KeyBank Says Boosting This Sector Is Crucial
KeyBank is not a newcomer to the campaign to generate affordable housing. The institution holds eight consecutive outstanding Community Reinvestment Act ratings. It's the first national bank to ever do that.
"We see a substantial need throughout the entire country for affordable housing, including the 15 markets that we currently serve. We have a very, very long successful track record of really being community leaders in this area," KeyBank national manager of community development lending and investment Robert Likes tells Bisnow.
Rob says that Keybank's recent shift from a debt and equity only position in the affordable space to being able to provide permanent debt will allow it to help more communities realize their affordable housing goals.
"Affordable housing is crucial," Rob tells Bisnow. "There's a major shortage of affordable housing in the country. You can't open a local paper or visit a local website these days without reading about the affordable housing crisis. It's coast-to-coast."
"Once the capital markets collapsed, the construction of multifamily units came to a halt because the banks stopped lending," SVP/program manager of affordable housing Al Beaumariage tells Bisnow. But the population continued to grow so the demand for housing units did as well. That enabled multifamily owners to raise rents considerably. They jumped 5% to 10% in given markets. "That further aggravates the program because people were struggling to pay before the rate hike."
Rob says an increase in affordable housing leads to an increase in discretionary income for tenants who inhabit it. This means more money can be spent on healthcare, education, and goods and services within the local community.
KeyBank's goal is for more Americans to spend 30% of their income or less on housing.
"We're interested in working with companies that create and preserve affordable housing," Al says.
He says the bank's drive to lend to those constructing affordable housing sets them apart from competitors. Only three of KeyBank's peers serve as both construction lenders and permanent lenders for affordable transactions.
To learn more about this Bisnow content partner and its efforts to lend to those building affordable housing, click here.