CHARLOTTE – It takes a lot of self-help – lower-case – to revitalize a neighborhood like Grier Heights with affordable housing, and so far Self-Help – capitalized – has been there, quietly but most helpfully.
The Center for Community Self-Help, a Durham-based conglomeration of half a dozen nonprofit lending and development corporations with at least $100 million in total annual revenues and a national reach, is involved in two residential real estate ventures in Grier Heights: a new single-family owner-occupied subdivision and a for-lease multifamily complex.
In the case of the 36-lot Elizabeth Heights subdivision under construction, Self-Help has been happy to let its partners be the public faces of the project – the non-profit CrossRoads Corp. for Affordable Housing and Community Development, and the for-profit builder JCB Urban and the Helen Adams Realty sellers agency – all three of Charlotte.
Self-Help’s multifamily development, the ongoing renovation of the 34-unit Grierton Court town house complex, has been so low-key that it has received little to no attention from the press.
But with last week’s announcement that for-profit, Charlotte-based RuBec Properties will manage the apartments – a key role considering that Self-Help officials say that Grierton Court fell into disrepair as a result of poor management – the nonprofit has outed its considerable Charlotte presence, which also includes an effort to buy and renovate foreclosed-on homes in the Peachtree Hills starter-home subdivision.
“Much of the credit for the success of Elizabeth Heights, an incredibly complex project with all its partnerships, goes to Self-Help, which has really held it together, and largely behind the scenes,” said Curt Seifart, the Helen Adams Realtor who has signed buyers with all eight of the first-phase homes in Elizabeth Heights.
Self-Help – described by spokesman David Beck as “a family of nonprofit organizations including two credit unions; a community development loan fund; and a policy and research organization, the Center for Responsible Lending” – had humble origins some 30 years ago.
“The story goes that Martin Eakes, our founder and CEO, started the Self-Help Credit Union with $77 earned from a bake sale,” said Kim Cameron, the nonprofit’s director of real estate.
“Now we have 500 employees. The credit union is state-chartered and has expanded to become a federal credit union as well with operations in California and Chicago. A lot of organizations such as Self-Help have not survived the downturn. We have grown throughout this time, with sound business decisions and adequate reserves.”
A look at the federal tax returns and financial statements of the Self-Help entities verifies Cameron’s assertions. The books are more than balanced, the assets are steady and the administrative-program cost ratio is low. Employee experience level, on the other hand, is high. Cameron has 20 years in the nonprofit housing world, in Atlanta and Milwaukee, and Self-Help project manager Donnetta Collier has 30, in Boston.
Most important, the lending and development programs – market-priced, historic commercial building rehabs; new and renovated affordable residential development; and loans to small-businesses and affordable residential developers – effect positive change.
‘Gentrification with justice’
The history of the Grierton Court project – in which all of the units in one of the four town house buildings have been renovated inside – illustrates two Self-Help strategies: loans to commercial and nonprofit builders and developers of affordable housing, and doing the building and developing itself.
A different nonprofit entity acquired the 1960s complex in the mid-2000s, and won a loan from Self-Help – which had won money from the U.S. Housing and Urban Development Department’s Neighborhood Stabilization Program – to renovate them.
But the recession hit, the nonprofit went belly-up, and Self-Help was forced to foreclose on the property, Cameron said, before deciding to continue the project and acquiring it in 2012.
One of the Self-Help philosophies that has come into play is not displacing people, what CrossRoads executive director Don Gately likes to call “gentrification with justice.”
In the case of Elizabeth Heights, all the single-family home lots acquired by CrossRoads and Self-Help were abandoned duplexes whose only residents were illegal ones. Crime fell 30 percent after the two nonprofits demolished the structures, Collier said. Current residents of Grier Heights who rent are the target market.
“We want to leave the families in place,” Collier said. “Our goal was never to displace or out-price people. Everything we have bought is vacant. And we didn’t push anyone to sell.”
In Grierton Court, the units are being renovated as tenants leave, Cameron said.
When enough units are complete, work will begin on exterior renovations, which will include replacing the chain-link fence around the complex with something nicer, adding front porches and back patios, and major landscaping improvements.
The renovated apartments, which will rent for $550, have hardwood floors in the bedrooms, laminate in the formal rooms and vinyl in the kitchens. Tenant income is capped by HUD at 120 percent of the Charlotte area’s median income for a family of four, or $77,000.
Cameron touted the signing of RuBec, a 7-year-old firm that manages 300 properties, nearly all of them single-family rentals, as the latest coup for Grierton Court.
“The neglectful management by the previous firm led to disrepair,” Cameron said. “RuBec is very excited about this project and has been attending community meetings to try to better fit the needs of the neighborhood. The previous guys did not do that.”
At RuBec, spokeswoman Hattie Wheeler said, “We try to give back.” She also noted that the renovation work to the first building has been so effective, current tenants in other buildings, as well as former complex renters, are applying to get into the rehabbed units.
Cooperation fuels construction
On the single-family, homeowner-occupied side of Self-Help, the nonprofit began work several years before the CrossRoads partnership on Elizabeth Heights, building nine new homes and gut-renovating two as infill housing scattered throughout Grier Heights
Most of the existing housing stock is 1950s and ’60s. The historically black neighborhood was originally set-up as a community after the Civil War by former slaves, and platted in 1949 as the area’s first suburban subdivision for blacks in the separate-but-equal era by Arthur S. Grier, who named many of the streets for his family members; Fannie Circle, main street Grier Heights, was a tribute to his mother.
Once a proud neighborhood, it became one of Charlotte’s most crime- and depravation-ridden.
But, said Collier, most of the residents remained stalwart.
“We say we have a three-legged stool: Self-Help, CrossRoads and the Grier Heights community; the residents are the backbone of the whole thing,” Collier said. “And we couldn’t have done any of this without the city of Charlotte.”
Self-Help discovered that building and renovating scattered houses was not having its desired effect, which was to create what Collier called “a critical mass” of new housing to attract for-profit development and revitalize the neighborhood.
Enter CrossRoads, spun off from Myers Park Presbyterian Church, which first came to Grier Heights to sponsor a book-reading club with two local churches. The two organizations figured out that if they worked together, they could put together more than 30 contiguous lots in an effort to create a neighborhood-within-a-neighborhood and to achieve Collier’s critical mass.
Self-Help usually buys lots and sells them to other affordable housing developers, including Habitat for Humanity, which is also active in Grier Heights. But the downturn made the lots worth less than they were bought for, and Self-Help and CrossRoads decided to do the work themselves. They brought in Jim Burbank of JCB Urban, a dean among Charlotte homebuilders, to construct the homes – which have hardwood floors, granite countertops, sealed basements and solid interior doors – and to act as an unofficial adviser.
“We went to the city and said we need help,” Collier said. “We got a $427,000 grant from the city, and that was how we were able to get Elizabeth Heights started.”
The first eight Elizabeth Heights homes cost $170,000 to build and went on the market in the upper $130,000’s. The next eight will be about $10,000 higher in price, Seifart said, and the hope is that eventually the neighborhood will be mixed-income.
Some observers question how affordable homebuilders and developers can hope to sell homes in those price ranges to people making 80 percent of area median income, or $52,100 for a family of four. As Collier admits, it takes about $25,000 in down payments and fees to get into the homes.
“What they don’t understand is that there are all kinds of down-payment assistance programs out there,” Collier said.
“You can get $15,000 from Wells Fargo’s Neighborhood Lift program, and it’s forgiven after five years. You can get another $7,500 from the city’s House Charlotte that is forgiven in 10 years. And you can get a loan from the N.C. Housing Finance Agency, a quasi-government organization, for 15 percent of sales prices that is forgiven after the first mortgage is paid off.”
And, she said, applicants are carefully screened, advised and guided.
“We’re not going to do anything predatory or that they can’t afford,” Collier said. “We don’t do anybody if their payment would be $100 over their monthly rent. I’ve made some enemies that way, but it’s for the best.”