation will hold and manage the Housing Opportunity Investment Fund, which will work in tandem with the City’s trust fund.
The $5 million commitment was made as a program-related investment, or PRI, versus a traditional grant. A PRI is a mission-related investment in the community in lieu of conventional investment vehicles, and that garners a low-yield return. FFTC’s investment is contingent upon the passage of the bond referendum.
“By making a program-related investment instead of a traditional grant, we – and others in the philanthropic community – can participate at a more significant financial level,” said Todd Mansfield, FFTC governing board chair.
After the Foundation's announcement of its initial investment and its call to action to the private sector, several companies responded, including:
- Crescent Communities announced a $2 million donation of land in its latest development – The River District in west Charlotte – for the construction of affordable housing.
- Wells Fargo pledged $20 million in support of increasing affordable housing in Charlotte, including a $5 million donation to the Housing Opportunity Investment Fund.
FFTC is developing additional paths for others to participate in the effort, such as a mechanism for fundholders to invest in the Housing Opportunity Investment Fund, and potentially using its subsidiary – Community Real Property Holdings, Inc. – to create a land bank to boost affordable housing.
Increasing access to affordable housing was a key recommendation in last year’s Leading on Opportunity report. The hope is by leading the way, other members of the private sector will follow.
“We’ve seen tremendous progress since the report was released last year,” said Michael Marsicano, president and CEO of FFTC. “In addition to the City’s proposed bond referendum, the County has approved a budget increase to expand access to preschool. Now it’s time for the private and foundation sectors to step up. We are certain others will join us.”
Learn more about Leading On Opportunity and read the report.