State-backed program receives $55M in federal funds to invest in housing

BY Sunday, July 14, 2019 12:05pm

Backed by an infusion of $55 million in federal funds, Lansing-based Michigan Community Capital plans to continue investing in mixed-income housing projects across the state. 

The funding comes via the latest $3.5 billion round of New Markets Tax Credit awards from the U.S. Department of Treasury’s Community Development Financial Institutions (CDFI) Fund. The funds are aimed at encouraging investment and economic growth in low-income urban and rural communities nationwide. 

The nonprofit Michigan Community Capital, which is supported by the Michigan Strategic Fund and various private-sector entities, including financial institutions and philanthropy, lends to and invests in a range of housing projects across the state. 

“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,” Eric Hanna, president and CEO of Michigan Community Capital, said in a statement. 

The group’s investments will include rehabilitating vacant, blighted and contaminated property; helping businesses to make jobs accessible to households; and improving access to and the affordability of fresh food, Hanna said.

MCC has invested in mixed-use and mixed-income multifamily housing in West Michigan. Current projects include the five-story mixed-use facility that 3Mission Design & Development LLC is building at 449 Bridge Street NW in Grand Rapids at the site of the long-vacant former Red Lion restaurant. 

As well, MCC invested in the $7.8 million project at 637 Michigan Street NE in Grand Rapids developed by an affiliate of Grand Rapids-based Third Coast Development LLC. The project involved replacing low-density, functionally obsolete and vacant single-family homes with a medium-density, mixed-use multifamily apartment building with 44 units, all of which are being leased on a rent-capped basis.

Also in Grand Rapids, MCC previously supported Grand Valley State University’s Bicycle Factory and Seidman Center, Heart of the City Health Center, 35 Oakes, and 920 Cherry Street. 

Most of MCC’s investments go to “attainable housing,” which is defined as targeted at people and families with incomes between 60 percent and 120 perent of the area median income. The New Markets Tax Credit program helps economically distressed communities attract private investment capital.

MCC received prior New Markets Tax Credit funding in 2010, 2009 and 2005 totalling $145 million, according to the Department of Treasury data.

In the most recent round, Lansing-based Cinnaire Corp., which works nationally, received $195 million in New Markets Tax Credit Funding, while Invest Detroit received $15 million. 

“The New Markets Tax Credit is a powerful economic development tool that attracts private capital into hard-to-finance businesses in distressed communities nationwide,” CDFI Fund Director Jodie Harris said in a statement. 

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