After an extensive search for financing in traditional banks, the Center for the Reconstruction of Habitat (CRH) recently unveiled the CRH Fund pilot project. Its primary goal is to provide a revolving fund and liquidity to community land banks for the rehabilitation of abandoned properties.

“Land banks are created by municipalities through the Municipal Code of 2020 to foster new housing options. Our organization’s mission and focus is to promote urban revitalization and affordable housing. And in the face of those challenges, we have sought other ways of financing that will help communities obtain affordable housing,” said Luis Gallardo, executive director of CRH.

In recent days, CRH Fund launched its first revolving line of credit with the Community Land and Property Corp. (LandBankPR), Puerto Rico’s first land bank, in Toa Baja. With an initial injection of $75,000, it seeks to initiate the housing rehabilitation process, starting with a property granted by the Public Nuisance Program of the municipality of Toa Baja.

“The operational process of the CRH Fund is clear: After using all means to identify the owner of the structure and exhausting all resources to have it properly rehabilitated, if not successful, the municipality acquires the abandoned property,” said Ismael González-Belén, president of the LandBankPR Citizens’ Board.

“It then transfers it to the community land bank for rehabilitation and finally makes it available to low-income families in order to return the property to productive use for the community,” he said. “Together with organizations such as CRH, LandBankPR is committed to the vulnerable communities of Toa Baja and we will directly address the housing and quality of life challenges of the municipality’s residents.”

Betito Márquez-García, mayor of Toa Baja, added, “We are pleased that this project, which we began as pioneers in Puerto Rico through an alliance with the CRH, continues to advance with processes in which transparency and citizen participation have been key.”

“The issue of public nuisances is a timely one within the vision of transformation and socioeconomic development of our people,” he said. “I thank the CRH and the Citizens’ Board that has in its hands the proper disposition of these properties for their rehabilitation and making them affordable for housing or other needs that the community may identify for their use.”

CRH’s role is to take on the financial responsibility of revitalizing structures that are generally ineligible for loans at traditional banking institutions. Through an injection of seed funding from an ecosystem of nonprofits, including the League of Cities, CRH and Sembrando Sentido, and through a grant from the Magic Cabinet Foundation, the Segarra Boerman Foundation and Philanthropy PR, the pilot project seeks to strengthen that nonprofit ecosystem, including community land banks.

Recently, CRH was selected by the Hispanic Federation and its Amanece program to expand the revolving fund to include land banks in other municipalities.

“It’s important to note that this fund will assume a higher level of financial risk, motivated by the positive social impact that this initiative entails. By providing affordable housing alternatives and addressing public nuisance issues, the CRH Fund seeks to positively improve communities and the quality of life of its residents,” Gallardo said.

“Once a rehabilitated property is sold, the funds are returned to the CRH Fund’s revolving line, allowing the revitalization cycle to continue and expand to other properties in similar condition,” Gallardo added.

CRH hopes this pilot project will serve as a replicable model for other communities and municipalities facing similar housing shortage and urban revitalization challenges.

Source: News is my Business