Community development corporations (CDCs) are struggling to find solutions to Memphis' growing housing and neighborhood crises.
by Phil Campbell
milestone
was reached in Memphis two months ago. For the first time in anyone's memory,
organizations showed up at a city council meeting to argue over who should
be recognized as legitimate developers of the inner city.
The city was giving 29 small parcels in poor neighborhoods across the city to private developer Harold Buehler for a mere 50 bucks a parcel. Later that evening the proposal would be sent to the full council for its approval. The only stipulation: Buehler had to build houses on the lots within 18 months or pay a $1,000 penalty for each empty lot. Given his mass-production building methods, there was no reason to doubt that he'd avoid the fine, a fee that would be about equal to what Buehler would have to pay for the parcels on the open market.
Mary
Taylor Shelby turned the meeting into a demonstration for Memphis' community
development corporations (CDCs), nonprofit neighborhood associations that
build new homes or rehabilitate old ones in low-income areas. Why hadn't
her CDC -- Students, Mothers, and Concerned Citizens in South Memphis --
heard about the lots the city was basically giving away? She and other CDC
directors lined up one after the other to complain about not being informed.
Shelby demanded that her organization have a say in how Buehler did business
in her neighborhood.
Shelby's thoughts in the incident's aftermath seemed to sum up, in more blunt terms, the sentiments of the other CDC representatives. "I think the city still sees us as more of a tea party, doing little deeds." As for Buehler, she says, "A good businessman made a move and he got the lots. But at the same time, [several of the lots] are at my back door." Buehler didn't have much sympathy for the CDCs: "It's a lack of knowledge and a lack of aggressiveness [on their part]," he says. "They don't have any other excuse."
The city council incident has put people on notice. There's a new player in the almost-empty field of developing the inner city, one that is struggling to gain recognition even as it shows initial -- albeit slow -- signs of success in providing housing and building communities in low-income areas. Individual nonprofits have been in Memphis for ages, but the evolution of community development corporations is different. These grass-roots housing developers hope to create an entire system of nonprofits that would spend millions of dollars in federal, state, and city money. With each success, they hope to attract more and more money from private investors. In the past four years, CDCs have already handled more than $6 million in public funds, a figure that is only going to increase as current CDCs expand and other neighborhood organizations receive CDC status from the state and federal government. CDCs here are just getting started, however, and CDC directors have found that the job means sorting out relationships with everyone from private interests to city government, even as they try to revitalize the inner-city neighborhoods that require so much money and attention.
MEMPHIS' HOUSING STOCK: AN ENTRENCHED CRISIS
Roshun Austin and Eddie Hayes are becoming intimately familiar with the housing problem in Memphis. Austin, the director of the Orange Mound Development Corporation, and Hayes, Austin's staff member, give a reporter a driving tour of their neighborhood, which they are trying to rehabilitate, one new house at a time. They candidly review the litany of ills the area faces. "It's less safe than it was," Hayes says. "The population is aging. Younger, middle-income families have moved out." The disintegration of Orange Mound over the decades is a sore point for many African Americans who know its history. The area used to be part of a 5,000-acre plantation that was divided into pieces after the Civil War. Small houses were built on these small plots and sold to former slaves, making it one of the first neighborhoods in the South where blacks could own homes. By the 1940s, 40,000 people lived in that area, making Orange Mound second only to Harlem in New York in terms of the number of black residents.
Black ownership of homes there was 80 percent at one time, Hayes estimates, but these days he figures that number to be closer to 50 percent. Vacant land is tied up in "heir" property, land inherited by people who don't maintain the property while they spend years trying to figure out what to do with it, often neglecting to pay annual taxes on it. Other parcels are entrusted to a handful of area management companies that do little or nothing to actually maintain the properties.
For Orange Mound and a number of other neighborhoods in Memphis, the problem goes beyond crack houses and unmowed vacant lots. In certain neighborhoods, the housing stock is not increasing or even static, it's shrinking. Six out of 11 regions in Memphis experienced negative growth in residential housing in 1995, according to the Memphis and Shelby County Office of Planning and Development. The south part of the city is being hit hardest. Thirty-three building permits for new residential homes were built in South Memphis, but 136 homes were torn down. The "Depot" area, which includes Orange Mound and the old Defense Depot, lost 41 homes.
The planning department has yet to update its statistics for 1996, but the Division of Housing and Community Development, having hired more members to its code enforcement staff, has reported a sharp increase in the number of homes demolished citywide between this year and last. A total of 616 homes were destroyed during HCD's 1997 fiscal year. Only 436 homes were demolished during the previous fiscal year.
"One of the worst things you can have in your neighborhoods is vacant lots," says Rhodes urban-studies professor Mike Kirby. "If you want a viable neighborhood, you want to put something on those lots. And, as far as I can tell, the private sector doesn't have an interest in putting back homes on those vacant lots. CDCs are the ones to do that."
PRIVATE VS. NONPROFIT
Community development corporations in Memphis are nonprofit organizations that aspire to rehabilitate or build new housing for the poor, and, to a larger extent, rebuild deteriorating inner-city communities. To better understand what they do, compare their efforts to the methodology of Harold Buehler, one of the only private developers in the inner city, a person with whom the CDCs share an uneasy relationship.
The 49-year-old, heavyset, bespectacled Buehler uses a combination of market-savvy aggressiveness, profit-oriented zeal, infomercial-style kitsch, and game-show-host showmanship. All of this in a nondescript office space on Broad Avenue in the underdeveloped Binghamton neighborhood.
People hear about his business through "testimonials" during a Sunday-morning television show, in which recent Buehler customers testify to how giddy, proud, and satisfied they are in their new or rehabilitated homes. Most strikingly, samples of Buehler's approach are right out in his front-office lobby. Photo after framed photo of ecstatic people -- almost all African Americans -- with low incomes getting treated to a limousine ride after they buy their new home; the ladies, he says, also get a dozen red roses. It's an idea he got from a 1950s television show, Queen for a Day, in which four women contestants would get up and confess their problems to host Jack Bailey and the studio audience, who would then pick a "queen" based on which story they considered to be the biggest tear-jerker.
"It was really the most pitiful story [that would win]," explains Jo Buehler, Harold's wife and top salesperson. "You know, the house would burn down, the dog had died, and the sign would go up." She makes a motion with her forearm, turning it into a dial that rises to her hypothetical story.
Whatever
you think about that approach, it's impossible to deny that Buehler Enterprises
has been one of the lone private companies to build homes for low-income
people. He's definitely the largest. Buehler builds about 40 homes a year.
"The bottom line is, how many houses did you build?" asks Buehler,
giving his yardstick for success. "When it's all said and done, how
many did you produce?"
Buehler knows how to get empty lots cheaply from the city and county; without that benefit, doing his job would have fewer incentives. Buehler is usually building between eight to 10 homes and renovating six to eight others at the same time. Getting qualified buyers, though, is the problem. More than 1,000 people come through his office doors every year. Of those, only about 125 have a credit history that's secure enough to get a loan. And Buehler won't build his houses until he's got a pre-qualified buyer. He has no choice. His bank won't allow him to take risks.
Qualified buyers make profits. That's why Buehler's got the TV show, that's why he plays up the day the deed is signed with a limo and roses, and that's why he keeps a computer database of 2,500 names of potential home-buyers.
Finding low-income buyers, getting houses built and rehabilitated quickly, getting banks to approve the loans -- these are all things that competent CDCs do. A key difference between Buehler's profit-oriented business and the nonprofit developers is something that Buehler himself notes. "I don't live in those neighborhoods. If you live there, you've got a real stake," he says.
There's a difference, CDC directors point out, between building homes for indigent residents and resurrecting an entire neighborhood. The profit-oriented Buehler has to go where the cheap lots are; he can't wait for heir property to become available or spend too much time negotiating for particular lots. CDC directors, on the other hand, have to find ways to acquire specific dilapidated homes or empty lots in order to improve one particular street. Steve Lockwood of Vollintine-Evergreen's CDC has shown how to do this by rehabilitating 10 homes on North Watkins. Rubye Smith of the Memphis Area Neighborhood Development Corporation (MANDCO) has done similar things on Rayburn Street in South Memphis, as has SMACC's Shelby on Cannon Street.
It's government grants, or "soft money," that makes this possible, and CDC directors here says it's essential for neighborhood revitalization. Lockwood offers one way to look at it: "Our job is asking, where can we lose some money so that we can, in reality, turn a neighborhood around?"
Being a CDC director in Memphis also seems to mean being uncomfortable with the kind of work Buehler does. Though the CDC directors publicly talk about building partnerships with Buehler, there's a reluctance attached. Buehler, they say, comes in, builds a house, and leaves. With for-profit developers in the inner city, one often gets a new house that doesn't fit in with the rest of the neighborhood and a low-income neighbor who's not necessarily equipped in the long run to pay the monthly mortgage bill.
"I think Harold's a smart guy," says Lockwood. "Honestly, I think the problem is that he's not from the neighborhood. You can go through the neighborhoods and pick out his homes because they're not all that appropriate." One CDC director described Buehler creations as "stark, plain, little, low-brick houses."
Buehler bristles at these criticisms. He whips out a photo of an 816-square-foot, two-bedroom home with vinyl siding, audacious yellow trim, a purple roof, and no visible foundation. The woman who now owns that home, he says, never owned a home in her life. He later produces a photo of that homeowner, Pauline Bell, with her son Louvell. They're smiling in front of a limo.
"These new houses that we're doing, they're some of the nicest houses on the whole block," says David Upton, Buehler's assistant. "We're not talking about Central Gardens here."
Tension between Buehler and the CDCs are especially palpable in areas like Cooper-Young, where historic homes constitute a major reason for the neighborhood's attractiveness. But a new "historic" home means building a home with higher ceilings, higher foundations, and a roof with a steeper pitch. These amenities add up in the thousands of dollars, becoming a project Buehler soon can't afford. Still, he's talking to Jim Kovarik of the Cooper-Young CDC about partnering up with the CDC to build two houses on Blythe Street in that neighborhood.
Kovarik is wary, but he'll listen to the developer's presentation. "We've agreed to a meeting, but we want some numbers up front," he says. "We'd rather not be snookered with a great sales job. We want to talk amongst ourselves as to what we're getting into here." Chief among Kovarik's concerns are the type of houses Buehler proposes to build, how he hopes to fund them, and whether the CDC would be burdened with the insurance or the property if the relationship goes sour.
Some CDC directors are also concerned about the kind of residents Buehler puts in those homes. Buehler may provide up to 40 hours of his time to get someone's credit in line for a loan, or wait up to 12 months for one potential buyer to clean up their credit rating, but is that enough?
Memphis is number one in the nation for personal bankruptcy; a corollary to that is that credit ratings for potential homebuyers are not just a passing concern. Lockwood's Vollintine-Evergreen CDC is stable compared to most neighborhoods west of Highland Street, yet there's a foreclosure on a home there almost once a week.
The CDCs, however, have yet to offer what they criticize Buehler for not doing -- providing a support network to help someone after they've moved into their new home. It's one of the many things CDCs here are still learning how to do.
LEARNING TO CRAWL AND WALK
Jim Kovarik of the Cooper-Young CDC walks around the room as he talks. He has too much energy to sit as he speaks critically of the past and optimistically of the future. If Kovarik wants to pace, he's got plenty of space for it. The second-floor office in the back of the Galloway United Methodist Church is large enough for volleying a tennis ball back and forth.
"Four houses in four years? That's a horrible record," he says. When he took over the CDC several months ago, the previous director still had more than $300,000 in assets from a federal government grant. These grant dollars come with deadlines for their use, so sitting on the money for too long can mean losing it. And money that's not being used usually means there are houses that aren't being built or rehabilitated.
"I feel like I'm just beginning to understand how this works," says Kovarik, ticking off some of the demands of the position. "You're a grant writer, you're a bureaucrat, you're a construction manager, you're a neighborhood organizer." He forgets to mention social worker, to help low-income residents qualify for mortgages, and marketer, to sell your neighborhood to the banks and other private investors.
The
CDCs are still learning to find their stride, some more quickly than others,
for a variety of reasons. They face a number of unique dilemmas. CDC directors
are overworked and underpaid, given the technical expertise required of
them, and the only kind of people who want to fill that position are those
who are committed to revitalizing neighborhoods. Committed and skilled
directors are hard to come by. In addition, some neighborhoods are more
easily revitalized than others, and those that are in better shape have
an easier time leveraging private money, which is essential. Anyone who
tries to save Orange Mound is going to have a much tougher job than anyone
just trying to clean up the fringes of the Vollintine-Evergreen or Cooper-Young
neighborhoods.
But for the most part CDC directors admit that some local CDCs are more advanced than others. By looking at the number of houses built and by interviewing at length each CDC director about neighborhood needs and housing strategies, a three-tier list emerges:
Of the CDCs that have received government funding, United Housing and Vollintine-Evergreen are considered the most advanced. United Housing is not based in one particular neighborhood, but it is increasingly forming partnerships with other CDCs. Vollintine-Evergreen has benefited from the technical assistance and $1 million grant from Pew Charitable Trusts; now that it's aggressively going after federal funding, Lockwood plans to expand its housing efforts to other parts of North Memphis.
MANDCO and SMACC in South Memphis both have aggressive CDC directors, and they fall somewhere in the middle. MANDCO benefits from having State Sen. Roscoe Dixon on its board. Despite its poor performance in the past, the Cooper-Young CDC benefits from a neighborhood that is experiencing a resurgence few other communities in the city can brag about.
Memphis Heritage, the Orange Mound CDC, St. Patrick's Catholic Church CDC, and Douglass-Crump Bungalow Association form this lowest tier, though Memphis Heritage will probably progress much faster than the others, given the experience its new director, Judith Johnson, has had at HCD. Orange Mound's CDC almost fell apart two years ago after a bitter political power struggle between its director and two other community groups. The CDC of St. Pat's, judging by the kind of "letters of correction" it has received from HCD over the years, is still getting off the ground. The Douglass-Crump CDC director Halloe Robinson had the most difficult time articulating how his CDC plans to attack local problems.
"It's been a very incremental process," says Rhodes College's Kirby. "You have to learn to crawl before you can walk or run."
One CDC has already folded. The Memphis Multi-Bank CDC was organized through the efforts of Shelby County Commissioner Shep Wilbun, Tim Bolding (now with United Housing CDC), and three local banks: First Tennessee, Union Planters, and National Bank of Commerce. The CDC received $170,000 in 1995 from the U.S. Department of Housing and Urban Development. It built several homes in the Greenlaw neighborhood, but after its director left to take a job in Idaho, the organization's efforts came to a halt. Bolding says the banks decided to change their role to one that financially assisted neighborhood groups. Critics say the banks were only involved in the CDC because they saw it as a good public-relations move.
As the CDCs struggle to make their housing initiatives work, the city has tried to figure out ways to work with the nonprofits to whom they are now funneling millions of dollars in federal and state money. There was a major disruption in housing construction when HCD delayed its dispersement of federal money by several months. The delay took place because HCD had to change computer software, HCD director Debra Brown explains, to be able to communicate with federal government housing agencies. Meanwhile, CDC directors sat on their hands for months with outstanding debts that they couldn't pay off.
Although the administration of Memphis Mayor Willie Herenton has been more receptive to grass-roots activism than his predecessors, there's more that can be done, CDC directors contend. The city hasn't been very communicative to the CDCs, making directors wonder whether they are being taken seriously or not. "The city hasn't understood why it should beef up and encourage the capacity of CDCs," Lockwood says. It's been two months since the CDCs complained about Buehler getting 29 lots for $50 a plot each. After a month of talking, Buehler and Shelby reached some tentative agreements on how they will work together in the future. How well the city and the CDCs will improve communication is hard to say.
There are signs that progress is being made, though. This past week, the National Congress for Community Economic Development in Washington, D.C., hosted its national conference at The Peabody. These conventions provide information-starved CDC directors the kind of technical advice they can use.
The CDCs have also persuaded HCD and the Community Foundation of Greater Memphis to jointly hire Liz Wills as their consultant. Wills comes from New York, where her Bronx CDC produced about 170 housing units a year, far more homes than United Housing or even Harold Buehler builds. Her first job is to audit each of the CDCs. She plans on writing a report in the near future about the weaknesses and strengths of the CDCs, though she wants to keep the results secret.
Wills has only been in town for a few months, but it's long enough for her to gather some initial impressions. "I think that the CDCs have not presented a concerted plan for request and for access. It's been very much a grab-in-the-barrel, this-is-what-I-want-for-my-neighborhood approach." As for HCD, she provides the standard line about how it is growing along with the CDCs, though she does urge the Center for Neighborhoods to spend the technical assistance money it's been allocated.
"Give it time," Wills urges. "[The
CDCs] are new, young businesses. These are [nonprofit] businesses that are
starting at huge disadvantages."
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