Morgan Stanley has issued a $1 billion social bond that will be used to finance affordable housing projects. This is the latest step in the firm's commitment to sustainable investing, according to Morgan Stanley.

The announcement comes on the heels of the firm's green bond, which was issued by Morgan Stanley in 2015 and supports renewable energy and energy efficiency projects. The firm has been building sustainable finance practices for the last decade, and as a result, it has a track record of creating social bonds that raise capital for environmental and social impact investments. The firm launched its first public market bond in 2017 to support opportunities in underserved communities.

The coronavirus pandemic has fueled demand for affordable housing and has intensified the housing crisis that already existed prior to the pandemic. Entering the pandemic, half of US households were rent burdened, which means they paid more than 30% of their income toward rent. However, since the start of the pandemic, there has been increased activity for affordable projects. In addition, there is tremendous industry support for affordable housing projects. Institute of Real Estate Management, the Mortgage Bankers Association and National Association of Realtors have all lobbied Congress for more relief.