Morgan Stanley (NYSE: MS) and National Equity Fund, Inc. (NEF) today jointly announced the establishment of a new disaster-area development program that seeks to accelerate affordable housing construction and create jobs in U.S. regions devastated by recent storms, floods and tornados.
Morgan Stanley is establishing a $100 million “Rebuilding Local Economies Fund” that will target FEMA disaster counties in 13 states, including Missouri, North Carolina and Alabama, by investing in projects using Low Income Housing Tax Credits (LIHTC) to finance new construction or rehabilitation. NEF, a leading national syndicator of Low Income Housing Tax Credits, will manage the fund, which has the potential to replace up to 1,000 units of affordable housing and create approximately 4,000 new jobs. NEF is pairing the Morgan Stanley fund with $4 million in predevelopment lending to help project sponsors move their developments forward at an even faster pace. Projects must begin construction by March 2012 to qualify.
“Our goal is to support economic recovery in devastated regions by expediting the rebuilding of housing and creating jobs in those areas most in need,” said Audrey Choi, Managing Director and Head of Global Sustainable Finance at Morgan Stanley. “The communities that have been hit by the recent storms, floods and tornados can’t afford to wait for the typical lengthy development process. They need homes now. They need jobs now. By helping projects get off the ground more quickly, we are laying the foundation for economic recovery in these areas.”
Thirteen states were designated FEMA flood and windstorm disaster areas between April and June of this year. NEF operates in all of those states with a portfolio of housing investments that approaches $1.2 billion. NEF’s parent, the Local Initiatives Support Corporation (LISC), is likewise active in these states with broad-based urban and rural community development efforts. Morgan Stanley has previously invested in NEF and LISC efforts around the country, with a particular interest in environmentally sound “green” design and construction. The Rebuilding Local Economies Fund will focus on expediting construction of green affordable housing.
The Morgan Stanley-NEF program aims to slash significant time from the typical development process in places in dire need of replacement housing and jobs, said Joe Hagan, President and CEO of NEF.
“We think it is pretty amazing that the senior staff at Morgan Stanley sat down and asked, ‘How can we make a real difference in these places?” Hagan said. “Contributing to charitable relief efforts is one thing – and it’s a very important thing. But this $100 million fund means that hundreds of economically challenged residents will be able to find new homes, and communities can recoup some of the jobs lost to the storms. I’m not sure you can put a price tag on what that will mean to the folks who live there.”
Market dynamics have left many areas of the South and Midwest – especially rural communities – with few LIHTC sources for development, particularly expedited development efforts, Hagan explained. “The Low Income Housing Tax Credit is the nation’s most successful affordable housing production program. But it doesn’t work equally everywhere.”
“Morgan Stanley has long made it a priority to support investments in areas not well served by the rest of the market,” he noted. “They are continuing that with this program. These communities have a significant need for housing investment capital, and the tax credit is a terrific tool to help fuel recovery if we can put it to work quickly.”
The Morgan Stanley Rebuilding Local Economies Fund will target counties designated as FEMA disaster areas between April and June of 2011 in the following 13 states: Alabama, Arkansas, Georgia, Iowa, Kentucky, Minnesota, Mississippi, Missouri, North Carolina, North Dakota, Oklahoma, South Dakota and Tennessee.
For more information about project investments, contact: Robert Johnston at 972-342-6621 or email@example.com.
About Morgan Stanley
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,300 offices in 42 countries. Morgan Stanley seeks to give back to the communities in which its employees live and work through its Global Sustainable Finance group and its Community Affairs office. The Firm and its employees have provided nearly $2.5 million in disaster-relief funds in 2011. For further information about Morgan Stanley, please visit www.morganstanley.com.
About National Equity Fund
National Equity Fund, Inc. (NEF) is a nonprofit Chicago-based affiliate of the Local Initiatives Support Corporation (LISC) and the nation’s largest syndicator of Low Income Housing Tax Credits. Since 1987, NEF has invested $8.8 billion in more than 2,000 LIHTC projects that have built and preserved nearly 122,000 homes affordable to low-income families and individuals. For more information, visit www.nefinc.org or www.lisc.org.
Media Relations Contacts:
Morgan Stanley, Sandra Hernandez, 212-761-2446
National Equity Fund, Inc., Colleen Mulcahy, 312-342-8244