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Episode
#1909
Community Development and Housing
Lewis: Mitchell Lewis, host
Rasheed: Abdul Rasheed, Founder, President and CEO of the
North Carolina Community Development Initiative (NCCDI), Raleigh,
NC
Rohe: Doctor Bill Rohe, Director, Center for Urban and Regional
Studies, UNC-Chapel Hill, Chapel Hill, NC
Lewis:
It’s
no secret that many of our communities need to be revitalized
and rebuilt. Some say, community development corporations
can do the trick, but do these organizations always deliver?
We’ll explore some answers tonight on Black Issues
Forum.
Voiceover:
This program was made possible by contributions to UNC-TV
from viewers like you. Thank you.
[THEME
MUSIC]
Lewis:
Good evening, everyone, and welcome to Black Issues Forum.
I’m Mitchell Lewis. Tonight, we are looking at community
development: what it takes to revitalize a community, and
who or what is most often behind the effort. Many African
Americans rely on community development corporations to help
rebuild neighborhoods diminished by economic neglect, but
do these corporations always deliver? A recent study conducted
by the University of North Carolina at Chapel Hill says the
answer is not in all cases. We have two guests with us tonight
who can speak to both sides of the topic. First, Abdul Rasheed,
CEO of the North Carolina Community Development Initiative
Incorporated based in Raleigh. And Doctor Bill Rohe, Director
of the Center for Urban and Regional Studies at UNC Chapel
Hill, who played a principal role in the UNC study. And, gentlemen,
welcome to Black Issues Forum.
Rasheed:
Mitch, thank you for having us.
Rohe:
A pleasure to be here.
Lewis:
Mr. Rasheed, I’ll start off with you. Tell us the
mission of the North Carolina Community Development Imitative.
Rasheed:
Well, Mitch, primarily the Initiative was established
approximately ten years ago to help support the work of local
community development corporations by providing funding resources,
grant resources, to help their operational costs, support
the operational costs — also to provide knowledge and
“intelligence,” if you will, about how to package
and get a project done at the local community level and, in
some instances, we also participate from a lending perspective
to help make the financing work for deals in local communities
and neighborhoods.
Lewis:
And, Dr. Rohe, could you explain to us about the Center
for Urban and Regional Studies.
Rohe:
Well, the Center for Urban and Regional Studies conducts
a variety of research projects for Federal government agencies,
for foundations, for State agencies, and local foundations.
We do a lot of evaluation research, that is, we look at how
programs are working and make recommendations for, typically,
how to improve those programs.
Lewis:
Dr. — well, Mr. Rasheed, what are some of the greatest
challenges that you are facing when it comes to developing
or revitalizing communities?
Rasheed:
Well, I think one of the first challenges these organizations
face is a human capital challenge, and that is having the
people and the “competence,” if you will, inside
the organization to, first, understand the context, the environment,
the challenge, the opportunity, and then be able to put together
a very well, carefully structured plan to approach and set
goals and objectives that are reasonable, that can be reached
based on the real difficulty of the context of the environment.
Secondly, I think there’s a capital situation that always
raises its face and head in terms of trying to have the necessary
capital resources to undertake whatever the project or deal
might be. And, then, I would say, thirdly, is making sure
that you have the kind of collaboration, the kind of relationships
with both public and private sector also that will give the
project every opportunity to succeed.
Lewis:
Dr. Rohe, you have authored —co-authored a book
entitled, Planning With Neighborhoods, and you’ve
written many topics on housing and policies involved. What
are some of the challenges that you see when it comes to community
development?
Rohe:
Well, there are a variety of them. Abdul just mentioned
several key ones. One of the issues right now has to do with
just the sheer number of community development corporations,
and there is some question as to — at least in some
communities — whether there aren’t more than are
really necessary. Sometimes, you find two and maybe even three
CDCs trying to do business in a single section of a city,
and many of the funders are finding that untenable and saying,
“We want these organizations to combine their efforts.
We want — in many instances — bigger,
more effective organizations as opposed to more, smaller and
less effective organizations.”
Lewis:
Now, talking on the issue of housing and affordable housing,
most people have misconceptions about what, I guess, the parameters
are involving affordable housing. Mr. Rasheed, what are some
of the things that you’re seeing.
Rasheed:
Well, let me first say that I think that affordable housing
has gotten a bad — has been associated with a bad context
in that now folks are associating all affordable housing with
poverty and bad environments and bad kind of social situations
that none of us really want to be a part of. When we talk
about affordable housing, we’re talking about market-rate
housing that targeted to certain individuals based on their
ability to afford the product. In our case, now, we have a
lot of folk who provide absolutely necessary support and services
to our community — entry-level teachers, nurses, nurses’
assistants, firemen, policemen, etc. — who, now, because
of the escalating cost of housing, find themselves needing
some opportunity to find houses that they can afford based
on their own income level, not just your traditional individual
who is struggling in service and other related jobs, but those
necessary community support positions now need housing that
they can afford. And that’s what we’re talking
about when we say “affordable housing.” A first
time home buyer is generally someone who has limited means,
and they’re trying to get their first home, and it has
to be affordable. Otherwise, it doesn’t work.
Lewis:
Now, Dr. Rohe, what is making housing less affordable,
especially when it comes to these communities?
Rohe:
Well, there’s a lot of pressures in an area like
the Triangle and other places in North Carolina. There’s
a great in-migration of people. People want to live here;
in which case, it’s just an increased demand for housing.
As businesses grow, they bring on new workers. Those workers
have to live somewhere, and not only the people that are the
white-collar workers, but the blue-collar workers. So, that’s
clearly an important piece of it. Housing has also been seen
as just a great investment, so some — many more
people are buying housing and, often, more housing than they
really need, in order for investment purposes. So, that also
puts more pressure on the housing stock and makes less housing
available.
Lewis:
I’ll — go ahead, Mr. Rasheed.
Rasheed:
Yeah. Listen, let me jump on that, too, and say that,
you know, that land is not getting any cheaper. We’re
not making any more land, so as the population increases in
an area, the value of land goes up. So, that’s the first
factor. Materials. Wood and other materials that are necessary
to do housing — those costs are rising every housing
“season,” if you will. Each year, we find the
cost, in order to just do the home, has increased to such
a level that is making it more and more difficult for people
at eighty percent of median, sixty percent of median, fifty
percent of median, to be able to qualify for your traditional
mortgage, and so — go ahead. I’m sorry.
Rohe:
I was just going to say the other issue is the developers
are really focusing in on the higher price units. They make
more money selling, building and selling a three hundred,
four hundred thousand dollar house than they do a hundred
thousand or a hundred and fifty thousand dollar house. So,
you find the traditional developers are not building affordable
homes, and that’s why you need CDC’s and non-profit
developers to come in and fill that void.
Lewis:
Now, this question is directed, actually, to both of you.
Are there unique challenges for African Americans or folks
in African American or minority communities to get into housing,
or does the challenge vary perhaps from perhaps urban and
rural settings? Mr. Rasheed?
Rasheed:
Well, you know, I think housing is a very straightforward
transaction, and either you have the resources necessary to
qualify for the financing to get the house done or you don’t.
Now, having said that, I don’t ever want to suggest
that racism is dead and that there isn’t always some
issues that we need to look at more carefully in terms of
making sure that there’s equity and fairness in terms
of how people are looked at as they approach trying to secure
financing and the necessary capital to get a home done. But
housing is a very straightforward transaction, and the way
that the mortgage system is set up now based on certain FICA
scores, etcetera, if you don’t hit a certain number
point in terms of your debt and income ratio, then it doesn’t
matter whether you’re black, white, blue or green. Generally,
you cannot get that mortgage. You have to demonstrate that
you can afford the debt that is associated with the project
that you’re trying to get done.
Lewis:
Dr. Rohe.
Rohe:
The research shows that there’s still a fair amount
of discrimination in the housing market. It’s much more
subtle discrimination than what we’re seen in the past
but, nonetheless, discrimination — it’s what we
call “steering” — and it happens at many
different points in the home-buying process. It happens at
the point where African American buyers are working with realtors.
It happens at the point where they’re working with mortgage
lenders and, really, all the way through. A recent study by
the Urban Institute shows that some sort of steering happened
to about fifty percent of the African American buyers — steering
to different mortgage products, steering to different neighborhoods,
some sort of steering. So, you know, race is still an important
issue here.
Lewis:
Well, how will the community development corporations
help, I guess, solve some of these challenges? Where do they
fit in?
Rohe:
Well, first and foremost, they tend to be located in the
lower wealth communities in our State and in the country,
and they fill that void that I mentioned earlier in terms
of developing the affordable homes in these neighborhoods.
So, good CDC’s are providing affordable housing opportunities
— in many instances, both rental opportunities and home
ownership opportunities. Good CDC’s also look at community
more comprehensively, and this is a challenge, because these
organizations tend to be small. They tend to have minimal
funding and, on the one hand, they’re trying to build
housing, but they’re also looking at crime issues; they’re
looking at community condition issues, and a good CDC is not
only trying to build housing, but it’s trying to develop
the entire neighborhood, even getting into economic development,
getting people hooked up with job training opportunities,
helping people start small business. So, depending on the
CDC, they may be involved in a whole range of different neighborhood
development activities.
Rasheed:
Mitch, let me comment on that, as well. The community development
corporations, necessarily, must do those things that the private
sector just will not do, because it’s not economically
practical. The CDC must go and acquire the land. It has to
do the pre-development work to get the land ready. It takes
risks that the private sector, generally, is not willing to
take in the early stages of trying to show that there’s
viability in a given neighborhood or area. The CDC also has
to work with the individual family or the individual attempting
to buy the home. Most of the targeted individuals that we
are trying to get into housing have some kind of credit issues,
and part of the CDC’s challenge, which we find major
difficulty in getting support for is the counseling and other
work to do credit repair and to get them home-ready to purchase
a home. The non-profit is the only organization out there
that’s doing it, because anybody else want to charge
for those services and, generally, the family can’t
afford it, or if you put it on top of the transaction, then
it makes the transaction not affordable to the individual
or the family that’s attempting to buy the house. So,
the CDC plays a vital and necessary role in putting the — doing
the development, first, and getting that done at a price
that’s affordable, then, also, working with the individual
or the family to make sure that they are, in fact, credit
worthy, so that they can access both public and private resources.
Rohe:
Let me add to that, and that is there’s a lot more
attention being paid now to what’s called “post-purchase
counseling,” and Abdul talks about the importance of
helping to educate people to get into the homes, fix credit,
and truly understand what’s involved in the home buying
process. Then, now the issue is, particularly in a down economy,
particularly when you have a lot of predatory lenders knocking
on peoples’ doors, giving them deals that sound too
good to be true and — guess what. They are. A lot of
the CDCs now are getting involved in helping the people who
bought the homes keep the homes. Home ownership is not only
a place for people to live and have sort of family security,
it’s also an asset, and to really help people protect
their assets — there’s an interesting statistic
here. For the average homeowner, forty-five percent of their
wealth is in home equity, and the average homeowner's wealth
is something like ten times the average renter’s wealth.
So, home ownership is really a great way for people to build
wealth and CDCs are helping people hang onto that wealth.
Lewis:
So, does that mean that, perhaps, folks should look more
into CDCs when they’re thinking about buying a home.
Rasheed:
Well, at least, they should be aware of the work that’s
being done in their local area by community development corporations.
Certainly, we can’t address all the problems in a given
area, but I think we are one critical player, and we also
do what I like to call “take the beachfront.”
We establish and give legitimacy to the whole area of rental
or single family development in a given area, and CDCs, generally,
create a situation in an environment where the private sector
then can come in and do their thing. So, you want to be aware
of the work that’s being done by a community development
corporation in the general area, particularly as it relates
to first-time home buyers because, generally, we can work
with that individual, that family, in ways that others are
just not prepared to do in that first transaction.
Lewis:
Let’s talk about successes. Here in North Carolina,
where do you see the successes of CDCs coming into neighborhoods
and building them up and people moving into home ownership?
Rasheed:
Well, let me just say, generally, the CDC community in
North Carolina is healthy and has been while, like any other
industry, we do have some challenges and issues but, generally,
the overall community is healthy. We can look in Rocky Mount,
North Carolina, at the Rocky Mount Edgecomb CDC headed by
George Dickens, and look at some of the housing, the economic
development work that she’s done. Now, she’s done
a large industrial incubator that is providing, now, upwards
of a hundred and fifty jobs in that community, which critically
need new jobs. You can look over in Washington, North Carolina,
at Reverend David Moore and some of the work that he’s
doing in that area that has resulted both in a health clinic,
a credit union, various diversified housing for people with
special needs — persons with AIDS and handicapped, etcetera.
You can look over back west, if you will, toward Monroe and
Kannapolis and look at the great work that’s being done
by the Kannapolis CDC and Louise Mack [sp?] in helping to
respond to the Pillotex workers and all of the devastation
represented there. And what Bill mentioned, a number of the
families that that CDC had helped to gain home ownership —
their biggest challenge now is trying to help them avoid bankruptcy
and retain that asset and, hopefully, be able to keep their
quality of life intact in lieu of the devastation of the Pillotex
closing. So, there are many victories and celebrations we
can have about the good work but, admittedly, we had some
challenges, too, and I know everyone have read recently or
heard something about the unfortunate happenings in Greensboro
around one of our major CDCs which has done tremendous work
but has failed in a hard way of late, and that’s in
Greensboro.
Lewis:
Dr. Rohe, you had — I believe you were involved
in a report talking about CDCs and, perhaps, some of them
not faring so well. What are some of the factors involved
with them not doing so well?
Rohe:
Right. We broke down the factors down into what we call
“contextual factors” — those are factors
in the environment that really are not under the control of
the CDC — and then organizational factors, which are
ones that, presumably, are under control of the CDC. Just
to give you a couple of the most important contextual ones,
certainly, what happened with the local housing market. Is
there a strong demand for housing? We looked at an organization
that failed, for example, another big organization with a
million dollar budget, twenty-five person staff, that was
building a lot of housing but in a neighborhood where the
market just really got soft. They rehabbed the housing. They
couldn’t sell it. They had rental housing. They couldn’t
keep those units occupied, and it brought the organization
down. So, what happens in the local housing market, obviously,
is beyond the control of the CDC but can really affect the
viability of a CDC. Another issue is City policy. We found
cities changing policies mid-stream, and those changes in
policies causing these CDCs to, all of a sudden, not have
their normal stream of revenue. Cities that were supportive
of rental housing and CDCs using tax credit mechanisms to
produce rental housing, only to find that next year, the city
says, “No, we don’t want any more rental housing.
We want all home ownership.” — and the CDC really
not being able to make money and support their staff with
that sort of activity. And then, again, the issue of the number
of CDCs. In many of these communities we looked at, there
were, frankly, too many, and the funders said, “We’re
not funding them all.” You know, “We’re
cutting back.” And some of the CDCs then went out of
business, so those are some of the major contextual issues.
Internally, Abdul mentioned a couple of these, already. Clearly,
the staff capacity of the CDCs is critical. Many CDCs have
a hard time recruiting and holding good staff people, frankly,
because they don’t pay enough. CDCs can act as kind
of training grounds for professionals to go on to work for
the City, to go on to work for other development — maybe
private development companies — because the Boards of
the CDCs sometimes don’t understand that you have to
pay competitive wages even though you’re doing, sort
of, “God’s work,” if you will. You know,
people can’t take that to the grocery store, and they’re
going to go with the better salary, and they have to hold
on. Additional training opportunities — there are great
training opportunities out there for staff, but many CDCs
don’t have the resources or the time to go and avail
themselves of those training opportunities. Another major
one has to do with community support. Some CDCs, they lose
community support. They lose touch with their local communities.
We looked at an organization in Minneapolis, for example,
where they were really focusing in on affordable housing,
affordable rental housing, and it turns out that the neighborhood
or, at least, some elements in the neighborhood, the powerful
elements in the neighborhood, decided that they didn’t
think they needed any more affordable housing, that they wanted
more market-rate housing. They wanted programs to help the
homeowners, so what happened is, losing the community support,
they lost political support, and the money started to be taken
away from the organization so, clearly, maintaining good ties
to the community, good communication with the community, is
important for the sustainability of CDCs.
Lewis:
And my final question, because we’re getting close
here — from the both of you, in a nutshell, what
would you advise people to do, especially if they are wanting
to get into affordable housing. What suggestion would you
have for them in order to be able for them to get into ownership?
Mr. Rasheed?
Rasheed:
You’re talking about the individual family.
Lewis:
Yes.
Rasheed:
Well, again, I would suggest that, one, they clearly look
at their own personal situation and their readiness for home
ownership, and that being that they have to, one, clean up
their credit situation and make sure that they can qualify.
And, then, secondly, they have to be prepared to make some
investment in that home themselves, so they’ve got to
save up some resources, control their debt, and then look
for the best opportunity that they can manage long term, that
fits within their own economic situation.
Lewis:
Dr. Rohe.
Rohe:
There are a lot — as we talked about earlier —
home ownership training programs, pretty much, I dare say,
almost every community, large community, certainly, in North
Carolina, has some non-profit organization — like Durham
Affordable Housing Coalition does it for Durham — that
provides home ownership training classes. They usually run
somewhere around eight to ten hours, and they tell you, basically,
everything you need to know. Usually, there’s some follow-up
work where they’ll bring you in and work one-on-one
if you have a credit problem. You know, they can help you
pre-qualify to figure out how much of a house you can afford.
So, definitely, contact one of those — your local homeownership
education program — and take the course.
Lewis:
Gentlemen, thank you so very much for your input, and it was
very informative. I’d like to thank Mr. Abdul Rasheed
and Dr. Bill Rohe for talking with us about the effectiveness
of community development corporations. Now, if you’d
like to learn more about our topic tonight or about the work
of our two guests, please visit our Black Issues Forum website
at www.unctv.org/bif. We would also like to hear
your feedback and suggestions, so send us an email, or you
can call the BIF line at 919-549-7167. Be sure to join us
every Friday night at nine-thirty for Black Issues Forum.
I’m Mitchell Lewis. Goodnight.
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Voiceover:
This program was made possible by contributions to UNC-TV
from viewers lie you. Thank you.
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