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The State of Missouri has multiple tax credit programs to provide
incentives for investments and charitable contributions. This
regular column features examples of how the various Missouri state
tax credit programs benefit the St. Louis Region.
For too many years, low- and moderate-income housing failed to
adequately serve the St. Louis community. As a result, quality
of living was poor and tenant turnover was rapid. But as the St.
Louis Equity Fund is proving, affordable housing can be successful
and even profitable. Through the use of Federal and Missouri State
low income housing tax credits, the Fund provides high-quality
affordable housing benefiting not only project tenants and Fund
investors, but the entire community.
Created in 1988, the St. Louis Equity Fund, Inc. (“SLEFI”) has
consistently used innovative methods to help build quality housing.
SLEFI manages the investment of 39 corporations and banks in 69
developments located throughout the St. Louis metropolitan area
and the State of Missouri. The Fund’s projects range in size from
single family residences to the recently closed 152 unit town
home development planned for the site of the former Darst Webbe
project on the Near Southside. In all, the St. Louis Equity Fund
has worked with developers and not-for-profit organizations to
create homes for more than 1,600 families.
Each year the St. Louis Equity Fund works with a variety of developers
to finance new construction, moderate rehabilitation, and historic
renovation, but the Fund’s long-term commitment to its projects
is what really sets it apart. Even after construction is complete,
the Fund plays an active role in monitoring its projects. “We
are in this for the long haul,” states SLEFI president Timothy
Barry. The St. Louis Equity Fund verifies the timeliness of mortgage
payments, insurance coverage, property maintenance, and other
asset management items.
The St. Louis Equity Fund also distinguishes itself by being profitable
for investors. “This is a competitive rate of return,” Barry notes.
Indeed, these attractive returns illustrate how the St. Louis
Equity Fund merges profit making and community building. In return
for SLEFI investments, paid in over five to six years, Fund investors
receive low-income housing tax credits over a period of 10 years.
These investors may apply these credits against their Federal
and Missouri State income taxes. Through the use of these tax
credits, the Fund has created a mutually beneficial public-private
partnership. Committed to giving investors, “a return on their
investment in the range of financial returns accepted by the majority
of the market,” the St. Louis Equity Fund grew to more than $10
million in 1999.
A prime example of the St. Louis Equity Fund’s commitment to affordable
housing is its partnership with Beyond Housing, formerly Ecumenical
Housing Production Corporation. Beyond Housing, a not-for-profit
corporation, and St. Louis Equity Fund have combined to create
11 partnerships and 111 homes. Beyond Housing, as its name suggests,
provides an array of services beyond the physical home to the
families they assist. These services include tutorial and back-to-school
programs for children as well as continuing education and job
counseling for adults. This holistic approach seems to be working.
Families stay an average of five years and frequently move on
to market rate homes and in growing numbers, to home ownership.
Each year, new investors join long time SLEFI supporters such
as Anheuser-Busch Company, Ameren-UE, Laclede Gas Company, Heartland
Bank, Bank of America, and Firstar Community Development Corporation
in building quality affordable housing. The Fund is also popular
with banks, both large and small, as a vehicle for meeting their
obligations under the Community Reinvestment Act, which encourages
lending and investment in urban areas. “The St. Louis Equity Fund
is an excellent investment opportunity. It offers outstanding
tax benefits that provide real returns to investors and local
families,” notes Beth Stohr, president of Firstar’s Community
Development Corporation. “By combining corporate interest with
public needs, the fund makes a unique and lasting contribution
in our communities.”
There are still many St. Louisans looking for quality affordable
housing, but St. Louis Equity Fund Inc. is helping to resolve
that. Guided by a continued commitment to its projects and the
neighborhoods in which it develops, the Fund is unique in its
ability to create high-quality affordable housing while offering
a profit to investors. With SLEFI’s continued use of state and
federal tax credit programs, a partnership with a strong development
community, and local investors, the St. Louis community will continue
to improve and prosper.
Scott Hall is an associate of DFC Group, Inc.,
tax credit consultants to the Firstar Tax Credit Clearinghouse.
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