By Mara Gay
Longtime affordable-housing lender Community Preservation Corp.
is getting an infusion of $350 million to invest in struggling
neighborhoods, part of a private-public partnership that New York
City Mayor Bill de Blasio called essential to his agenda.
The partnership, between the city and banks, will allow the
nonprofit lender to spur the renovation of an estimated 7,500 units
of affordable housing, most in low-rise buildings across the five
boroughs.
Mr. de Blasio said the private capital was critical to making
good on his $41 billion plan to create or preserve 200,000 units of
affordable housing over the next decade.
"Private involvement of course is deeply necessary for what
we're doing here today and everything that we intend to do in our
plan," Mr. de Blasio said Wednesday at a news conference in the
Bronx.
"It's very, very important that companies that are here invest
in the future of this city," Mr. de Blasio said. "A lot of this
housing will be in neighborhoods that need it most."
Citigroup Inc. and the city put forth large amounts of the
money. Citigroup contributed $75 million. The city's five public
pension funds contributed $40 million, and its Housing Development
Corp. put up the initial $20 million investment. Wells Fargo &
Co. and Morgan Stanley each contributed $50 million. In all, 14
banks invested in the partnership.
Banks are required by federal law to invest a certain amount of
money in community projects, such as affordable housing, in areas
where they have deposits.
Mr. de Blasio, a Democrat who campaigned last year in part on
reducing income inequality, thanked Citigroup on Wednesday and said
the bank had invested hundreds of millions in affordable housing
ventures in recent years.
"They're going to have a lot more business with this
administration," Mr. de Blasio joked.
The CPC, founded by David Rockefeller in 1974, was known for
years as an important player in nonprofit lending--aiding in the
revitalization of about 150,000 units of affordable housing across
New York. The lender struggled during the recession, however,
grappling with nearly $900 million in exposure to the hard-hit
condominium market. It has recovered in the past few years.
Last year, it received $250 million in capital from Citigroup to
rehabilitate affordable housing.
This year's capital infusion means "more people are going to
have homes they can afford" and more "neighborhoods are going to be
stabilized," said Rafael E. Cestero, CPC's president and chief
executive.
Citigroup Chief Executive Michael Corbat described the $75
million commitment by the New York-based bank as an investment.
"I want to make clear that this isn't philanthropy," Mr. Corbat
said. "This is a business decision as well as an investment in our
hometown."
Laura Kusisto contributed to this article.
Write to Mara Gay at mara.gay@wsj.com
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