Through use of unique financing strategies, Santa Rosa, Coachella, Los Angeles and San Jose low-income residents will soon have new options for affordable housing
Silicon Valley Bank (SVB) partnered with non-profit, tax credit syndicator, National Equity Fund (NEF), to commit $110,000,000 for affordable housing in Los Angeles and the Bay Area. Leveraging an innovative and deliberate use of Opportunity Zone incentives, the Silicon Valley Bank proprietary fund is committed to place all $110 million in Low-Income Housing Tax Credit deals before the end of 2021, despite having just funded earlier this month.
“Silicon Valley Bank’s sizable investment will result in the production of affordable housing that is truly consistent with the original stated intent of the Opportunity Zone legislation – to address racial inequity and invest in the communities where it’s needed most,” said Matt Reilein, President and CEO of National Equity Fund.
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“Silicon Valley Bank’s thoughtful approach and willingness to be persistent and work through the complexity of such a high impact fund will result in one of the largest affordable housing investments using Opportunity Zone resources in the industry,” Reilein continued.
As defined by the IRS, Opportunity Zone legislation was created to spur economic growth and job creation in low-income communities while providing tax benefits to investors. States nominate communities for the designation, and the U.S. Department of the Treasury certifies that nomination. Today, thousands of low-income communities in all 50 states, the District of Columbia and five U.S. territories are designated as Qualified Opportunity Zones.
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“In many of California’s most expensive areas, our fund will help create affordable housing where it’s needed most and for who needs it the most – including units reserved specifically for people experiencing homelessness and local farm workers,” said Fiona Hsu, Head of Community Development Finance at Silicon Valley Bank. “NEF was a fantastic partner in helping us work through all the complexity that comes with Opportunity Zone investments. The process wasn’t easy, but it was definitely worth it,” Hsu continued.
“At National Equity Fund, our vision is that all individuals and families across the country have access to stable, safe and affordable homes that provide a foundation for them to reach their full potential. Partners like Silicon Valley Bank are helping to make that vision a reality for more communities in need,” said Reena Bramblett, Senior Vice President of Equity Placement at NEF.
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