SLDC Board of Directors Takes Action to Deploy New Markets Tax Credits into its Housing Access and Neighborhood Stabilization Revolving Loan Fund
Yesterday, the SLDC Board of Directors authorized Habitat for Humanity St. Louis and Tabernacle Community Development Corporation (TCDC) to participate in constructing affordable for-sale housing through the Housing Access and Neighborhood Stabilization Revolving Loan Fund. The Fund is intended to expand access to stable, quality housing through the production of affordable for-sale homes in New Markets Tax Credit (NMTC) eligible/HUD-defined Qualified Census Tracts (QCTs), utilizing a combination of American Rescue Plan Act (ARPA) funds and NMTC equity from U.S. Bank (USB). The program is targeted for 80% AMI households and below.
“Divested neighborhoods struggle to attract developers to increase the supply of quality housing units and legacy wealth-building opportunities. Without direct relief to provide access to stable housing through homeownership and job creation, the home values and population in the census tracts hit hardest by the COVID-19 pandemic will continue to decline,” said Neal Richardson, SLDC’s President & CEO. “Creating this fund will address the persistent unmet demand for quality housing available for purchase throughout St. Louis and offer wealth-building pathways to homeownership in at-risk neighborhoods as envisioned in the Economic Justice Action Plan.”
Following a solicitation process to select a Lead Developer for the Fund, procure a Construction Manager and solicit developer applications to identify project sites, the two non-profit developers — Habitat for Humanity and Tabernacle CDC — were identified to fulfill the targets of the Fund. Both organizations have extensive community development experience in the targeted QCTs. Habitat for Humanity has a proven track record developing affordable for-sale housing utilizing NMTCs, and TCDC’s successful HUB community resource center has anchored additional residential development in the surrounding neighborhoods. Both have multiple project-ready sites and will be able to efficiently utilize this funding to begin the production of new housing.
Pastor Andre Alexander shared Tabernacle CDC’s plans for approximately 22 homes on the 3600 and 3700 blocks of Hebert Street, which will bring continued stabilization to the neighborhood. It will also bring much-needed new housing and allow the organization to use minority contractors and skilled employees with ties to the neighborhood. This is phase 1 of a 10- to 15-year development plan that looks at transformation where people live, work and play in their corner of the JeffVanderLou neighborhood.
Habitat for Humanity plans approximately 20 homes split between North and South St. Louis, as explained by Kimberly McKinney. Habitat will partner with Art Place Initiative in Gravois-Jefferson and is exploring new partnerships for homes in Old North St. Louis. Both organizations expect their homes will be sold for approximately $130,000 to $180,000.
Additionally, the Board took further action to establish the Fund, authorizing SLDC to allocate up to $12 million in NMTC to the $14 million revolving loan fund financed with NMTC equity and $10 million of American Rescue Plan (ARPA) funds. To increase the total Fund to $14 million, USB committed to sub-allocate an additional $2 million of its tax credit allocation. USB has also pledged approximately $4 million in equity for the transaction, which reduces the lending risk, allowing builders to develop at scale while lowering the cost of homes for buyers.