The pool of funds available for affordable housing in Orange County has grown by $500,000 as a result of an investment by Banc of California in NeighborWorks Orange County.
Under a program called California Organized Investment Network (COIN), Banc of California in return will receive a $100,000 tax credit. COIN aims to promote investment in low-income communities.
To qualify for the tax credit, administered by the state Department of Insurance, insurance companies, banks and other entities must invest a minimum $50,000 with a certified Community Development Financial Institution such as NeighborWorks for at least five years at 0 percent interest. The 20 percent tax credit is allocated in the first year.
Glenn Hayes, president and CEO of NeighborWorks Orange County, said that the $500,000 investment is the largest that his organization has received under the COIN program, which launched in 1997. He said that the Banc of California investment would push the level of such funding his nonprofit agency has received to more than $1 million.
“We will invest 100 percent of the money into affordable rental housing,” Hayes said. “All of it will benefit low- and moderate-income individuals and families.”
The investment could enable the agency to provide as much as $1 million in low-cost loans for affordable housing development.
That is crucial in a County where workers often find it difficult to afford a decent place to live.
“This is making possible affordable housing, either getting additional affordable housing or maintaining affordable housing,” Hayes said.
By the end of 2015, the average apartment rent in Orange County had reached $1,834, according to the Orange County Economic Indicators Dashboard. Meanwhile, the median price of an Orange County home recently reached $625,000, The Orange County Register reported in April.
The tax credit was announced recently by California Insurance Commissioner Dave Jones. The department allocates $10 million in tax credits each year to support $50 million in community development investments.
Banc of California is represented on the NeighborWorks Orange County board of directors by Gary Dunn, senior vice president of the bank. Dunn chairs the NeighborWorks board.
Such partnerships are crucial, Hayes said.
“The community really benefits because we get to use those capital dollars for home loans or purchasing or rehabilitating properties, Hayes said.
The mission of NeighborWorks Orange County, with offices in Orange, is to strengthen communities and enhance the quality of life of residents “by promoting housing opportunities, financial responsibility and civic engagement.” It offers first-time homebuyer education and counseling, provides realty services, loans funds to develop quality affordable housing and seeks to build stronger neighborhoods through community-building programs. The nonprofit also owns more than 100 affordable housing units in Orange County.