Sunrise Banks CEO David Reiling speaks at the Jan. 10 event announcing the CDC partnership.
Sunrise Banks has invested $19 million in a Community Development Corporation (CDC) fund that will save approximately 600 units of affordable housing in the Twin Cities.
The Sunrise Banks Community Impact CDC has also leveraged funds from the Minneapolis Foundation, Minnesota & St. Paul Foundation and Frey Foundation. The CDC money will be used to invest in existing, reasonably priced rental housing in Minneapolis, St. Paul and the surrounding metro in an effort to combat the affordable housing crisis facing the state and the nation.
Aeon, a nonprofit property manager and developer, will manage and rent the housing units purchased with the CDC funds.
The creation of the CDC comes as cities around the country deal with an affordable housing crisis. The Twin Cities Metro has lost more affordable housing than it added since 2011, according to the Metropolitan Council. Last month, Gov. Tim Walz recommended the state put forward $276 million to fund affordable housing projects across Minnesota.
The project is unique for a bank of Sunrise’s size. In addition, collaboration from the partnering foundations has allowed the bank to maintain its necessary capital ratios while still putting forth a substantial amount of money towards the project.
“Affordable housing is key to financially stable and successful communities,” said Sunrise Banks CEO David Reiling. “Our creation of the Sunrise Banks Community Impact CDC and our partnership with these local organizations is something we’re very proud of and a great accomplishment for everyone involved.”
CDCs are created to deliver funding for underserved communities. They usually provide resources for housing, business development and general economic revitalization. There are an estimated 4,600 CDCs across the country.
News of the Sunrise Banks Community Impact CDC was announced on Jan. 10 at the bank’s headquarters. During the event, a tenant of one of Aeon’s properties gave an emotional statement emphasizing how important it is that the organization provides affordable housing.
“The scope of the problem our community is facing is so great that we must tackle it together. The problem just gets worse as we see affordable housing properties gobbled up and converted into high-rent apartments,” said Aeon President and CEO Alan Arthur. “Through this collaboration, we are ensuring the stability of home for hundreds of residents.”
Funds from the CDC have already been used to acquire a 128-unit building in Brooklyn Center. The units at this building are all leased affordably to residents whose incomes fall at 60% or below of the area median income.
The Sunrise Banks Community Impact CDC is not open to public investment. However, those looking to help address the problem can do so through charitable donations to local nonprofits that are working to end the affordable housing crisis.