SACRED HEART SOUTHERN MISSIONS HOUSING CORPORATION:
DEHON VILLAGE PLANNED DEVELOPMENT
IN WALLS, MISSISSIPPI

Sacred Heart Southern Missions Housing Corporation is a ministry of Sacred Heart Southern Missions, Inc., a nonprofit Catholic organization that has served the nine northern counties of Mississippi since 1942. Since its establishment in 1992, Sacred Heart Southern Missions has been working holistically to promote and develop affordable housing for low- and moderate-income families in its service area.

One such project is Dehon Village Planned Development. A complex of 38 detached single-family rental units, a community center, and a playground, Dehon Village provides needed affordable housing for many low-income families in Walls, Mississippi. Dehon Village is the first project undertaken by Sacred Heart and was responsible in part for spurring the creation of the housing ministry. This housing was initially developed to rescue near destitute families living at the edge of a cotton plantation from becoming homeless. While the project has had several challenges to overcome, it has helped Sacred Heart learn from these experiences and grow into a successful housing nonprofit. It is highlighted here as a model project for precisely this reason. The Sacred Heart story provides many lessons for small, new nonprofits in the Delta on how to overcome myriad obstacles and develop the necessary capacity to become a successful low-income housing developer in this region. It also highlights the importance of taking a holistic approach to helping families and building a community rather than just housing units and to creating new programs in response to the needs identified rather than trying to fit families into one established housing development program.

Overview of Target Area¹⁰

DeSoto County is the fastest growing county in Mississippi and the Memphis metropolitan area. Memphis, Tennessee is the nation’s fifteenth largest city and has grown to become the center of culture and commerce for the Mid-South area. A strategic location has helped Memphis become the distribution center for multi-regional markets located in the Southeast, Southwest and Midwest. In fact, as of 1999 over 200 of the Fortune 500 companies were located in Memphis. With its close proximity to Memphis, DeSoto County too is experiencing rapid growth in the residential, commercial, and industrial sectors. DeSoto County’s population increased over 50 percent from 1970 to 1980, and 25.9 percent from 1980 to 1990, when it grew from 53,930 to 67,910. The Census reports that the county’s population grew to 83,567 in 1995.¹¹  Mississippi Power and Light officials estimate that three families per day move into DeSoto County, adding that it sets more utility meters in DeSoto County than in any of the 45 counties it serves. Interestingly, this growth is not reflected among the black population in the county. The black population has actually declined by 9.5 percent between 1980 and 1990. (See Figure 2.1.) As in other Delta counties, the dependency ratio is high for the black population and is nearly twice that for the white population according to 1993 Census calculations.¹²  (See Figure 2.2.)

Figure 2.1.  Population Decline from 1980 to 1990 by race

Figure 2.2.  Dependency Ratios in DeSoto County by race, 1990

The substantial population growth of DeSoto County has been further encouraged by the widening of major highways and new road construction projects by the State of Mississippi. DeSoto has also been affected by the construction work and new jobs created by the casino industry in Tunica County, which is located directly to the south. A lack of housing and shopping in Tunica County forces many of the casino industry employees to commute from DeSoto. In fact, some studies on the Delta prefer to exclude DeSoto from their analysis because it is atypical. These studies argue that despite DeSoto’s status as a Mississippi county, it is linked to Tennessee rather than Mississippi, to metropolitan Memphis, rather than the rural Delta.¹³

The median household income is $41,241, which is extremely high owing to the economic growth in the area and the influx of people commuting to Memphis and Tunica County for employment. Poor DeSoto County residents live against this background of economic prosperity. A significant number of people have been left out of the benefits afforded by this new growth. They are often remnants of the victimization perpetuated by the system of segregation, sharecropping, and lack of opportunity. Census estimates for 1995 report that 8.8 percent of the population in DeSoto County lives below the poverty line. This figure is consistently higher for the black population. This section of the population earns less than half the median income for the county, and is adversely affected by the rising prices of housing, land, and construction. Sacred Heart focuses on serving these very low- and low-income people by striving to improve their housing conditions.

The Dehon Village project is located in Walls, a small unincorporated community near U.S. Highway 61 in the northwest portion of DeSoto County. The backdrop for this project is comprised primarily of wooded pasture land and agricultural row cropland. A few residential projects are located nearby. U.S. Highway 61 provides direct access to Memphis in the north and the Mississippi Delta agricultural region to the south. State highways intersect this road, providing linkage to the growing communities of Horn Lake, Southhaven, and Olive Branch to the east. The majority of traffic to and from Tunica, located approximately eight miles south of Walls, utilizes either Highway 61 or the state highway.

Launching Dehon Village

The concept for developing Dehon Village grew out of an urgent need in the community. A group of seven sharecropper homes located at the edge of a cotton field behind the administrative offices of Sacred Heart Southern Missions were condemned by the Mississippi Health Department. These homes were in fact shacks with dirt floors, no running water or sewer facilities, and no electricity. However, their residents had occupied them for years. The Health department decreed that these homes were not fit for habitation and decided to evict their occupants without any plans for their relocation. This act would render the near-destitute families homeless. Sacred Heart could not watch this happen literally in its back yard, so it decided to intervene and help the families. This was the beginning of Sacred Heart Southern Missions Housing Corporation (SHSM) and the launching pad for its housing program.

The first step involved getting the Health Department to delay its eviction proceedings against the seven families. Next, Sacred Heart purchased the land the families currently lived on by offering the owner a generous sum of money. Often in rural parts of the Delta where land ownership is concentrated in the hands of a few, obtaining land for the development of affordable housing for low-income people is a near impossible venture. Wealthy farmers, sometimes clinging to an idea of the "old South," refuse to sell land they own for the development of low-income housing, particularly since the low-income populace is often African American.¹⁴ In this instance Sacred Heart was fortunate to obtain cooperation from the landowner.

Sacred Heart then proceeded to get permission from the County Commission¹⁵ to install seven mobile homes on the site. These mobile homes needed to be hooked up to water and sewer services. There was no municipal water or sewer facility in Walls at that time. Sacred Heart solved the immediate crisis by connecting the trailers to its own water tank and septic system on a temporary basis. The next step involved creating a water authority. Sacred Heart simultaneously began working on securing permission to build decent houses for these families. This presented another hurdle. The County Supervisors refused to grant permission for the construction of "multifamily" housing. It was unclear whether the Supervisors objected to the rental housing itself or the potential occupants of this housing, according to nonprofit staff interviewed for this case study. Ultimately, a private developer sought and managed to secure permission to construct market-rate rental housing in the county. Once the Supervisors sanctioned the private development, they could no longer legitimately block Sacred Heart’s development proposal. The County gave its approval with the caveat that the housing constructed would be single-family detached units. With approval in hand, Sacred Heart began the process of developing eight housing units. An unexpected advantage of having the beneficiary families living on the site in mobile homes was their ability to serve as security guards for Sacred Heart. Watching the process of housing development unfold helped the families cultivate a tremendous pride of place and they were extremely diligent about protecting the property.

An essential part of this process was preparing the families for the new homes they would occupy. Sacred Heart staff worked closely with the families, focusing on community building. An effort was made to involve each family in as many decisions as feasible. Sacred Heart conducted classes on housekeeping and home maintenance and provided in-depth budget counseling. In fact, Sacred Heart staff worked on every small detail with the families. They even helped the families select and purchase furnishingss to prevent them from accumulating debt and injuring their credit. This process took several years. It began in 1989 and the families eventually moved into their homes in 1995.

As a result of this process, Sacred Heart Missions came to realize that housing was a very important issue for the people it served. Housing needs in the area could not be effectively addressed as an outreach project of the social ministry. Consequently, Sacred Heart Southern Missions Housing Corporation was created in 1992 as a subsidiary corporation of the larger mission and a housing coordinator was hired. Sacred Heart wanted to take a proactive rather than reactive approach to addressing the housing needs in its region. The housing corporation decided to build an additional 30 detached rental units adjacent to the original eight. The project was funded through a complex mixture of tax credits and private bank loans, typical of a tax credit project. (See Figure 2.3 for an outline of the project’s financing.) A local bank, Union Planters Bank, purchased the tax credits and along with a housing consultant helped package the deal.

Dehon Village grew to be a 38-unit planned development made up of a mixture of two-, three-, and four-bedroom units with a playground and a community learning center.

All the units in the complex are reserved for low-income families. In fact, many of the families in this complex actually earn 10 to 15 percent of the median income for the county. A number of the tenants have minimum wage jobs or receive public assistance. Market rents in the area are very high because of the recent housing boom: a two-bedroom unit costs almost $600. Average rent collected by Sacred Heart from Dehon Village residents is $175. The difference is made up by subsidy from the federal HOME program and private donors.

Beneficiary families are required to participate in education programs at the community/learning center. Some amount of community service is also required, such as weeding. This helps Sacred Heart defray some of its maintenance costs and builds a sense of community among the residents. The educational programs conducted at the learning center help steer families towards greater self-sufficiency. Sacred Heart has hired a full-time director for this center in order to focus energy on helping resident families develop marketable skills.

Another critical ingredient of the success of this project is that in addition to a property manager, Sacred Heart also has a full-time social worker at Dehon Village. The social worker helps at-risk families, works on conflict resolution, and is able to address issues as they arise before they attain crisis proportions. For instance, some of the families residing in the project have never had neighbors before. The social worker helps these families adjust to a neighborhood setting and prevents friction from occurring between families over something as innocuous as loud music.

Sacred Heart is a firm believer in this holistic approach to housing. The executive director sums up its philosophy: "When we provide a home for our families, we want families to have all of the responsibility that comes with this, and all of the opportunity."

Figure 2.3: Some of the Favorable Financing Obtained for the Dehon Village Project

Lessons Learned and Replicability

Securing rental assistance for the area’s families poses a major challenge. Northern Mississippi has very few Section 8 certificates: in early 1999 there were a total of eight certificates available for use in all of DeSoto County. Mississippi has its own tenant-based assistance program through the U.S. Department of Housing and Urban Development’s HOME Investment Partnership program (HOME) funds. However, there is a two-year limit to obtaining assistance through this program. At the time this study was conducted, approximately 40 percent of the units were receiving tenant-based assistance. The rest had exceeded the two-year limit.

One of the challenges faced by Sacred Heart was maintaining high levels of occupancy in the Dehon Village units. At one point, several units were vacant. Applications for Mississippi’s tenant-based assistance program are processed by the Mississippi regional authority on a yearly basis. Families that missed signing up for a cycle of funding had to wait almost six months before they could get on the waiting list for the program. Often families lost interest or found other alternatives to meet their housing needs. Consequently, the regional authority’s bureaucratic process caused a vacancy rate as high as 33 percent in Dehon Village. As a result, Sacred Heart was incurring a deficit of $4,000 to $5,000 monthly. In addition, it was turning away needy families. This situation prompted Sacred Heart to institute some policy changes.

It decided to accept families that would pay 30 percent of income for their units and forego the tenant-based assistance. Sacred Heart then worked hard to identify donors that could help make up the difference. Its efforts paid off and it managed to find a donor that would help cover costs for five years. Sacred Heart will have to find another alternative to assist with costs after the five-year period. While Sacred Heart managed to solve its immediate problem, it does not feel this is an ideal alternative because it absolves the government of what Sacred Heart staff believe is its responsibility. More recently, at the time this study was conducted, Sacred Heart has received notification that the tenant-based assistance program is going to be terminated, adding to the challenges it faces.

Another lesson Sacred Heart learned was to pay greater attention to location. The project is currently located near a railroad track and is almost seven miles from any amenity. Dehon Village residents would have preferred better access to amenities.

Conclusion

Experience developing Dehon Village has led Sacred Heart to identify other housing needs within the community they serve. In response to these needs, Sacred Heart has created a housing counseling program and a revolving loan fund to provide mortgages to families that do not qualify for standard bank loans. Sacred Heart’s housing counselor works with the families and prepares them for obtaining a loan from Sacred Heart. This low-interest loan covers downpayment and closing costs and has to be paid back through a balloon payment in two to five years depending on when the family is eligible for a conventional loan. The housing counselor continues to work with the families throughout this period and helps them secure conventional loans.

The loan fund is capitalized through alternative investments made by religious communities. The investment funds are provided interest-free for the first five years and then at a 5 percent interest rate over the next ten years with principal payments made every five years. The first investor in this fund has recently renewed its commitment, so Sacred Heart is confident of maintaining its program. At the time this study was conducted, Sacred Heart had $450,000 in outstanding loans to families and only one default during the four years this program has been operational.

Sacred Heart staff firmly believe that intensive housing counseling is an essential component of a successful affordable housing program. Helping families address credit issues and guiding them through budgeting and home maintenance has helped Sacred Heart maintain low default rates on its loan program. More importantly, it has helped families adjust to their new roles as renter or homeowner. In order to implement the level of counseling activity required, Sacred Heart applied for and was granted $35,000 from the Department of Housing and Urban Development in 1997. The following year HUD cut their funding by 85 percent to only $5,000. Despite this, Sacred Heart did not reduce its services. Instead it identified other funding sources to continue its counseling program. This demonstrates the importance the organization accords this aspect of its housing service delivery.

Sacred Heart also stresses the importance of building and nurturing relationships in the community. Over time, the organization has built up credibility and name recognition among organizations that can assist Sacred Heart deliver its services, such as state agencies and local banks.

Projects like Dehon Village are feasible to replicate in other parts of the Delta. The challenges vary depending on the area picked as a site for locating such a project, but they can be surmounted. The biggest challenge remains identifying adequate subsidy dollars to effectively serve a very low-income population. Clearly, it is not possible to serve the poorest of the poor if the nonprofit has to rely on rent income to cover its expenses. Targeting a population earning as low as 10 percent of median income requires creative planning, partnerships, and sources of grant funds.

How to develop capacity is probably the biggest lesson Sacred Heart has to offer other fledgling nonprofits in the Delta. Sacred Heart’s story demonstrates how it is important to start with a small manageable project and see it through by tackling each obstacle as it arises. There will always be hurdles to cross. Overcoming these obstacles helps the nonprofit develop capacity and skills, and solidifies its strength to continue work in the face of severe difficulties and even outright opposition. Personal counseling for the beneficiary families is a crucial ingredient to ensuring the success of a low-income housing project. Overcoming past credit problems and teaching families to budget their resources effectively, particularly when there is no spare income, is a tremendous challenge that can take several years to address. There are no short cuts. Sacred Heart’s staff asserts that change happens slowly and developing capacity takes persistence and time.

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