In 1982, Jim and Patty Rouse founded Enterprise Community Partners, Inc. (then named The Enterprise Foundation), with this mission: to see that all low-income people in the United States have the opportunity for fit and affordable housing and to move up and out of poverty into the mainstream of American life.
On March 7, 1984, Rouse, the renowned master developer and champion for affordable housing, formed the financing arm of Enterprise now known as Enterprise Community Investment, Inc. (then named The Enterprise Social Investment Corporation, or ESIC), a socially motivated for-profit company. The financing arm’s primary purpose was to fund Enterprise’s affordable housing initiatives through the syndication of tax shelter benefits to for-profit corporations, a process Rouse pioneered based on his belief in the power of private initiative and the free enterprise system to promote social good.
However, in 1986 Congress began to overhaul the tax code, and this tax benefit was one of the first it proposed to eliminate. In response, Enterprise successfully led the charge to create an even more attractive vehicle to encourage the private investment of capital for the development and rehabilitation of affordable housing. As a result, a clause was included in the Tax Reform Act of 1986 that created the Low-Income Housing Tax Credit (LIHTC) program—a dollar-for-dollar tax credit for affordable housing investments.
To launch the program, Enterprise solicited corporations to invest in a $50 million account to take advantage of the new tax credits. In January 1987, Fannie Mae became the first to do so, and in May of that year, Fannie Mae and Enterprise announced that work had begun on the first LIHTC funded affordable housing project in the country—the transformation of a downtown Pittsburgh YMCA into a shelter for the homeless called Wood Street Commons. The 16-story facility for temporary and permanent housing included 270 single-room occupancy beds that would rent for between $75 and $150 a month. The project was, according to Rouse, “an outstanding example of how a public-private partnership can work to provide housing for the less fortunate.”
The LIHTC program accounts for nearly 90 percent of the nation’s affordable housing created today.
Over the past 25 years, Enterprise’s commitment to our mission has developed into a comprehensive array of financing tools to support community transformation. Pre-development lending, permanent financing, grants, tax credit equity, as well as development expertise result in quality, affordable housing, mixed-use development, office and commercial real estate projects, and preservation projects. Currently, Enterprise is investing in communities at a rate of $1 billion a year.
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