Columbia's partnership with banks provides housing opportunities in older neighborhoods

Monday, April 23, 2012 | 6:00 a.m. CDT; updated 9:03 p.m. CDT, Monday, April 23, 2012
In a partnership with Columbia Community Development Corp., students from Rock Bridge and Hickman high schools have been building a home on Lynn Street as part of an advanced construction class.

COLUMBIA — After moving into her house in July, ElTonya Rhoades' first big purchase as a homeowner was a fence. Not a white-picket fence, but a tall, practical, wooden fence that enclosed her spacious backyard on Oak Street.

She said her 6-year-old son, Elijah Jackson, was prone to running into the street while playing outside, forgetting to look both ways for cars.


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"Elijah is fearless," Rhoades said. "I wanted a big fence. This way he can stay outside and be safe."

Rhoades' home stands one story tall, with tan siding, a dark brown roof and cranberry-colored shutters flanking the two front windows. She said she handpicked the house when she toured it two years ago. The location was perfect: two blocks from her job as an executive assistant at the Columbia Housing Authority.

Built in 2008, the dwelling is one of 29 homes built since 1994 by the Columbia Community Development Corp., a coalition of seven community banks that has removed vacant or dilapidated housing in the city's First Ward and replaced it with newly minted homes.

The corporation requires the new homes to be owner-occupied in hopes of adding stability to the neighborhood, said Guy Long, a seasoned real estate agent who has worked as the corporation's listing agent since its inception.

"We believe in pride of ownership," Long said. "Homeowners take care of their own property. These homes have been clean, neat, manicured and cared for."

Rhoades, 33, said she knew she wanted to be a homeowner. After living in public housing for five years and in Section 8 housing for an additional nine months, she welcomed the independence homeownership provided.

"I really wanted a place to provide for my son that we could call home, where no one could tell me how to live," Rhoades said. "No one can tell me whether I can barbecue on the front porch, or have a dog or not. They're my rules."

She said her chief concern, however, was fixing her poor credit. Doctor bills, student loans and telephone bills had piled up over time, forcing Rhoades into bankruptcy and making it near impossible for her to take out a loan.

"I didn't have much money. I had to take a lot of things out on credit," Rhoades said. "That's what low-income people go through. You have to go to the doctor if you’re sick, but then you can't pay the bill."

Rhoades climbed out of debt in two years. She said she never forgot about her dream house on Oak Street. She was familiar with the Community Development Corp.'s housing because her mother bought a home from the group in 2001. She contacted Long, the agent her mother had used.

She also took out a loan with Boone County National Bank and qualified to receive nearly $30,000 worth of federal housing grants from the city under the Homeowners Assistance Program. Rhoades was primed to pursue her house, and she closed the $115,000 purchase in a matter of days. She said she couldn't have moved forward without the grants from the city.

"My down payment was only $500," Rhoades said. "Even if you saved, no one can come up with $10,000 out of pocket."

Public-private partnership

The tan house on Oak Street and its first-time homeowner are part of a slow evolution in Columbia's oldest neighborhoods, where a unique partnership between the city and the Community Development Corp. is bringing new homes and new homeowners to the First Ward.

Sixteen years ago, a group of local banks approached Michael Crist, executive director of the Enterprise Development Corp., and asked if his organization would oversee a multi-bank coalition focused on improving Columbia's worst neighborhoods.

Crist said that before the corporation formed, banks were very good at competing but didn't have much experience working together.

"They needed a third party to administer that was not one of them," Crist said.

The Enterprise Development board agreed to oversee the project.

Many banks across the country create community development corporations. In the early 1990s, the Office of the Comptroller of the Currency, a wing of the U.S. Treasury Department that regulates banks, allowed banks to create external corporate entities focused on rehabilitating traditionally underserved areas through investment in residential real estate, commercial redevelopment or neighborhood facilities.

What makes the Columbia corporation uncommon, said Steve Erdel, president of Boone County National Bank, is the collection of competing banks working together.

"Normally a community development corporation is one particular bank that owns the corporation on the side," Erdel said. "In this instance we have local banks in the same market sharing expenses and risk on investments."

"Bankers coming together is a bit of an anomaly compared to other markets," said Andrew Beverley, president of Landmark Bank-Columbia.

Once the foundation for the Columbia Community Development Corp. was in place, it formed a partnership with the city to provide subsidies for low- to moderate-income prospective homeowners interested in buying its houses.

"We've marketed the houses using homebuyer incentives from the city," Beverley said. "It makes it more affordable."

"The city's main assistance is through the subsidy loans provided by (the U.S. Department of Housing and Urban Development)," said Tim Teddy, director of Columbia's Community Development Department. "The program's allowing public dollars to leverage private sector dollars and help people get a hand up on homeownership."

Long said that 27 of the 28 homes sold have used federal grant money from the city.

In total, Crist said the public-private partnership has invested about $2.5 million into the neighborhood, with the city shouldering roughly $400,000 of that.

Sales have slowed in the past few years. The recent housing crisis has made selling homes hard, no matter where they're located, Crist said.

Rhoades' house sat on the market for three years, and another home on Oak Street has been on the market for more than a year.

Beverley points to the small contingent the housing subsidies service as a possible reason for sluggish sales.

"It's not that there's not a demand for these homes," Beverley said. "A homebuyer's income must be low enough to qualify for the city grants but high enough to qualify for bank loans."

As for total profit, Erdel said the banks didn't expect to make money. He said the Community Development Corp. has lost about $153,000 since 1994.

"Everybody presumes the banks had some hooks in this — some benefit," Erdel said. "Back when we started people didn’t believe we'd do what we did and follow up. But I'm comfortable in saying the neighborhood has been strengthened."

"Maybe it's a bit esoteric, but the success rate is that we've built 29 houses," Erdel said. "You look for success by driving down the street and seeing lawns are mowed and properties kept up."

Since the beginning of the partnership, homeownership in the corporation's houses has been stable, Long said. The average Columbia homeowner sells his or her home every five to six years. Long said that 18 of the original 28 homeowners are still in their houses.

Long said he functions as the eyes on the street in his realty jurisdiction, identifying abandoned homes and unlivable properties for the banks to purchase. While driving through the neighborhood in his Toyota Avalon, he pointed to several rough-looking properties with knee-high straw grass and crooked houses in need of much more than a coat of paint.

"We've demolished these ramshackle houses and replaced them with high-quality, energy-efficient homes," Long said. "Over time, the look of the street changes from real ugly to real nice."

In hopes of maintaining the neighborhood aesthetic, the houses are designed to look like the much older homes in the area, many of which were built in the early 20th century. The Community Development Corp. has used the same architectural plans for each home with slight modifications for variety and lot size.

"If we stuck a ranch in there it would look weird," Crist said.

Long said most of the homes have three bedrooms and two bathrooms, and they run around $110,000.

He said the shotgun-style houses and deep, narrow lots with big backyards evoke an old-time ambiance.

"The front porches and the long backyards are from a bygone era," Long said. "They're the originals. But we've built them with modern, energy-efficient qualities."

Most homes are outfitted with especially thick 2-by-6-inch walls, double-paned windows and durable siding. Rhoades said her high-efficiency furnace has greatly reduced her utility costs.

"We build one house at a time," Long said. "We don't cut corners. We believe in quality."

Rebuilding neighborhoods

The quality control behind the houses trickles down to the foundation. Bill Mitchell teaches the Construction Technology Program, a longstanding course offered by the Columbia Area Career Center that "takes the classroom to the construction site," Mitchell said.

The program partnered with the Community Development Corp. and has helped build almost all of its homes. Students install siding and trim, apply Drywall and hang windows, doors and cabinets, among other activities. 

Mitchell and his three classes, which include students from Hickman, Rock Bridge and Hallsville high schools, have been working on a project on Lynn Street since late fall 2010.

"The houses build a little bit slower, but we're learning when we fail," Mitchell said. "It's pretty stringent. We correct our mistakes and build it back up and do it right. When you're hanging a big sheet of Drywall, everyone has to work together or you're in a world of hurt."

Mitchell owned a construction services company in northeastern Oklahoma for 17 years and worked for five years with community redevelopment programs in north St. Louis. The Lynn Street home is his first house with the Columbia program, but he said he's been impressed with the coordination between the city and the private sector.

"The program has a deep understanding that what's good for the neighborhood is good for everybody," Mitchell said. "In north St. Louis, getting people in the community to work together was a challenge. The CCDC knows what's needed in Columbia."

Jacob Kingsley, a senior at Rock Bridge, has worked on two homes with the program and plans to enter the construction field. He said his brother-in-law's aunt moved into a Community Development Corp. house in the organization's earlier years and that he feels he's making a long-lasting impact.

"I know this house isn't going to be torn down or condemned," Kingsley said. "So I know I'm helping out the community."

While Kingsley and his classmates complete another house, Rhoades said that when she has the time she plans to garden in her backyard.

"I'd really love for Yard Crashers to come over," Rhoades said, referring to a show on the Home and Garden Television Network. "I watch it all the time and dream of them coming to my house."

As she surveyed the three massive trees and their sprawling limbs casting evening shadows over her lawn, she remembered the first time she realized that she owned a home.

"I was talking to my cousin about cutting the big tree vines, and I realized I had to get a ladder and a saw," Rhoades said. "My cousin said, 'What? A ladder?' I said, 'Girl, I'm a homeowner now. No one is coming out to fix anything anymore.' It's all on me."

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Tracy Greever-Rice April 23, 2012 | 12:12 p.m.

So much good work by great folks all the way around. What a shame it would be to declare these hard-earned and well-loved homes as blight.

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Kevin Gamble April 23, 2012 | 1:08 p.m.

This success story is a good reminder that the only sustainable and humane implementation of capitalism includes public institutions and funding as essential components. Public and private entities working together brings out the strengths of all parties, and the result benefits both individuals and the whole community.

Kudos to all involved who are making this happen!

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