Ohio Banks Buck Trends, Invest Big in Affordable Housing

COLUMBUS, Ohio, Oct. 18, 2012 /PRNewswire/ -- After the fallout in the financial services market, who would believe that banks are investing heavily in housing, especially affordable housing? But that's exactly what is occurring in Ohio.

Ohio's banking industry set a record with the largest capital investment in affordable housing development in a single year. Showing confidence in the state's stabilizing economy, 15 banks invested $180 million in the 22^nd equity fund syndicated by Ohio Capital Corporation for Housing (OCCH), the nation's largest locally controlled capital fund dedicated to low-income rental housing development. Six financial institutions took the plunge to invest for the first time with OCCH.

The influx of new capital will help build 37 properties with more than 1,700 units of affordable housing.

2012 has turned out to be the best year for raising private capital, a sign that banks are investing again. They are also turning profits. Of Ohio's 236 banks and thrifts, more than 66 percent reported earnings gains during the last quarter, according to the trade association the Ohio Bankers League. Housing projects financed by the Low Income Housing Tax Credit reduce investors' federal tax liability on their profits dollar for dollar, so that doing social good is also good for business.

Their investments are also a tribute to the strong management and reputation of Ohio Capital Corporation for Housing. OCCH raised 32 percent more from investors in 2012 than just one year ago.

"To build new partnerships with so many community banks is a reflection of their commitment to underserved neighborhoods as well as our solid management," said Hal Keller, president of Ohio Capital Corporation for Housing.

H. Stewart Fitz Gibbon III, president and chief operating officer of Wayne Savings Community Bank, of Wooster, agrees. "We're investing in Ohio Capital Corporation's expertise and track record of success. Ohio Capital Corporation allows community banks like ours to combine and leverage our funds to meet the needs of low-income families, the elderly and disabled residents in our communities."

The banking industry's confidence is well placed. Despite the collapse of the housing market, none of OCCH's 29,000 housing units has been lost to foreclosure. 

Underscoring OCCH's strong performance, the U.S. Department of the Treasury in August announced an award of $1.45 million to the company's subsidiary, Ohio Capital Finance Corporation – the maximum amount granted by the government's Community Development Financial Institutions Fund – which will be invested in affordable housing in communities throughout Ohio.

Since 1989, OCCH has invested $2.5 billion in private corporate equity. This investment has acted as a catalyst for neighborhood revitalization and boosted Ohio's economy by stimulating $3.5 billion worth of construction.

The Low Income Housing Tax Credit program was created by Congress, is administered by the Ohio Housing Finance Agency and implemented by private enterprise. In Keller's view, "The tax credit program is the most successful government housing assistance program. The private sector takes all the risks and tenants pay the largest share of the costs. These public-private partnerships are the only way to create affordable housing at a time when it is so desperately needed."

Ohio, along with the rest of the nation, suffers from a severe affordable housing shortage for low-income, working households. In order to afford the rent for a two-bedroom apartment, a minimum wage earner must work 70 hours per week, 52 weeks per year, according to the Coalition on Housing and Homelessness in Ohio (COHHIO).

All Ohio Equity Fund XXII investors:

JPMorgan Capital Corporation, US Bancorp CDC, Key CDC, Northwestern Mutual Life Insurance, Fifth Third CDC, BB & T, The Huntington CDC, FirstMerit Bank, N.A., Park National Bank, First Federal of Lakewood, Westfield Bank, Wayne Savings, Citizens Bank, Farmers Citizens Bank, and Waterford Bank.

About Ohio Capital Corporation for Housing (www.occh.org): Ohio Capital Ohio Capital Corporation for Housing (OCCH) is the largest, locally controlled syndicator of low-Income tax credits in the nation. Based in Columbus, OCCH is a non-profit financial intermediary that provides developers of affordable housing with access to capital markets. Since 1989, OCCH has raised $2.5 billion in equity investment, financed more than 29,000 units of affordable housing, and assisted in the creation of more than 525 affordable housing projects. 

SOURCE Ohio Capital Corporation for Housing