New Markets Tax Credit Coalition Hosts April 2019 Fly-in, Congressional Briefing

Yesterday, on April 9th, the nation’s leading community development entities met with nearly one hundred Members of Congress and their staffs to discuss the advancement of bills introduced in the House and Senate in February  that  make permanent and expand the New Markets Tax Credit. The fly-in, hosted by the New Markets Tax Credit Coalition, included a briefing with keynotes from the House bill’s lead sponsors, Reps. Terri Sewell (D-AL) and Tom Reed (R-NY), and remarks by Reps. Jason Smith (R-MO) and TJ Cox (D-CA). The special gathering of legislators, congressional staff and NMTC practitioners from across the country was held in the House Ways and Means Committee Room. “There are issues in Washington that are truly bipartisan, especially around efforts to spur revitalization in economically distress areas, so I’m a proponent of the New Markets Tax Credit,” said Rep. Sewell. “In my district, the NMTC has really made a big impact. I’m confident that when my colleagues realize all the benefits of the program, we will pass this legislation overwhelmingly.” ”We’ve seen the New Markets Tax Credit deployed across the country,” said Rep. Reed. “The NMTC is a policy that has broad bipartisan support. It is a tool in the toolbox that is changing communities. It’s all happening with the NMTC.”
NMTC practitioners presenting on their work. (L to R: Joe Summers, Urban Action Community Development; Pat Sluder, MassDevelopment; Bill Dana, Central Bank of Kansas City; Aisha Benson, TruFund Financial Services; and Kermit Billups, NMTC Coalition President)
Additional speakers at the briefing included Kermit Billups, Chair of the NMTC Coalition Board and Executive Vice President of Greenline Ventures, emcee and panelists Aisha Benson, Executive Vice President, TruFund Financial Services; Bill Dana, President and CEO, Central Bank Of Kansas City; Pat Sluder, Vice President, MassDevelopment; and Joe Summers, Vice President, Urban Action Community Development. Following the panel of NMTC practitioners, Rep. Jason Smith (R-M) also addressed the briefing attendees.
(L to R) Reps. Sewell (D-Ala.), Smith (R-Mo.) and Reed (R-N.Y.) talk about their support for the New Markets Tax Credit during a recent industry coalition visit to Capitol Hill.
“I’m a huge supporter of the New Markets Tax Credit,” said Rep. Smith. “A lot of rural areas have persistent poverty, and the NMTC is a great program for us in helping them.” Established in 2000, in the Community Renewal Tax Relief Act (P.L.106-554), the New Markets Tax Credit is a bipartisan effort to drive economic growth in low-income urban neighborhoods and rural communities. Congress extended the NMTC for five years as part of The PATH Act. (P.L. 114- 113) in December 2015. As Congress and the Administration continue discussions around tax extender provisions post tax reform, organizations, businesses and communities that have seen the positive impact of the NMTC have increasingly urged Congress to make the credit a permanent part of the tax code. “Last Congress, over 125 members of Congress from both parties cosponsored NMTC extension legislation. The strong support of the New Markets Tax Credit was a direct result of the tangible impact it makes in distressed rural and urban communities that have been left outside the economic mainstream,” said Bob Rapoza, spokesperson for the NMTC Coalition. “The NMTC has generated over 1,000,000 jobs and delivered $90 billion in total capital investment through public-private partnerships. However, without legislative action, this effective tool for community revitalization will expire December 31st.” A majority of the members of the House Ways and Means Committee cosponsored NMTC extension legislation last session, and the new bill starts off with support from 20 members of the powerful tax-writing committee. U.S. Department of the Treasury data indicates that more than 72 percent of NMTC activity is in severely distressed communities with unemployment rates at least 1.5 times the national average or with poverty rates of at least 30 percent. In FY 2018 alone, the CDFI Fund, which administers the program at the Treasury, reported that the NMTC delivered nearly $4 billion in financing to 680 businesses, community facilities and economic revitalization projects. Communities put the capital to work, creating nearly 9,500 permanent jobs and almost 30,000 construction jobs in areas with high unemployment and poverty rates. For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s NMTC at Work in Communities report or check out its Project Profile Map.

Lawmakers, Community Development Leaders Gather in Washington, D.C. to Discuss Tax Policy Trends and Plans for 2019

Coalition gathers NMTC stakeholders for a policy conference, releases new state statistics

WASHINGTON, D.C. (December 18, 2018) — The New Markets Tax Credit (NMTC) Coalition held its Annual Conference on December 12 and 13 in Washington, D.C. The event featured members of Congress as keynote speakers, and panels on timely community development matters. Attendees were also provided with insights from the Treasury Department and the release of updated state statistics on NMTC efficacy.

NMTC Coalition President Kermit Billups opened the conference, welcoming speakers and guests. The experienced NMTC practitioner and Greenline Ventures EVP highlighted recent successes and looked to the future of the NMTC Coalition. Keynote speakers at the conference included U.S. Reps. Terri Sewell (D-Ala.) and Tom Reed (R-N.Y.). Both indicated their desire to work with House colleagues to see the NMTC not only extended, but made permanent and expanded.

“We have seen firsthand the impact the New Markets Tax Credit program has had here in New York and want to ensure it has a fair shot at continuing to boost jobs in our community,” Congressman Reed said. “While the economy continues to grow, small businesses – the lifeblood of our economy – still struggle to secure the capital needed to spur revitalization.”

“The New Markets Tax Credit helps create a better environment for businesses and transformative projects to thrive – boosting wages, services and economic development where it’s needed most,” Reed concluded.

A legislative outlook panel was led by moderator Bob Rapoza, NMTC Coalition spokesman, and included key congressional staff. Many attendees headed to congressional visits that afternoon, followed by a reception in the Kennedy Caucus Room where they were addressed by Senators Ben Cardin (D-Md.) and Rob Portman (R-Ohio), Senate NMTC Extension Act cosponsors and Senate Finance Committee members, who discussed NMTC impact and the future of tax policy.

Sen. Cardin said, “In Maryland, the New Markets Tax Credit has been deployed on a diverse range of infrastructure and community development efforts, from affordable housing, to health clinics, to community centers. Since 2003, the credit has resulted in billions of dollars in investment across the state and created over 34,000 jobs. It is time to make this incredibly valuable program permanent.”

Senator Rob Portman added, “Pro-growth federal policies are helping grow our economy and strengthen our communities. More than ever, we need to continue support for programs like the New Markets Tax Credit that spur investment in areas that truly need it and help create new industry, infrastructure, and jobs for cities and towns across the U.S. that have felt left behind. I’ve seen the results that these tax credits can have on our communities. Last year in Ohio, $280 million in New Markets Tax Credit financing generated a total of $462 million in public-private project investment for 29 projects in the state. Our local communities depend on these tax incentives for projects that transform our communities, create jobs, and make a real difference in peoples’ lives, and I’ll continue fighting to make them permanent.”

The final keynote of the conference came from Community Development Financial Institutions (CDFI) Fund Director Annie Donovan. At the close of her remarks, Donovan announced her departure from the CDFI Fund. During her five years as director, Donovan oversaw tremendous growth in the agency’s funding and programming and the largest ever CDFI and NMTC program award rounds. Integrating more data into policy-making was a top priority for Donovan.

Panels during the conference also included NMTC board and leadership, economic development experts and Treasury Department professionals. Those discussions focused on Opportunity Zones, NMTC investor prospects, NMTC financing disaster relief, and the latest insights from the Treasury Department.

“Since its inception, the New Markets Tax Credit has financed more than 5,000 projects and created over one million jobs,” said Bob Rapoza. “The conference provides practitioners with opportunities to discuss ways to build upon its success, helping low-income rural and urban communities access the capital necessary to grow local economies, expand business opportunities, update worn infrastructure, and make needed services like healthcare, education and childcare available to individuals and families living in distressed areas.”

Let’s Ensure #InternetDay Keeps Getting People Connected

Post authored by NMTC Coalition Board Member Phil Glynn of Travois. Social media has given rise to many so-called “hashtag holidays” that spring up on Twitter, Facebook and Instagram each morning as we surf on our smartphones for news and updates from our friends. #NationalPizzaDay, #NationalSiblingsDay, #NoDirtyDishesDay. Many are entertaining, some are thought-provoking. Few, however, are critical. October 29th marks #InternetDay, and is among the exceptions. In just a few short decades, the internet has changed the way our communities interact and live, becoming an essential tool for education, healthcare and commerce. Many tech companies will take this opportunity to discuss new and emerging products and services they plan to bring to the market, but it’s also a day to consider those without access to broadband. And while most of our resources are being spent on the next generation of faster, more reliable digital access, many communities who still are waiting for the revolution to come to them. The Federal Communications Commission (FCC) 2018 report on Broadband found that approximately 14 million rural Americans and 1.2 million Americans living on Tribal lands still lack mobile LTE broadband at speeds of 10 Mbps/3 Mbps. One of the reasons for this divide is the expense of delivering such technology to rural and Tribal areas. Broadband supports more than just surfing the net. It is an important component of our healthcare delivery system. In remote areas with shortages in doctors and particularly specialists, broadband allows physicians and patients to consult with specialists through telemedicine. High-speed networks also help health professionals remotely monitor the vital signs of elderly or disabled patients living at home. Travois invests in housing, health care, education and infrastructure projects to create economic opportunity in Indian Country. In the tribal communities of Alaska, Travois worked to fill financing gaps in the development of phases of the Terrestrial for Every Region of Rural Alaska (TERRA) project. TERRA is a hybrid terrestrial fiber-optic and microwave network that removes the limitations of satellite and provides symmetrical broadband service to Alaska’s remote and rural regions. The TERRA network delivers critical bandwidth to numerous public, nonprofit and private entities such as regional health corporations, school districts, native organizations and residents. The build-out of the TERRA network is no small feat. Alaska is home to some of the most challenging geography in North America and regularly experiences unpredictable and unforgiving weather which can hamper construction. A majority of the communities that most need fast, reliable Internet are separated by vast distances and often can’t be reached by road. The TERRA projects have received key financing through the New Markets Tax Credit (NMTC). The NMTC was designed to increase the flow of capital to businesses and low income communities by providing a tax incentive to private investors. Over the last ten years, the NMTC has proven to be an effective, targeted and cost-efficient financing tool valued by businesses, communities and investors across the country. The NMTC program attracts capital to low income communities by providing private investors with a federal tax credit for investments made in businesses or economic development projects located in some of the most distressed communities in the nation – census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median. Since its inception, NMTC investments have leveraged more than $80 billion in total capital investment to businesses and revitalization projects in communities with high rates of poverty and unemployment and has generated more than one million jobs. More importantly, the NMTC helps people in areas that are too often overlooked in favor of residents in more populous areas. Congress authorized the program as part of the bipartisan Community Renewal Tax Relief Act of 2000, and is funded through 2019. Without further action, however, the projects like TERRA have little chance ever coming to fruition. As we go online today, on #InternetDay, on our laptops, smartphones and tablets to read about the amazing things we can achieve through connectivity, let’s take a minute to consider those who still need to be brought into the fold, and how that can be achieved. Supporting more projects like TERRA, and preserving financing resources like the New Markets Tax Credit must be part of that thinking. Phil Glynn is president of Travois, headquartered in Kansas City, Mo., which provided funding to the TERRA project.

National Recovery Month: NMTC Financing Addiction Treatment in Under-Served Communities

September is National Recovery Month, which is sponsored by the Substance Abuse and Mental Health Services Administration (SAMHSA) to raise awareness of mental and substance abuse and celebrate recovery. The theme this year is Join the Voices for Recovery: Invest in Health, Home, Purpose, and Community. For the NMTC community, the focus on investment and community seems particularly applicable. The New Markets Tax Credit may not be the first financial tool that comes to mind for most, but it is in fact a resource that communities can use to help address the need for more treatment facilities.
Ribbon Cutting at Garlington Campus. Photo credit: Cascadia Behavioral Healthcare
There are a number of NMTC-financed addiction treatment centers around the country, which we have featured under the stories tab on the NMTC Coalition website. In addition to those facilities, the Cascadia Behavioral Healthcare’s Garlington Campus is the newest NMTC-financed addiction treatment facility. NMTC Coalition Board Member United Fund Advisors provided NMTC allocation for the project, which opened last Friday in Portland, Oregon. Cascadia describes the facility as “one of Oregon’s most innovative community-centered campuses – anchored by the new Garlington Health Center, which provides integrated health care services – mental health, substance use recovery, primary care, and wellness programs – all in one location to support a person’s whole health needs.” The project received $4.5 million in NMTC financing and includes a 24,000 square-foot clinic, providing mental health and addiction recovery services, primary care, neighborhood wellness programs, as well as 52 apartments. The drug addiction and overdose rate has soared historic levels, largely due to the opioid epidemic, which has ravaged communities and families living in small towns, urban cities, and everywhere in between. While there are many federal programs and other legislation aimed at specifically funding research and treatment, it is imperative that communities and leaders work together to use every resource available. The NMTC, with its flexibility and community-driven approach, can be a part of that equation, helping low-income, under-served areas build and deliver addiction and mental health services their communities’ currently lack.

Coalition Releases 2018 New Markets Tax Credit (NMTC) Progress Report

Report highlights NMTC project data from 2017, including 52 healthcare facilities, 69 manufacturers, 26 facilities for youth and families, and 23 vocational training centers WASHINGTON, D.C. (June 6, 2018) —The New Markets Tax Credit Coalition today released its 2018 New Markets Tax Credit (NMTC) Progress Report, the fourteenth edition of the report—providing a survey of NMTC activities in 2017. As in the past, the report documents the flexibility and importance of the NMTC in meeting the needs of the distressed communities where it is deployed and helping to create jobs and grow business opportunities, from more traditional industry and community sectors to new and cutting-edge technology. Despite considerable uncertainty associated with legislative battles on Capitol Hill in 2017, demand by investors remained at record levels despite the uncertainty of tax reform. “The report findings show that the competition for credits is fierce, and continues to drive efficiency, investment and jobs,” said Kermit Billups, NMTC Coalition president and executive vice president of Greenline Ventures. “Last year’s projects, once again, raised the bar even higher. We’re happy to report the NMTC helped create 60,000 jobs through $5.8 billion in total project investment.” The report was prepared for the NMTC Coalition, a national membership organization of Community Development Entities (CDEs) and investors organized to advocate on behalf of the NMTC. Every year since 2005, the NMTC Coalition surveys CDEs on their work delivering billions of dollars to businesses, creating jobs, and rejuvenating the parts of the country that have been left behind. The annual NMTC Progress Report presents the findings of the CDE survey and provides policymakers and practitioners with the latest trends and successes of the NMTC. “The Coalition’s annual survey asks CDEs to report on the deployment of their allocation, investor trends, and a variety of community impact metrics,” said Coalition spokesperson Bob Rapoza. “The findings clearly demonstrate that the NMTC continues to deliver capital to the communities left behind by the changing economy, with 83 percent of projects in severely distressed communities in the last year—far exceeding statutory requirements. Moreover, the program is delivering a significant ‘bang for the buck’ for taxpayers in terms of the jobs, amenities, community facilities, and tax revenue it generates.” Eighty-nine CDEs participated in the 2018 survey and provided data on their progress raising capital, lending, and investing for 271 projects in 2017 with the NMTC. All told, the report analyzed 81 percent of the NMTC activity in 2017, or about $3.9 billion out of $4.8 billion. Respondents reported projects in 45 states plus the District of Columbia, and they ranged from a public library to a sprawling, $200 million multi-use campus for entrepreneurship. “As we have seen year over year, the NMTC has unleashed an unprecedented amount of investment in areas struggling with high unemployment and poverty,” added Rapoza. “State by state, community by community, the impact and flexibility of the NMTC continues to create economic opportunity in every corner of the nation.” For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s NMTC at Work in Communities report or check out its Project Profile Map. About New Markets Tax Credit Program The New Markets Tax Credit was enacted in 2000 in an effort to stimulate private investment and economic growth in low-income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. The NMTC is a 39 percent federal tax credit, taken over seven years, on investments made in economically distressed communities. Today due to NMTC, more than $75 billion is hard at work in underserved communities in all 50 states, the District of Columbia, and Puerto Rico.

The NMTC, Business Financing, and Entrepreneurship

By Paul Anderson

Today, the White House released its annual Economic Report of the President. The report included a sidebar on "Distressed Communities and the Tax Cuts and Jobs Act that mentions the New Markets Tax Credit (see right) and then later goes on to describe the Invest in Opportunity Act (IOA).

While the IOA and New Markets Tax Credit (NMTC) target many of the same census tracts, no question that the NMTC and the IOA serve different but complementary purposes. Opportunity Funds will make equity investments in businesses. Community Development Entities mostly use the NMTC to provide debt to businesses and community facilities. That's why we are so excited see these programs working side by side. 

We appreciate the White House highlighting the NMTC's success, but I do feel the need to correct a couple of misconceptions about the NMTC, real estate, and entrepreneurship.

First of all, we should not be too quick to dismiss the value of construction and rehabilitation projects in creating jobs and opportunity. Construction jobs - while often temporary - typically provide good pay and benefits. The construction industry - perhaps more than any other industry - offers apprenticeship and on the job training, providing an avenue for advancement. Construction spurs secondary economic activity (down the supply chain) that is easy to identify and measure. While an increase in construction income and the resulting macroeconomic boost to the economy may be temporary, real estate investment creates or improves a tangible asset that will serve a community for decades to come.

White House Comment on Distressed Communities and the Tax Cuts and Jobs Act

"The Federal government has an active set of policies to encourage investment and job creation in distressed communities, including Empowerment Zones, Enterprise5 Communities, Renewal Communities, and New Market Tax Credits (NMTC). The NMTC—arguably, the most successful of these programs—is structured to induce “patient” capital, providing substantial investment incentives if assets are held over a full seven years. As a result, although the majority of NMTC recipients would not have otherwise invested in the benefiting community, real estate has been the investment of choice, both because real estate returns are naturally long-run and because these investments clearly complied with NMTC regulations (Bernstein and Hassett 2015). But real estate is likely not the most effective tool for job growth, and the program is reportedly difficult for entrepreneurs to navigate."

Purpose of NMTC-Financing (2003-2016)

Purpose of Loan or InvestmentTotal (2003-2016)Percentage (2003-2016)
Total$43,572,242,863
Real Estate$22,011,770,193 50.5%
Non-Real Estate$21,560,472,67049.5%

Secondly, it is a misconception that the NMTC almost exclusively finances construction. While a majority of NMTC projects (roughly 65%) involve some sort of construction or rehabilitation, most NMTC real estate projects also involve the provision of working capital, purchase of equipment, or other financing supporting for an operating business. When you look past the project level and trace NMTC transaction activity to the primary purpose of each financial note, the share of real estate vs non-real estate is about even (see table to the right).

Finally, while it is true that the NMTC does not often provide direct financing to entrepreneurs, the program has been used to capitalize small business loan pools supporting emerging businesses and startup. And increasingly, the NMTC is financing projects that support the entrepreneurial ecosystem. In 2016, according to NMTC Coalition survey data, about 6% of projects financed were business incubators, creative office space, and other physical infrastructure that helps accelerate the development of small businesses, support aspiring culinary entrepreneurs, or foster social enterprise. Below find a few of the many examples across the country. 

Supporting the Entrepreneurial Ecosystem

The Highlander Accelerator, Omaha, NE

The Highlander Accelerator in Omaha, Nebraska, rejuvenated the blighted former site of a failed 23-acre public housing complex demolished in 2009.

The Accelerator offers rents 50 percent below the market rate to facilitate a carefully selected mix of nonprofit and commercial tenants that maximize impact on the educational opportunities, health, and well-being of disadvantaged neighborhood residents. The facility includes over 17,500 SF for Whispering Roots (right), a nonprofit aquaponics organization that will produce fish and leafy greens in a high-tech “closed loop” system.

Studebaker Innovation Center/Renaissance District, South Bend, IN

Adaptive reuse of a former Studebaker automobile manufacturing facility (built between 1923 and 1946) into office, education, incubator, advanced manufacturing and training space. Created 634 full-time equivalent jobs and 131 construction jobs.

An Interview with Andrew Wiand, Executive Director of enFocus, at the Renaissance District

Rocky Mountain Innosphere, Fort Collins, CO

Supporting Culinary Entrepreneurs

The Findlay Kitchen, an Incubator in Cincinnati

Union Hall – A Dynamic Center of Gravity for Entrepreneurs in Cincinnati, OH

LA Prep Commercial Kitchen Incubator

NMTCs Serve Up New Space for Food Business Entrepreneurs

Ivy Tech Culinary School

R House: Baltimore's Emerging Chefs

FareStart Culinary Academy Puts Homeless on Path to Success

BOOM! Health Project Includes Workforce Training Cafe

Enterprise Community Partners and Chase financed a mixed-use project in the Bronx that includes, among other things, a café called BOOM!Café, which will double as a community space and workforce training center on the ground floor. BOOM is working with Catalyst Kitchen, an incubator of food service social enterprises based in Seattle, to establish a training program and business model for the café.

Learn more about the project.

Thousands of Organizations Urge Congress to Save NMTC in Tax Reform

More than 2,100 Businesses, investors and organizations call on Congress to expand and make the community and economic development tax credit permanent in tax reform (Washington, D.C.) –Today, the New Markets Tax Credit (NMTC) Coalition sent a letter addressed to the House Ways and Means Committee and its Chairman, Kevin Brady (R-TX), as well as to the Senate Finance Committee and its Chairman, Orin G. Hatch (R-UT). The letters urge the two Chairman  to include a permanent extension and expansion of the New Markets Tax Credit (NMTC) in tax reform legislation, along the lines of the bipartisan New Markets Tax Credit Extension Act of 2017 (H.R. 1098 / S. 384). More than 2,100 signatures came from banks and credit unions; nonprofits; businesses, ranging from very large businesses to small, family-owned operations; city governments; state and local elected officials and agencies; and associations that represent thousands of members. “As Congress considers tax reform legislation, we hope Members will take note of the broad support for New Markets Tax Credits,” said Robert W. Davenport, President of the NMTC Coalition and Special Advisor to National Development Council. “The letters were signed by thousands of organizations, representing every state and located in every type of community, from rural areas to urban neighborhoods, and everywhere in between. Why? Because they have seen firsthand the success of NMTC in revitalizing communities, creating jobs, increasing economic opportunity and improving lives.” Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the New Markets Tax Credit is a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities. The NMTC was most recently provided a five-year authorization in The PATH Act. (P.L. 114-113) in December 2015. There are presently 13 Senators signed on in support of S. 384, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). In the House, H.R. 1098 has 81 cosponsors, led by Reps. Pat Tiberi (R-OH), Tom Reed (R-NY), and Richard E. Neal (D-MA), who is the Ranking Member on the Ways and Means Committee.The NMTC works by providing a shallow federal tax credit of 39 percent, taken over seven years, for investments made in census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median. However, more than 72 percent of all NMTC investments have been in communities exhibiting severe economic distress, including unemployment rates more than 1.5 times the national average, a poverty rate of 30 percent or more, or a median income at or below 60 percent of the area median. Between 2003 and 2015, $42 billion in NMTC investments leveraged over $80 billion in total investments to businesses and revitalization projects in low-income rural and urban communities. “Despite an exemplary track record in revitalizing some of the poorest communities in our country, financing over 5,000 businesses, hospitals, daycare facilities, and manufacturing expansions and creating some 750,000 jobs, the future of the NMTC is under threat,”  said Bob Rapoza, spokesperson for the NMTC Coalition.  “No other the federal tax incentive is generally available to economically distressed rural and urban communities to promote economic revitalization. If the NMTC is not included in the tax reform legislation or is repealed to pay for other tax provisions, this vital tool for community development will cease to exist.” For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s NMTC at Work in Communities report or check out its Project Profile Map.

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Helping Meet Housing Needs After Katrina

Housing damaged by Katrina

After Katrina and Rita, the New Markets Tax Credit (NMTC) served an important role in rebuilding community facilities including hospitals and schools, helping businesses replace damaged furniture and equipment, and bringing life back to devastated areas. Disasters isolate low-income areas that already lag far behind affluent communities in the availability of basic services like healthcare as well as the physical infrastructure needed to grow businesses and create economic opportunity. The construction of facilities and infrastructure is important, but economic recovery is difficult - if not impossible - if residents have no where to live. Katrina and Rita collectively displaced 1.3 million people and caused severe or major damage to tens of thousands of owner-occupied homes in areas struggling with high poverty and unemployment before the storm.

The NMTC played an underappreciated role in financing new or renovated homes for displaced families after the storm. NMTC financing supported more than 1,000 single-family homes for displaced residents of disaster areas. One example is a groundbreaking, scalable project supported by Greenline Ventures, a community development organization that finances projects that provide returns for investors and create positive impact in communities.

A Model for Rebuilding Homes

Hurricanes - like thunderstorms - often create damage that looks scattered or convective on a map. One neighborhood be severely damaged while an adjacent neighborhood sits remarkably untouched. Displaced residents wait in shelters or stay with family and friends, but their luckier neighbors see their economic prospects suffer as well. A community cannot fully recover until its residents return to their homes, making it whole again. 

"Housing really is the most immediate concern after a hurricane," said Kermit Billups of Greenline Ventures.

While programs like LIHTC are very effective in financing large-scale rental developments, federal affordable housing policy does leave some gaps, and Greenline Ventures saw an opportunity to use the NMTC's flexibility to meet scattered, single-family housing needs and put people back to work. Greenline provided $700,000 in NMTC financing to a small, local developer to support 13 new affordable single-family houses in Louisiana.

To expedite the project, Greenline coordinated with local housing agencies and helped first-time developers understand the scope and desired outcomes of the rebuilding effort while helping them navigate red tape. They engaged local, minority and woman-owned contractors for most of the work, and eighty-five percent of the workers hired for construction were local. To finance the project, Greenline provided a clustered site redevelopment loan product that was not available on the conventional market and only possible thanks to subsidy from the NMTC.

"We followed the General Patton model of development: GET IT DONE." said Billups. "Housing kits and materials were shipped directly to construction sites so that building could begin as quickly as possible."

The project served as a scalable model for GO-Zone Housing development through public-private partnerships. It also provided the developer with credentials to receive an award for $75 million in FEMA and New Orleans funds to build similar housing in the region. Ultimately, they financed 450 units in New Orleans, Baton Rouge, and Lake Charles, creating an additional 540 construction jobs.

Before and After

Learn about other disaster recovery efforts supported by the NMTC