From Devastation to Urban Rebirth : A rare coalition will boost affordable housing in 23 cities
In South-Central Los Angeles, the Bronx and other similarly poor urban communities, nonprofit developers doggedly rebuild. Against seemingly impossible odds, these groups of activist citizens rejuvenate devastated areas. Their successful track records have prompted a promising and unusual partnership of foundations, corporations and the federal government that will invest a stunning $87.6 million to create affordable housing in 23 cities. Los Angeles, fortunately, made the list.
THE VISION: The expanded National Community Development Initiative, the vision of Peter C. Goldmark Jr., president of the Rockefeller Foundation, boasts corporate heavyweights such as the Prudential Insurance Co. of America, which put in $15.1 million, and J. P. Morgan & Co., which invested $12 million. Rockefeller donated $15 million and the John D. and Catherine T. MacArthur Foundation added $6 million. Others also contributed. The beauty of this partnership is that it allows community developers to access financing from the global markets. That’s a remarkable connection for urban groups that often have had trouble borrowing a few dollars from the local bank.
At President Clinton’s request, Congress put up $20 million for participation by the Department of Housing and Urban Development. HUD Secretary Henry G. Cisneros, who sees this ambitious effort as a means to direct more private money into low-rent housing, eagerly courts public-private partnerships. These creative partnerships are the new building blocks of affordable housing.
The money will be funneled to community developers by two experienced affordable housing advocates--the Enterprise Foundation of Maryland and the national Local Initiative Support Corp. For years they have helped nonprofit developers capitalize on investments generated by the affordable housing tax credit and have taken the lead on low-income housing and community development projects across the nation. Both provide technical expertise to citizens-turn-builders, and a layer of protection for the investors.
THE SUCCESSES: There is really little risk involved, however, in dealing with most experienced community developers. Projects like the successful Nehemiah program in Brooklyn have put homeownership within reach of low-income families. Los Angeles, though slow to get in on this trend, can count successes by community developers on Skid Row, in Watts and in the Pico-Union neighborhood, among others. These projects work because the developers run a tight ship. They screen tenants, require timely rent payments and otherwise manage competently. Now, a cadre of experienced activists are ready to take their skills to a higher level. They need money, and lots of it, but they can no longer count solely on the federal government.
Few for-profit developers would clamor to build in neighborhoods synonymous with slums unless they could get generous government incentives. In the heyday of urban renewal 30 years ago, HUD provided grants, low-interest loans and other fiscal encouragement. Funding from HUD began drying up during the Reagan and Bush administrations. Shifting priorities and a HUD scandal that allowed politically connected “consultants” to skim off huge fees for little work decimated the construction programs.
This new partnership won’t provide housing for everyone who needs it. But thanks to groups such as the Local Initiative Support Corp., there finally is greater incentive to rebuild troubled communities.
