Good News!

From Boston to San Francisco the community-based housing movement is transforming bad neighborhoods

James Lee Court Courtyard
The courtyard of James Lee Court, in Oakland, a development for the homeless

IN 1983 the makers of The Day After, a made-for-television movie about the aftermath of a nuclear holocaust, filmed part of their drama in an inner-city neighborhood in Kansas City whose forlorn, rubble-strewn landscape seemed the perfect image of a fictional ground zero. Today that same site is a development that includes 300 units of low- and moderate-income housing, three shopping centers, and a library. No new government program brought about this remarkable transformation; rather, a private local nonprofit organization, the Community Development Corporation of Kansas City, took the initiative.

The revival of this once-forsaken piece of Kansas City real estate is part of a little-celebrated but widespread campaign by community and nonprofit organizations to build low-income housing and revitalize inner-city neighborhoods across the United States. Unlike conventional government housing programs, the new housing movement is based in the communities it seeks to help, relies as much on private as on public funding, and produces homes that could be mistaken for upscale condos. It aims to engage the poor in improving their own lives. In an era of hostility to government the community-based approach to housing has wide political appeal. Along with Senator Carol Moseley-Braun, of Illinois, and other liberal Democrats, such staunch Republicans as Senator Kit Bond, of Missouri; Congressman Rick Lazio, of New York; and even Governor Kirk Fordice, of Mississippi, a rock-ribbed Reagan conservative, have publicly endorsed the community-based housing movement. Yet, strangely, it has eluded public awareness. It is making a visible impact on low-income neighborhoods all over the country, but the question remains whether it can survive, much less conquer the monumental problems of the inner city.

The movement originated in the 1960s but first took root in the 1970s, when job and population flight, disinvestment, arson, drugs, crime, and disease were ravaging many urban neighborhoods. As these destructive forces spread to large urban public-housing projects, Charles Murray and other conservatives concluded that government social programs had actually caused the chaos. In the early 1980s the federal government, under President Ronald Reagan, began slashing the funds available for subsidized housing.

Today the federal government has all but ceased to build low-income housing, and just last year President Bill Clinton signed a bill that stopped granting rent subsidies to new applicants. Meanwhile, rising housing costs take ever larger bites of the limited wages of the working poor: by 1993 one fifth of the nation's unsubsidized renters paid half or more of their income for shelter. In this grim context new initiatives in the housing field have become crucial.

In response to the federal retreat from housing, groups of private citizens set out to create islands of safety and comfort in some of the toughest slums in the country. There are now about 4,000 local housing organizations in the United States. Since 1988 they have developed more than 20,000 homes a year for low-income Americans. In 1994 community-based groups built approximately 40,000 units -- equivalent to the rates of production achieved by the government during the heyday of public housing.

The organizations that produce and manage low-income housing differ markedly from the rigid centralized bureaucracies that run most government housing programs. Community-development corporations, which are chartered nonprofit associations, figure prominently among the producers of low-income housing. CDCs were first created in the 1960s, to encourage business activity in inner-city ghettos, but the vast majority concentrate on housing.

Unlike public housing, community-based housing exists in the private market; its developers must at least break even in order to survive and carry out their ambitious agendas. Thus they seek both public and private sources of funding. In collaborative meetings -- or, occasionally, in dramatic confrontations -- local housing groups wheedle loans, grants, and free land and utilities from city, state, and federal officials.

Special kinds of nonprofit organizations, known as intermediaries, raise private funds and funnel them to hundreds of local housing and community developers across the United States. By acting as a combination of broker, credit-rating service, and rich uncle, two large intermediaries have emerged as powerhouses in the movement. The Local Initiatives Support Corporation, or LISC, was started by the Ford Foundation as a permanent institution for helping distressed neighborhoods. James Rouse's Enterprise Foundation, one of the foremost national housing organizations, founded by the head of the Rouse Company, an innovative development company, was designed to give the housing movement economy of scale. Each organization maintains a national headquarters and multiple branch offices and raises millions of dollars each year from foundations and corporate donors. (Also, the Neighborhood Reinvestment Corporation, created by Congress as a public nonprofit corporation, maintains an extensive network of local housing organizations.)

Both LISC and Enterprise create pools of housing-project deals that they offer to philanthropists and investors; the intermediaries then monitor the community groups responsible for the projects to ensure that they perform as promised. One reason that LISC and Enterprise can persuade businesses to provide capital to small community organizations is that low-income housing is, generally, profitable. With the help of tax benefits, especially the Federal Low Income Housing Tax Credit (which housing developers earn and then sell to investors), investments yield an average annual return of about 16 percent over fifteen years. Attracted by such earnings, hard-nosed business investors, including Warren Buffett, the celebrated financier, have plunged into housing for the poor.

Some critics dislike all the high finance and charge that community-based housing is simply a money racket. Old-style champions of public housing and direct housing subsidies object to the syndication of tax credits and other development deals, because the transaction costs benefit lawyers and accountants. Yet in a climate of government reductions and budget cutbacks a housing system under the direct control of public or semi-public agencies is simply not a viable alternative. The days of well-funded centralized programs are not about to return anytime soon.

In fact the combination of self-sufficiency, good management, local control, and profitability gives the private-public approach to low-income housing a powerful political appeal that government housing programs never had. Wooed by LISC and Enterprise, executives of the Weyerhaeuser Company, Hallmark Cards, Bank of America, and other corporations have become ardent supporters of the housing movement.

THE best-known nonprofit housing organization is Habitat for Humanity. Founded by Millard Fuller, a devout former businessman, in 1976, to witness the Christian gospel by building simple but adequate housing for the poor, and often associated with Jimmy Carter, who is probably its most famous supporter, Habitat organizes volunteers to help low-income people literally build houses for themselves. Critics dismiss Habitat as insignificant, on the grounds that its local chapters are highly decentralized and build only a few houses at a time. But it has some 1,300 local chapters in the United States, and volunteer work on Habitat projects is increasingly popular, especially among Protestant congregations. Thus Habitat for Humanity regularly ranks as one of the largest homebuilders in the United States.

Habitat is national -- indeed, international -- in scope, but regional housing organizations, working on their own or with community groups, also develop impressive amounts of low-income housing. Started in Boston at the dawn of the housing movement, The Community Builders has in the past thirty-three years developed more than 8,300 units of low- and moderate-income housing. It currently manages 4,445 units in the northeastern United States, and has about 4,000 more units on the way. In the San Francisco Bay area BRIDGE Housing Corporation has helped to produce about 7,000 units throughout California over the past thirteen years. The New York City Housing Partnership, founded in 1982 by David Rockefeller, has worked with private capital and the state and city governments to build 13,000 new homes in fifty low-income communities throughout the five boroughs of New York City.

The movement has drawn in organizations whose original purpose was other than housing. In the sprawling inner-city district made famous by the Rodney King riots, Concerned Citizens of South Central Los Angeles was started in 1985 to fight the construction of a giant waste incinerator, but it has since developed and now manages more than a hundred units of low-income housing. The primary and still radical goal of the Industrial Areas Foundation, founded by the late Saul Alinsky, is to organize disenfranchised people so that they can seize power for themselves; yet the powerful coalitions of church and community organizations that the IAF has launched also build homes for low-income citizens in cities such as New York and Baltimore.

Even commercial firms, albeit socially committed ones, build low-income housing: McCormack Baron & Associates, of St. Louis, a leader among for-profit residential builders in urban areas, works on large-scale redevelopment projects across the country. Telesis Corporation, of Washington, D.C., is administering court-ordered low-income housing developments in Dallas and Yonkers among its other projects.

TWO ironclad rules influence the appearance of the new housing. First, the architecture must not look anything like the uniform barracks and high-rise slabs of conventional public-housing projects. Second, the buildings must be well maintained: managers take pride in making quick repairs, and no graffiti are allowed to mar the walls. Several of the housing groups hire neighborhood youths as guards and maintenance men to ensure that their property is not vandalized.

Although cost constraints and the desire to make low-income housing look inconspicuous give many projects a bland appearance, architects have also produced stylish buildings that could easily be mistaken for upmarket residential developments. David Baker has designed two striking low- and moderate-income condominium projects in San Francisco for BRIDGE: Parkview Commons, hillside apartments with Mediterranean clay-tile roofs; and Holloway Terrace, two-story houses with sculptured white-stucco walls. Working in Boston, Goody, Clancy & Associates used traditional Boston brick and tall bay windows to make Langham Court, a mixed-income project, fit into the Victorian South End neighborhood.

Perhaps the best-known architect specializing in low-income housing is Michael Pyatok, of Oakland, California, who despite small budgets manages to create comfortable living spaces, safe and inviting interior courts, and attractive exteriors composed of bays and trellises. His work ranges from James Lee Court, an apartment block with earth-colored stucco walls decorated with colorful African patterns, which houses twenty-six formerly homeless families in Oakland, to what he mockingly calls a "Ralph Lauren-style" suburban development for mixed incomes in Bellevue, Washington, which looks for all the world like an exclusive subdivision.

Always struggling with zoning restrictions and the fears of suburbanites, Pyatok has learned to be clever. In the face of a requirement that each unit have two parking spaces (although the families could afford one car at most), Pyatok persuaded a zoning board to allow the extra parking spaces to be used as a basketball court. To lend a reassuring single-family image to a low-income multi-family project, he resorted to picket fences, individual entries, and chimney-like cupolas that hid telltale bunches of ventilation pipes.

NEIGHBORS aside, the primary goal is to give poor people themselves a sense of pride and a stake in the community. To do so, many housing groups promote homeownership. In Michigan, for example, Kalamazoo Neighborhood Housing Services coordinates second-mortgage lending programs with down payments as low as $1,000, offers home-rehabilitation loans, and gives classes to first-time homeowners in budgeting and repairs.

Other groups, among them The Resurrection Project, in the Pilsen neighborhood of Chicago, build and sell one- and two-family houses. Suburban ranch houses have begun to appear in low-income urban neighborhoods, thanks to Habitat for Humanity, which builds a basic version, and to the Mid-Bronx Desperadoes (officially, MBD Community Housing Corporation), which sponsored the construction of classic ranches on Charlotte Street, where both Jimmy Carter and Ronald Reagan stopped to view the desolation of the South Bronx.

Most housing groups build and sell only a few houses at a time, but East Brooklyn Congregations, a federation of churches organized by the Industrial Areas Foundation, has taken a radically different approach. It pioneered the Nehemiah Plan in the East New York and Brownsville sections of Brooklyn. Named by Johnny Ray Youngblood, a Brooklyn minister, after the Old Testament prophet who rebuilt Jerusalem, the Nehemiah Plan aims to construct and sell very inexpensive homes en masse to the working poor, thus literally building an entire community of homeowners. Since 1982 East Brooklyn Congregations has constructed and sold about 2,150 two-story single-family row houses; another 1,250 are in the works.

As a result, an urban Levittown now flourishes in what was one of the poorest and most troubled parts of New York City. The homeowners -- church members, former public-housing tenants, and longtime neighborhood residents -- scrupulously maintain their property. A visitor cannot help being struck by the contrast between the Nehemiah houses -- whose owners have adorned them with doves, lions, and other front-gate statuary, manicured front lawns, and rooftop satellite dishes -- and the anonymous graffiti-scarred high-rise public-housing projects in an adjoining district.

Some housing advocates slight the Nehemiah Plan for taking a no-frills approach and creating a low population density in an urban area, but the real-estate market reflects the popular judgment on the plan and its neighborhoods: row houses that originally sold for $39,000 to $62,000 are now valued at $125,000.

Despite their different approaches, the developers of low-income housing share certain basic assumptions. They fervently believe that their organizations must be run as competent business enterprises, that their housing developments should encourage self-sufficiency and self-improvement among the low-income residents, and that local control is the key to their success.

STILL, despite this record of success, the question remains whether the movement can do more than make a dent in a daunting problem. Skeptics scoff at the notion that it can solve the rampant problems of the inner city any more than the government's War on Poverty could during the 1960s. Even people within the movement complain that some narrowly focused or poorly organized CDCs take years to build a few units of housing and then do little else. The funding process is complex and time-consuming: whereas commercial developers generally obtain financing from one or two lenders, community-based developers may need the participation of a dozen sources, each with different criteria for approval. And because of its grassroots nature, the movement has spread unevenly. It has yet to reach some smaller cities and parts of the South and Midwest.

People at LISC and Enterprise have responded by training community leaders in management and planning in order to "build capacity" in local organizations. There are signs of progress: the number of housing groups that have each produced more than a hundred units is climbing. If funders would adopt uniform application forms for loans and grants, the housing movement could streamline funding. Above all, housing advocates must protect the Low Income Housing Tax Credit, federal block grants, and other financial sources, which are the lifeblood of so many housing developments.

Pessimists overlook the role that community-based housing groups can play in helping to revive inner-city neighborhoods as stable working-class districts. Having lost population and buildings, inner-city neighborhoods are ripe for redevelopment. Left to themselves, they will continue to deteriorate or else gentrify as real-estate developers move in to make a killing. However, upwardly mobile African-Americans and immigrants who live in or adjacent to depressed neighborhoods contribute stability and economic resources to the inner city. Most important, the movement is able to tap the strong desire of many poor people to overcome the problems of poverty and improve their lot in life. Wherever it has advanced, the sense of hope and optimism is almost palpable.

In the South Bronx, once an international symbol of urban crime and devastation, a concerted rebuilding campaign by dozens of housing and community groups and the city government has created vital neighborhoods completely at odds with images of despair. On 165th Street stands a grand old apartment building renovated two years ago by the Morrisania Revitalization Corporation and renamed Jacquline Denise Davis Court. Today it houses people with very low incomes; about a third of the residents were homeless prior to moving in.

Despite their poverty, the occupants of this building are engaged in community life as never before. The tenant association runs its own building patrol and, from a table in the brightly restored foyer, checks everyone who enters the front door. The tenants hold bake sales and throw building parties on holidays. They organized a successful phone-and-mail campaign to persuade the transit authority to restore bus service in front of the building after a ten-year hiatus.

Places like Jacquline Denise Davis Court are sprouting up all over the country. Although often unheralded, these small triumphs are the most powerful argument for community-based housing. There is new life at the ground zeroes of urban America.

Photograph by Glenna Lang

The Atlantic Monthly; January 1997; Good News!; Volume 279, No. 1; pages 31 - 35.