A Community Focused Fund
Finding Affordable Rental Housing is a Struggle for America's Low-Income Families
- There's nowhere in the US where there's enough affordable rental housing for people at the bottom end of the income scale.
- As an example, the Lancaster Housing Opportunity Partnership reports that rental housing affordability is a major concern in the City of Lancaster, Pennsylvania.
- Since 1960, renters’ incomes have increased by only 5% while rents have risen 61% with renters now paying more than 30% of their income on housing.
- When adding transportation costs, that number jumps to 72% of all households being cost burdened.
- This issue is predicted to worsen if both an increase in multi-family housing and efforts to ensure affordability are not addressed.
Proposed First Project (Lancaster, Pennsylvania): Before and After
The OZFund is a community-focused ‘Qualified Opportunity Fund’ with plans to acquire properties for redevelopment into affordable rental housing and commercial space serving the neighborhood. We are focused on Central Pennsylvania and Mid-Atlantic Regions.
- For its first proposed project, the OZFund has acquired a large property located in South Queen Street, Lancaster, Pennsylvania. The OZFund property will be developed into about +/-72 affordable apartments and +/- 14,684sf of commercial space.
- The property is located in an Opportunity Zone as described by the Tax Cuts and Jobs Act (H.R. 1) of 2017 (TCJA). Opportunity Zones are intended to spur economic development and job creation in distressed communities while providing investors with an investment opportunity offering significant tax benefits.
- The OZFund is a Qualified Opportunity Fund (QOF). The QOF program has the potential to become the most impactful federal incentive for equity capital investment in low-income communities ever enacted. The QOF program is designed to tap into the country’s vast unrealized corporate and individual capital gains holdings, encouraging investors to invest their earnings in Qualified Opportunity Funds that support new and expanded business activity in low-income areas nationwide and in the US Territories. The immediate focus of the OZFund is central Pennsylvania and the mid-Atlantic region.
- The OZFund takes advantage of the tax benefits afforded by the program by acquiring real estate located in an Opportunity Zone and redeveloping those properties into affordable apartments, homes and commercial spaces. The fund may also make investments into job-creating businesses that lease space from OZFund.
- Taxpayers invest into the OZFund and receive significant tax benefits while enjoying an appreciation on their investment in a worthwhile community real estate project.
- No tax payable on any profits made from the investment if held in the fund for 10 years.
Tax Cuts and Jobs Act 2017:
The Opportunity Zone program is designed to tap into the country’s vast unrealized corporate and individual capital gains holdings. Investors invest in Qualified Opportunity Funds that support new and expanded business activity in low-income areas nationwide and in the US Territories.
To provide OZFund and its Investors with a profitable exit strategy while providing the investor with significant tax advantages. The Fund’s property development strategy is coupled with a plan to liquidate the investment once certain predetermined criteria has been met or exceeded.
Oversight and Project Management:
The Project Manager (PM) for the OZFund is the JPF Venture Group, Inc. (JPF Ventures), supported by professional architects, design, construction and land engineering specialists. The PM and professional partners leverage a distinctive combination of business and property development expertise through property acquisition and development together with proven management experience and multiple successful property development projects under their belt. The Principals of JPF Ventures have a successful track record when investing in challenging opportunities, including real estate investments.
Since 1990, companies founded and assisted by the Principals of the PM have raised millions of dollars in capital and launched more than half a dozen products and services. These products and services have been developed, marketed and sold to federal, state and local governmental agencies and to customers both large and small. JPF Ventures is well connected to federal, state and local governments in the US and beyond.
Benefits to Investors:
- The fund will be secured against the properties that it purchases.
- The fund is squarely focused on community development.
- Investing in job-creating businesses that lease space in OZFund properties offers additional investment income for the investor.
- OZFund is a long-term secured fund that offers significant tax benefits to the investor including no tax payable from profits if held for 10 years.