Bank expands distressed housing initiative

Nov. 14—HIGH POINT — A bank with a significant High Point presence is expanding an affordable housing initiative to the most distressed neighborhoods of the city.

Pinnacle Financial Partners is buying nine vacant lots from the city in the East Central district between E. Green Drive and E. Martin Luther King Jr. Drive where it plans to develop single-family homes and sell them at cost to low- to moderate-income buyers.

In a 2015 UNC Greensboro "housing market segmentation" study commissioned by the city, neighborhoods in this part of High Point were found to have the highest local levels of poverty, vacancy and substandard housing.

"We're pioneering a little bit right there," said Rick Callicutt, chairman of the Carolinas and Virginia region for the bank. "If we can get three or four done and occupied, then that tends to be the tipping point where it starts to lift everybody up."

Callicutt started the housing program when Bank of North Carolina, which he then led, was in the process of buying High Point Bank.

It has continued under Nashville, Tennessee-based Pinnacle, which acquired Bank of North Carolina in 2017.

The program was seeded with $5 million from the bank, which has so far developed 32 houses, with eight more under construction, mostly in the Five Points area and on several streets off E. Lexington Avenue, between N. Main and N. Centennial streets.

"Once those eight now going on are sold, we'll have burned through about $7 million, in terms of value," Callicutt said. "You've got the people who originally bought who've had value appreciation by 45 or 50%, in some cases. I think it's certainly been a huge success here, the last five years. I'm looking forward to ringing the bell on $10 million, at some point."

For the next phase, the bank plans to buy nine empty tax-foreclosure lots on White Oak Street, E. Commerce Avenue and Walnut Street from the city for a total of $99,000, and then prepare them for foundation work before winter sets in.

This will build on the mission of the program of developing new infill-construction, owner-occupied houses — rather than rentals or investor-owned — in older neighborhoods, he said.

Despite rising interest rates, the bank has kept the costs of the houses attainable for buyers, Callicutt said.

"There are some fairly plentiful opportunities for people to take advantage of some state and federal programs for down payment assistance and things of that sort," he said. "We're not building them to make a profit. We're building them to improve the quality of life and help improve the city where we have a big investment as a firm."