Citi Commits $60B To Affordable Housing, Nearly Doubling Pace Of Sector Investment

Citigroup announced a $60B affordable housing commitment that is aiming to create or preserve at least 250,000 units around the country. 

The banking giant plans to reach the target over the next five years through loans for the acquisition, construction, rehabilitation and permanent long-term financing of affordable housing. 

The planned outlay is nearly double the $32B in affordable housing loans provided by Citi Community Capital, the arm of the business responsible for most of Citi’s affordable housing activity, over the last five years, according to the bank.

“Housing affordability is one of the defining economic challenges of our time, and increasing supply is essential to addressing it,” CEO Jane Fraser said in a statement. “By expanding the amount of financing we provide for affordable housing, we open possibilities for prosperity, helping more Americans secure housing they can truly afford.”

Citi also plans to deploy $50M grants through its Citi Foundation to support nonprofits addressing local housing challenges and researching scalable solutions. The bank’s philanthropic arm is also providing a $1M grant to establish a fellowship program at the policy research partner supporting the National Association of Affordable Housing Lenders. 

The bank, the third-largest in the country, behind JPMorgan Chase and Bank of America, also committed to continuing its support of for-profit firms addressing housing affordability through its Citi Impact Fund, and it pledged to continue advocating for programs like the low-income housing tax credit.  

Edward Skyler, chair of the Citi Foundation, said the reasons for the shortage of quality affordable housing were complicated but boiled down to a misalignment between supply and demand. 

“Increasing supply is where our financial capabilities can make the greatest impact and, through this commitment, we are significantly increasing the capital we are putting to work,” he said in a statement.

The National Low Income Housing Coalition estimates the U.S. needs 7.1 million additional rentals to meet the current needs of just extremely low-income renters — households below the federal poverty guidelines or making less than 30% of the area median income — and a Zillow study found that the U.S. housing market is short some 4.7 million homes.

Thirty-five percent of Americans cite economic problems as the most pressing issue facing the country, according to a December Gallup poll, including 11% of respondents who cited the high cost of living as their top concern.

The Trump administration has pointed to immigration and corporate ownership of housing as causes of the housing crisis. 

The Department of Housing and Urban Development found that 8.5 million households faced acute financial strain due to housing costs in a biennial report released in December that pointed to illegal immigration as a drag on the reach of federal housing programs. 

HUD followed that report with a new policy announced this month that will force households with mixed immigration status off housing assistance, a move that critics say will lead to 100,000 people being evicted. 

The president called out corporate homeownership during a record 108-minute State of the Union speech Tuesday night and asked Congress to codify into law an executive order from January cracking down on corporations that buy and hold large portfolios of homes. The executive order leaves the door open to build-to-rent development.

“We want homes for people, not for corporations,” he said. “Corporations are doing just fine.”