INTRODUCTION

This report contains the recommendations of the Housing Assistance Council (HAC) for increasing the housing development capacity of community-based organizations (CBOs) in the Mid-South Delta, with an emphasis on increasing CBOs' capacity to produce affordable housing. It is based on research conducted during the summer of 2001 under a memorandum of agreement with the Enterprise Corporation of the Delta (ECD).

HAC's recommendations are primarily based on the survey responses of 23 community-based organizations in the ECD's 58-county service area in Arkansas, Louisiana, and Mississippi.¹ In the survey, HAC inquired about the organizations':

• productivity,
• knowledge of housing programs,
• biggest challenges (over the next five years), and
• their recommendations for changing the way that public agencies and/or intermediaries work with them.

The priorities of the Mid-South Delta community-based housing organizations, as expressed in their survey responses, can be grouped into four categories:

• finding additional resources to build low-income housing,
• finding resources for staff and administration costs and money to build staff capacity,
• finding and/or qualifying participants for mortgage programs, and
• increasing the flexibility of low-income mortgage programs.

The recommendations presented in the attached document address these priorities by suggesting ways to:

• increase cooperation and flexibility from the public and private sectors as they consider investment opportunities with community-based housing organizations; and
• broaden the use of state and national program funding to create more housing, primarily homeownership, opportunities for low-income Delta residents.

Each recommendation requires partnerships between community-based housing organizations, states, state housing finance authorities, public housing agencies, local political jurisdictions and, in one case, federal congressional delegations and a federal agency. The strategies that require the most partnering, planning and coordination include creating change in the Rural Housing Service Section 502 program and persuading public housing authority directors that it is in their best interest to begin using Section 8 Housing Vouchers for homeownership purposes.

None of the recommended strategies can be pursued successfully without the informed and active support of the Delta's community-based housing organizations. Practitioner-led coalitions such as the Delta Compact and the fledgling statewide associations of community development corporations (CDCs) in all three states can, when given the opportunity, serve as important allies and strategic standard bearers for these recommendations.

At ECD's request, most of the following recommendations focus on homeownership as a key strategy for Delta community wealth-building and improved quality of life. The Housing Assistance Council recognizes the need for improved rental opportunities for low-income Delta residents as well, and throughout its history has been a strong supporter of affordable rental housing.

The challenges of increasing the Delta's supply of quality housing and encour

• In 1995, 44 percent of all U.S. household net worth was attributable to homeownership.
• Homes are important savings accumulation and equity vehicles. For low-income Delta households, they are often the only appreciating asset available to leverage loans for education and small business start-ups. They also serve as valuable launching pads for home-based businesses and self-employment. The successes of these income-generating strategies are all greatly affected by homeownership.
• Homes are often the only means of generational wealth transfer for Delta families.
• Housing is among the few assets whose financing costs are acknowledged with a federal personal tax deduction, providing low-income households with an increased opportunity to preserve earned income.
• Homes serve as an important taxable item for state and local taxing jurisdictions, such as school districts.
• Homeownership anchors families to communities and reduces transience, increasing children's chances of completing school successfully. It is often the most visible quality of life indicator in a community.
• Homeownership is a powerful economic engine. The National Association of Home Builders estimates that the construction of 1,000 new homes generates 2,448 jobs in construction and related industries, approximately $79 million in wages and more than $42.5 million in federal, state and local tax revenues.²
• In the first 12 months of new homeownership, owners spend an average of $6,500 to furnish, decorate and improve their homes. Buyers of existing homes spend $2,668 more than non-moving homeowners during the 12 months after purchase for appliances, landscaping, plumbing, heat and air conditioning, and eating out.

HAC's recommendations are presented as memos that strategically address the challenges identified from the survey of several Delta community-based housing organizations.³ The challenges are:

• increasing the number of low-income persons who qualify for subsidized mortgage programs;
• improving one of the most often used⁴ low-income mortgage programs so that it better serves its target audience;
• increasing Mid-South Delta states' support for low-income housing and capacity building for community-based housing development organizations;
• involving public housing agencies in Delta homeownership efforts;
• increasing Delta communities' participation in HOME program funding; and
• improving Delta communities' access to housing rehabilitation resources.

An additional topic, the potential use of alternative building methodologies and energy-efficient technologies to reduce costs, is addressed in Appendix D.

Back to Table of Contents