Rochester, NY, group works to keep city from going the way of Detroit

When the news first broke that the city of Detroit had filed for bankruptcy, Kim Brumber, CEO of NeighborWorks Rochester, shuddered. Rochester, NY, may not be Detroit, but there are some parallels that hit very close to home.

“Like Detroit, a core of industrial giants fueled Rochester’s early growth,” recalls Brumber, a longtime resident of the area. “For Detroit, it was the Big Three automakers. For Rochester, it was Xerox, Kodak and (just in August) Bausch & Lomb.  And just as the declining competitiveness of the auto industry was a trigger of Detroit’s economic downfall, Rochester experienced its own spiral when one by one, our big employers downsized or left the scene.”

Brumber believes the days of “mega-employers” are over, and that smaller-scale entrepreneurship is what will eventually revitalize Rochester as well as other cities like Detroit. That takes, time, however, and NeighborWorks Rochester is focused on doing its part to prevent the population flight witnessed by its larger counterpart. A key element in that struggle is making sure that residents are able to stay in or access safe, quality, affordable housing.

The family who lives in this house was unable
to pay to keep their home in good repair.

With the help of NeighborWorks
Rochester, the home is now transformed.

“People just don’t have the equity in their homes anymore to spend what it takes to keep them in good condition,” explains Brumber. “Our approach is to make it financially feasible for residents to maintain their houses, and recently, we began offering help with energy-efficiency improvements that reduce their energy costs as well. Much of the housing stock here is very old, so the energy costs are high. We can often save them $100 a month – that’s $1,200 a year, which is significant for the people who live here.”

Over the years, NeighborWorks Rochester has adjusted its philosophy and services to match the changing nature of the city’s needs. The nonprofit was one of the original NeighborWorks organizations, focusing on rehab loans at a time when redlining in the largely African-American communities resulted in disinvestment. Gradually, the organization expanded its scope and services -- including a new focus on neighborhood stabilization and marketing.

“The traditional model for neighborhood re-investment is to demolish drug houses, etc. in the most blighted neighborhoods, thinking that change would follow. But this strategy doesn't work in cities that have a soft real estate market," says Brumber. "We've learned that turning neighborhoods around requires a market-based approach that draws in private investment of time and resources -- ideally before they start to rapidly decline, the typical time to intervene.” 

Through its Healthy Blocks initiative, NeighborWorks Rochester

targets neighborhoods that are showing signs of social and economic disinvestment, but where residents are still trying to tread water. Through a combination of neighborhood “branding,” social gatherings and community-wide improvement activities, residents are encouraged and supported in their efforts to maintain the value of their property and nurture a sense of “belonging” that attracts and retains homeowners. For example, NeighborWorks Rochester partnered with the Realtors Charitable Foundation (an arm of the Greater Rochester Association of Realtors), the city’s police department, local businesses and others to energize the neighborhood called The Pocket. Monthly resident meetings are held in an area recreation center, and spring/fall clean-ups, ice cream socials and leadership workshops are among the results. An overgrown, vacant lot was transformed into the Emmighausen Garden, which produces an array of flowers and vegetables. Since 2008, sales prices in the neighborhood have increased 20 percent per square foot. What’s up next? A new logo soon will appear on street banners and crosswalks will feature “BoulevArt.”

In 2012, NeighborWorks Rochester reported re-investing $4 million into the city’s neighborhoods. The organization trained 365 individuals in how to be smart homeowners, helped 64 families become new homebuyers,  conducted 97 tests for lead in older homes and distributed 82 home-improvement loans and grants, totaling $1.2 million.

In a recent article in the Rochester City newspaper, a member of the editorial team wrote, “What the Greater Rochester community does will determine whether we’ll survive the impact of the changes in our own major industries, our suburban sprawl, our racial isolation. Rochester hasn’t reached Detroit’s depths yet. Maybe we never will. But the warning signs are there.”

NeighborWorks Rochester is among the mainstay organizations working to make sure the city never will.

Early funding is worth its weight in gold

Eileen Fitzgerald,
CEO,
NeighborWorks America

(By Eileen Fitzgerald, CEO, NeighborWorks America) Developing affordable rental housing these days is a lot like putting together a puzzle – when the financing pieces are all in place, a thing of beauty results, but when there’s a piece missing for the puzzle (or in this case, a piece missing from the finance package for rental housing) the project just doesn't work. The result is fewer new affordable rental homes developed and more existing rental homes transitioning into market rate housing or being demolished. The bottom line: Families who need affordable rental housing may have a lot harder time securing the homes that they need.

Getting all of the financing pieces for affordable housing is difficult because nonprofit developers usually have to tap multiple sources of capital, either from one or more private sector banks, or from local or federal government sources such as community development block grants or state housing finance agency money. Essentially, nonprofits have to find all of the pieces to make an affordable rental housing project work.

However, often the private and public sources of financing needed to piece together an affordable rental deal want to see the developer have equity or “skin in the game” before they make the loan or approve the government financing.

That’s tough to do because even large nonprofit owners and developers of rental housing operate at very thin margins on existing projects that leave little room for the accumulation of excess capital to deploy to new projects.

This is why NeighborWorks America has been a long-time proponent of grant makers finding ways to make operating level or flexible funding available. After working with nonprofit rental housing developers for many years, NeighborWorks America knows that a nonprofit developer that has obtained general operating support and flexible money for qualified project on the books or in the planning stages has a leg up on securing other money to get the project done.

Rick Goodemann, chief executive officer of Southwest Minnesota Housing Partnership based in Slayton, Minn, and the owner and developer of nearly 900 affordable rental homes explained the value of early capital this way: “Patient, flexible capital, though limited, is available through such sources as foundations, financial institutions and housing finance agencies. Capital of that nature is extremely valuable and absolutely essential in supporting early feasibility analysis, due diligence activities, and securing real property. But it's most valuable when used to leverage debt, attract investors and provide a level of development and operational risk mitigation.”

Providing nonprofit developers with early funding that they could show other financial supporters is a core community development strategy at NeighborWorks America.  Nonprofits that could tap flexible capital from other sources such as national or community foundations, community development financial institutions (CDFIs) or state housing finance agencies enhances the ability of the organization to move quickly and build new or sustain existing affordable rental housing.

For example, in July of this year, the Massachusetts Housing Finance Agency provided just this kind of capital. Mark Dinaburg, the director of real estate development for nonprofit owner Codman Square Neighborhood Development Corp. said to a local newspaper, “With their help, we have finally been able to refinance and rehabilitate this 80-unit BHP-1 property. Previous to this, we had made multiple efforts to bring together an adequate financing package, while the properties slowly decayed, physically, socially, and financially. Indeed, the entire portfolio was threatened with foreclosure in the dark days of 2009. MassHousing’s willingness to step up with bridge financing, and to participate in a permanent financing package, was key to turning this around.”

Codman Square received more than $200,000 from NeighborWorks America to use as early, flexible capital for its rehab project that helped it secure state HFA funding.

Whether flexible funding helps to hire a development manager, an architect or exists as an early investment that attracts larger supporters, organizations that are able to secure this kind of financing have the best chance of getting a new affordable rental project done or to sustain an existing one.

NeighborWorks America encourages all of the potential sources of early, flexible and first-loss capital to be earlier participants in affordable housing deals. These sources of capital have to be the ones to take the first steps and jump-start affordable rental housing. Without their increased participation, too many deals that could be put together, won’t be completed, leaving some families by themselves to piece together their own affordable housing solutions.

Reposted from Rooflines, the Shelterforce blog.

NY organization helps families ‘fill the gaps’ when other assistance stops

When a tornado, hurricane or other disaster strikes, there is typically a rush of media attention and emergency assistance. But then, the spotlight shifts and families are left to struggle to fill the “gaps” that remain, on their own.

That’s what happened when Tropical Storm Irene hit the Eastern Coast on Aug. 29, 2011, and flood waters poured out of the Adirondack Mountains through the tiny town of Keene, in northern New York. The area was declared a disaster zone, and even after federal funds and private donations poured in, many families and businesses were still fighting to “stay afloat” months later. Fortunately, Housing Assistance Program of Essex County (HAPEC), which is celebrating its 10th year as a member of the NeighborWorks network, considers filling gaps to be its core mission.

Consider the story of Russ and Angie. The flood waters seriously damaged the stone foundation and first floor of the front section of their modest home, and the back addition with the bedrooms for their two preschool-aged children was destroyed.

The family of four moved temporarily onto the grounds of a local summer camp, while they began repairs using funds from FEMA (Federal Emergency Management Agency), community donations and their own retirement savings. However, although they were able to move back into their home in March of 2012, they didn’t have enough money to rebuild their children’s bedrooms, forcing the family to “double-up” in cramped quarters. Government assistance had dried up, and “donor fatigue” had set in, even among their friends. “Our family is at the end of our rope emotionally,” Russ wrote in one email to HAPEC, describing their plight.

A team from Habitat for Humanity joined HAPEC to help
re-build the family home of Russ and Angie.

That’s when HAPEC stepped in. With the help of a NeighborWorks America emergency-assistance grant, the organization helped the family pay off its outstanding loans, prepped the site for the re-build and recruited a Habitat for Humanity team to construct the new shell. Russ and Angie finished the walls and flooring. The finishing touch, again provided by HAPEC, was a wood-pellet stove for heating.

“Given what they had been through, and the exhaustion of their personal savings, Russ and Angie would not have been able to complete this work on their own for quite some time,” says Bruce Misarski, community development director for HAPEC. “Now, their house is ‘whole’ again, and they have bedrooms for their kids.”

HAPEC was founded in 1976 as the first local organization qualified to receive and administer HUD Section 8 rental assistance, which had just been authorized by Congress two years before. Today, HAPEC defines its focus much more broadly: to “alleviate economic distress, enhance personal dignity and cultivate self-reliance” in a rural county where employment mostly depends on low-wage, seasonal tourism and the household median income is 18 percent below the national average.

HAPEC services range from assistance with homebuyer education, to home repairs, to partnerships for the development of affordable multi-family housing. An impact assessment conducted for HAPEC and published in 2011 found that in one year, the organization:

• Created nearly 92 jobs – one of every 200 jobs in Essex County alone.
• Assisted 35 families in purchasing their first home.
• Helped 57 homeowners rehab their existing houses.
• Issued 650 rental-assistance vouchers.
• Managed 25 apartments for senior citizens.
• Provided foreclosure counseling for 44 families.

Alan Hipps, executive director, points to two keys that are instrumental to his organization’s success: effective fundraising – more than $2.5 million a year – and creative partnerships with other institutions, such as Habitat for Humanity and NeighborWorks America. “Our mission is simple, but ambitious: We strive to recognize community development and housing needs, advocate change and respond to opportunities.”

From parks to circuses: Oklahoma NeighborWorks group goes ‘out of the box’ to fight poverty

If there is a common challenge that afflicts all nonprofits, no matter  their scope of work, it’s finding a way to fund everything they want to do – especially infrastructure needs like staffing and space. The Little Dixie Community Action Agency, which proudly labels itself a “survivor” 45 years after its founding, has found a creative way to become more self-reliant:  managing parks for the State of Oklahoma.

“We bring in about half a million dollars from user fees every year,“ proudly explains Becky Reynolds, associate director. “At the same time, we’re saving money for the state government, creating additional opportunities for training and employment, and preserving camping, boating and other recreational activities for residents.”

Little Dixie first experimented with park management in the 1970s, when it was asked to manage the group camping area that served as the “home” for one of its youth programs. But it wasn’t until 1997 that park management became a planned strategy.

With a magnificent water view on three sides,
cabin #16 is a favorite at Hugo Lake State Park.

Expert at finding and qualifying for grant assistance, Little Dixie received funding via the Empowerment Zones and Enterprise Communities Act of 1993 to draft a 10-year strategic plan for the three counties in its service area. During the resident dialogues that followed, community members vented their anger over the planned closing of two parks that generated tourism income as well as offering much-needed “green respite” through a marina, hiking trails, rental cabins and more. Little Dixie came to the rescue. Today, they are among four state parks managed by the agency.


Thinking out of the box makes Little Dixie 'go-to' agency
 
This “out-of-the-box” approach to generating income and providing service is why the federal Department of Health and Human Services (HHS)  has relied on Little Dixie to provide technical assistance to other rural community action agencies in 11 states – well beyond its “home zone.”  Little Dixie is one of 10 affiliates in the NeighborWorks network to receive a Community Service Block Grant (CSBG) from the HHS, a program created as part of Lyndon B. Johnson’s War on Poverty to increase self-sufficiency, improve living conditions and promote community pride in low-income regions.

“We’ve been a CSBG agency since 1972, and that means we focus on giving a “hand up” instead of just a “hand out,” explains Reynolds. For example, each of the families who transition to homeownership through the agency’s Self-Help Housing Program join with their friends, family and neighbors (usually a team of four to 10) to build their new home – what Little Dixie calls “building sweat equity.” The agency staff provides homeownership training, assists families with their loan applications to USDA Rural Development, secures sites for home construction and subcontracts skilled work such as plumbing and electricity. It’s a little like the Habitat for Humanity model, but with a lot more support built in.

Overcoming chronic unemployment by focusing on town's 'curb appeal'

With Little Dixie’s three primary counties ranked first, third and seventh in the state in terms of unemployment, one of the agency’s other significant challenges is working to support job creation, including nurturing a nascent tourist industry.

“We like to say that southeast Oklahoma is one of the best-kept secrets in the country,” laughs Reynolds. “Most people hear Oklahoma and they think of the desolate panhandle. But this part of the state is very beautiful, with lots of pine trees, lakes and rivers. People from Arkansas to Texas come here to hunt, tour the trails with four-wheelers or just relax in a luxury cabin.”

Through Little Dixie’s Small Business Loan Fund, it is helping residents nurture this growing source of revenue, as well as more unusual ventures – such as the renovation of an abandoned building for a circus museum and training gym for novice performers. Since 1937, as many as 22 circuses have called Hugo, Oklahoma, home during the winter – including three that currently tour the country during the warmer months. Performers who have long since stopped touring are buried in their own section of the town cemetery, called “Showmen’s Rest.”

A low-interest loan of $80,000 from Little Dixie is helping that dream become reality – and in the process bringing visitors into town and putting residents to work.

Vermont quarry closing brings economy down; NeighborWorks affiliate rallies residents

It’s a story that’s been repeated across America: What builds a town up is also what, eventually, brings it down. In Detroit, it was the auto industry. In West Rutland, Vermont, it was marble quarrying.

When high-quality marble deposits were discovered in the 1830s – followed by the extension of the railroad into town – Rutland was suddenly put on the map. The simultaneous decline of the famous quarries of Carrara in Tuscany, Italy, transformed it into one of the leading marble producers in the world. (The name of the main “drag”? “Marble Street,” of course.)

The double-whammy of a large strike in the 1930s and the Great Depression, however, took a toll from which the town never quite recovered. In 1986 the quarry was forced to close, plunging the outwardly idyllic enclave of “cows and jeans” into economic decline.

West Rutland today

“At its height, the quarry alone employed 2,400 people,” recalls Ludy Biddle, executive director of NeighborWorks of Western Vermont. “Now, there are only about 2,500 people living in the entire town and the county is the second-poorest in the state. For all social measures, it’s in the red – poverty, unemployment, teen pregnancies and, recently, foreclosures.”

Another recurring theme in America, however, is the recovery from adversity that’s possible when residents come together in response to crisis. The disastrous year of 1986 also is when the organization was founded by a group of local citizens to help the remaining residents stay in their homes by keeping them in good repair.  By the 1990s, the area serviced by NeighborWorks of Western Vermont had expanded from four neighborhoods to the entire county and a homeownership program was added to help both first-time buyers and a trickle of newcomers – primarily artists and families looking for a semi-rural lifestyle.

This year, the organization is celebrating its 10th anniversary as a chartered member of the NeighborWorks Rural Initiative, which strengthens communities with small populations by helping them integrate into their regional economies. It now serves three counties, not only with its original rehab assistance and homeownership counseling, but also with “financial fitness” coaching and foreclosure prevention. In 2012:

• Two foreclosed houses were purchased by the organization; rehab was begun on another five, with two completed and put on the market.
• 24 individuals graduated from the homebuyer education program and another 25 completed the organization’s financial-fitness training.
• Thirty-seven families successfully negotiated foreclosure alternatives with their mortgage lenders. Another 12 received coaching as they made the decision to opt for a reverse mortgage.
• Nearly $800,000 in loans was dispensed to pay for 40 home repairs.

Joan Jackson

Biddle is particularly proud of her organization's participation in the NeighborWorks Green Organization. In fact, in 2010, it was awarded a $4.5 million grant from the Department of Energy for its H.E.A.T. squad (Home Efficiency Assistance Team) – which now boasts the highest penetration rate in the country among similar programs.

Joan Jackson, a retired librarian who has lived in her Wallingford home since 1959, is just one example of the 577 households that received an “energy check-up” in 2012, thanks to the program. Her roof had been damaged by winter ice, the house was so cold she was constantly bundling up to stay warm and the increasing cost of fuel was a persistent worry due to her fixed income. But with the installation of insulation in her basement and upstairs walls, along with air sealing around her doors, ceiling and attic hatch, she is warmer and her fuel bills are 34 percent lower. (Watch a video interview with Biddle, as she explains just how the program works.)

“Twenty-five percent of the people we’ve been able to help with our H.E.A.T. squad are below 80 percent of the area’s median income – individuals who usually aren’t able to participate in programs like this, even though they need it the most,” says Biddle, adding that the organization is now looking for additional funds as the DOE grant sunsets. “The average household we serve spends 3-8 percent of their already-low income on energy. With H.E.A.T, they save an average of 386 gallons of fuel a year – about $1,500 a year. It’s central to our mission to make homeownership affordable.”