EXECUTIVE SUMMARY

The Lower Mississippi Delta region¹  is one of the poorest areas in the United States, with an overwhelming need for the development of decent, affordable housing. The region has had high, even extreme rates of poverty for decades. Poverty is particularly prevalent among African Americans; over 50 percent of the African Americans in the Delta live in poverty. The Delta is also characterized by a sluggish economy, high unemployment rates and problems arising from its legacy of segregation. Efforts to address the problems in these communities have faced significant barriers including insufficient local capacity to undertake development efforts, the absence of adequate resources and financing mechanisms, and the lack of collaboration between ongoing efforts in the region.

Despite the numerous challenges encountered, many local organizations have devised creative ways to work in partnership with the public and private sectors to develop innovative projects to assist Delta residents. This report focuses on documenting some of the different approaches to improving housing and infrastructure conditions in the Delta. Four case studies highlight the stories behind successful ventures to create alternatives for Delta residents. They discuss the obstacles overcome by local entities and include lessons for other organizations interested in replicating these successes. In addition, each case study represents a unique approach to addressing problems in the Delta.

For instance, Southern Mutual Help Association's Rural Home Loan Partnership (RHLP) illustrates how a nonprofit organization can benefit from participating in a nationwide partnership effort for revitalizing rural America. This group has successfully utilized the RHLP to leverage resources for creating affordable housing options for low-income families in Southern Louisiana.

Sacred Heart Southern Mission's Dehon Village project in Walls, Mississippi demonstrates how a nonprofit organization can overcome numerous obstacles and build capacity to undertake the development and maintenance of complex affordable housing projects.

Delta Housing Development Corporation's development of self-help housing in Sunflower County, Mississippi demonstrates how the contribution of sweat equity can help families obtain decent affordable housing.

Southern Development Bancorporation's rental housing project in Clarendon, Arkansas, depicts how collaborating at the local level can provide creative opportunities for meeting the affordable housing needs of Delta residents.

INTRODUCTION

The Lower Mississippi Delta (LMD) region is one of the poorest areas in the United States, with nearly a third of the population in Arkansas, Louisiana, and Mississippi living in poverty.²  These high, even extreme, rates of poverty have persisted in this region for decades. As far back as 1970, the Mississippi Delta region (then identified as 43 counties within the flatland delta areas of Arkansas, Louisiana, Mississippi, and Missouri) was considered to have the largest number of poor people in the country.³  In 1988, Congress established the Lower Mississippi Delta Development Commission, which expanded the region's geographic definition to include a total of 219 nonmetro counties in portions of seven states: Arkansas, Louisiana, Mississippi, Missouri, Illinois, Tennessee, and Kentucky. The 1989 poverty rate of the Delta's approximately 8.4 million inhabitants from these seven states was 23 percent. The Delta Commission published a comprehensive report in 1990 focusing on developing proposals and strategies for solving the Delta's worst economic development needs, including related housing issues. Since then several entities and individuals have studied the Delta and published reports with recommendations for tackling some of the pervasive problems of the region. Despite this, the region continues to have an overwhelming need for the development of decent affordable housing and related infrastructure. In recent years increased public attention has once again been focused on the Delta region. A number of special initiatives targeting the Delta have been commissioned at the national and regional level.⁴  There is also renewed commitment on the part of local nonprofits, and the public and private sectors, to jointly tackle the problems in the Delta.

For the purposes of this study the Lower Mississippi Delta region will include the nonmetro counties identified by the Delta Commission as forming the Lower Mississippi Delta in the three states of Arkansas, Louisiana, and Mississippi.

Population

The LMD has a total nonmetro population of 2,996,920. A large proportion of each state's nonmetro population resides in rural areas (generally, open country and places with fewer than 2,500 residents). LMD inhabitants are more likely than the rest of the U.S. population to live in nonmetro counties. The LMD population is also generally more rural than the total U.S. population. The Delta region has a higher proportion of African Americans than the United States as a whole, with 34 percent of the total combined population of Arkansas, Louisiana and Mississippi African-American. This contrasts with a nationwide African-American population of 12 percent.

African-Americans also make up a relatively large percentage of the Delta region's nonmetro population. (See Figure 1.1.)

Figure 1.1  Nonmetro African-American Population
                  By State in the LMD

Householders in the Delta region are more likely to be elderly than householders nationwide. Elderly households (headed by a person 65 years and older) make up 29 percent of the nonmetro population in Arkansas, 23 percent of Louisiana's nonmetro population, and 26 percent of Mississippi's nonmetro residents

Poverty

As is true for other regions in the United States, persons living in nonmetro areas of the LMD are more likely to live below the poverty line than are metro area residents. These high rates of nonmetro poverty nonetheless mask staggering rates of poverty among vulnerable subpopulations, with poverty rates for children under five years old running from 34 percent to 42 percent among the three states, and poverty rates for elderly persons 75 years or older falling within the same range.

Poverty is also particularly prevalent among African-American residents of the Delta region. It should also be noted that African-American children under five have very high rates of poverty in the Delta region, ranging from 65 to 67 percent across the three states.

Among all races, single-parent families with children are the most likely to be poor. Female-headed families in nonmetro areas of the LMD experience poverty rates ranging from 62 to 68 percent across the three states. (See Figure 1.2 for chart on poverty in the LMD by race and gender.) Married couples, both those with and without children, have much lower rates of poverty. Married couples with children have nonmetro poverty rates around 17 percent in the three LMD states selected for this study, while couples without children had rates between 11 and 12 percent. African-American, female-headed households face even greater rates of poverty in the nonmetro areas of the Delta region, with a poverty rate of nearly 75 percent in all three states. Generally, among all family types combined, poverty rates are between 6 and 9 percentage points higher in nonmetro areas of the Delta region than in the region’s metro areas.

Figure 1.2  Poverty in the LMD
                    By Race and Gender

Housing and Infrastructure

The housing problems of the region result from the fact that the social, political, and economic agenda of the region was historically created, sanctioned, and nurtured on the economic exploitation and social isolation of the African-American population.⁵

There are a total of 1,185,505 housing units in nonmetro areas of the LMD. There is an overall vacancy rate among the three states of 11 percent, which is comparable to the 1990 U.S. vacancy rate of 10 percent. Among the three states, between 71 and 73 percent of units are owner-occupied, while between 27 and 29 percent are renter-occupied. It should be noted that minority householders in the Delta region are less likely to be owners than white householders, as is true nationally.

Housing units in nonmetro areas of the Lower Mississippi Delta are more likely to be on public or private water systems than nonmetro units throughout the country. The higher incidence of water systems is due primarily to soil conditions in the region that do not allow for drilling of safe, adequate wells. In its 1990 report, the Lower Mississippi Delta Development Commission noted that development of water and sewage facilities in rural areas of the region is very costly.

Among all nonmetro households, 2 percent lack complete kitchens in each state. Each state also shows between 2 and 3 percent of units lacking plumbing. However, African-American households in each state lack plumbing at much greater rates ranging between 4 to 5 percent across the three states.

Generally, nonmetro households are more overcrowded than are metro households in the Delta region, with overcrowding defined as more than one person per room. Overcrowding rates average at nearly 5 percent for owner-occupied units across the three states and are even higher for renter-occupied units.

The Lower Mississippi Delta has very high rates of cost burden among nonmetro households, with cost burden defined as paying greater than 30 percent of monthly income for shelter costs. Between 17 and 22 percent of nonmetro owners are cost burdened in the three states, which corresponds exactly to the range for metro areas in the region. Cost burden rates are higher for renter households. Finally, elderly households are more likely to have cost burden problems than non-elderly households. Approximately 58 percent of nonmetro elderly renters in each LMD state is cost burdened, and approximately 25 percent of nonmetro elderly owners also face housing cost burden.

Key Challenges to Effective Community Development

Legacy of Racial Segregation

Delta communities continue to struggle with overcoming the legacy of segregation. Since the poor tend to be politically disenfranchised, Delta communities also have to overcome the lack of political will on the part of the government to deal with problems facing Delta residents. Consequently organizations serving distressed rural communities in the region are forced to compete with more established groups in other parts of the Delta states for allocation of resources. There is still a "rewards and retribution" system in place in many areas, which results in nonprofits being hesitant to voice grievances because it may endanger future funding.

The Mississippi Delta has always been based on inequality. The fortunes of the region’s planters and white working class were supported for most of its history by the labor of black slaves, then of black sharecroppers. Until integration, whites controlled most of the Delta towns. However, particularly after the integration of the schools in the 1960s, young whites began to leave for big cities like Memphis or Jackson or for the larger towns in the region. No whites moved in to replace them and the population began to dwindle. This decline was further exacerbated by the migration of the ablest members of the black population as well. Those left behind are disproportionately very old or very young and are mired in poverty. Consequently, there is a low general level of skills and abilities among the Delta population. Ownership of the land is concentrated in the hands of a few, and extremes of wealth and poverty continue to prevail.⁶

The Delta’s plantation economy has created within the Delta conditions similar to that of a developing nation. In addition, entrenched racism continues to stymie efforts at progress in the region. For instance, new industries, especially those with better paying jobs, tend to locate in areas with the lowest proportion of blacks in the population. This is known as the 30 percent rule. In other words, if an area is 30 percent or more black, companies tend not to locate there.⁷  Effecting change under these conditions poses a tremendous obstacle.

Lending Issues

Conventional lending mechanisms are often inappropriate for use in the Delta. The target population’s income level, and the levels of risk perceived in serving this population, have prevented many private lending institutions from financing housing and community development activities in the Delta. Clearly, any credit mechanisms for serving Delta residents would have to be creatively designed. Private sector institutions are generally motivated by profit margins, precluding their intensive involvement in the Delta.

A 1995 report by the Federal Reserve Bank of St. Louis asserts that small banks remain an integral part of rural communities in the Delta.⁸  Since April 1995 through 1998, three major banks and a number of smaller banks serving the Delta have merged or been acquired by larger banks outside of the region. This trend reduces the number of institutions with primary interest in the rural Delta. Local Delta banks that remain have limited capacity to assess risks and make loans outside of commodity-based agriculture. They also tend to have conservative loan to deposit ratios, and are also perceived as conservative by the community. These banks are unlikely to become acquisition targets because they are too small and because their markets are not seen as profitable.⁹  The challenge is to engage these institutions in participating in the development of affordable housing in the region and encourage them to create new partnerships with nonprofits.

Inadequate Capacity

Related to the lack of available resources is the lack of sufficient local capacity to solve the problems in the Delta. Capacity needs include access to funding, organizational development, technical assistance, training, and the creation of new local groups to undertake the task of improving conditions in the Delta.

The number of nonprofit organizations undertaking housing and community development activities in the Delta is limited, especially in Louisiana. Even when organizations do exist, they tend to be concentrated in certain areas. For instance, an analysis of Community Development Corporations (CDCs) in the area by Mid South Delta LISC in 1995 found 15 of 21 CDCs in Arkansas located within 40 miles of Forrest City. Similarly, 10 of the 19 CDCs identified in Mississippi are located in the North Central counties of Tallahatchie, Quitman, Coahoma, and Bolivar.

The most sophisticated groups often lack the technical skills to initiate a comprehensive program of housing or economic development. Most that own or have developed housing have relied on consultants to package their projects. Experts needed for developing housing projects such as appraisers, real estate attorneys, and other specialists are often not available. In fact, it is often impossible to locate licensed contractors to undertake construction of proposed housing projects. This lack of human capital is perhaps the most serious impediment to development in the Delta.

Lack of Collaboration

Limited resources have resulted in dividing even those groups that seek to mitigate problems in the Delta. Scarce funding sources have caused some measure of tension among Delta advocates as they struggle to establish priorities among needs that are equally critical, such as housing, economic development, and education. Often groups are forced to compete for the same pool of resources, hindering attempts at coordination and collaboration. In addition, several national level entities are leading efforts to examine and address the problems in the Delta, without much consultation with each other.

Based on these challenges, there are several potential approaches for rebuilding and revitalizing rural communities in the Delta. A number of local organizations, with strong roots in the community, have taken on the formidable task of addressing the problems faced by these communities.

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