Stimulating Responses to the Foreclosure Crisis

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HUD’s announcement on January 14th of the second round of Neighborhood Stabilization Program grants (from the stimulus program) for the acquisition and rehabilitation of foreclosed residential properties is strong evidence of the importance of nonprofits in the nation’s economic recovery. In some cases, regional or national nonprofits got large sums for multi-city or multi-state work, sometimes in addition to their local affiliates getting funding through state or city grants: for example, $137.6 million to Habitat for Humanity International for work in five states and $137 million to Chicanos por la Causa for work in eight states. Among the 60 grant recipients are consortia in which nonprofits have significant design and implementation leadership responsibilities in very creative initiatives:

  • In the Tucson, Arizona, area, a consortium headed by Pima County’s community development department got $22 million from HUD for developing well over one hundred units of housing and establishing a variety of land banks. The nonprofits in this consortium include Habitat for Humanity and the Southern Arizona Land Trust. The grant for the City of Phoenix’s consortium is $60 million, with the participation of nonprofits such as Arizona Acorn Housing, Community Housing Resources of Arizona, Community Services of Arizona, Desert Mission Neighborhoods Renewal, Foundation for Senior Living, Greater Phoenix Urban League, Housing Our Communities, Inc., the local AFL-CIO’s Community Service Agency, the Local Initiatives Support Coalition, the National Council of La Raza, Neighborhood Economic Development Corporation, the National Farm Workers Service Center, and Neighborhoods Housing Services of Phoenix,
  • Milwaukee received $25 million in NSPII funds, which will be used in collaboration with the Milwaukee Foreclosure Partnership Initiative (MFPI), whose leadership includes representatives of the Helen Bader Foundation (as MFPI co-chair) and steering committee members from the Local Initiatives Support Corporation, the Greater Milwaukee Foundation, the Hmong American Peace Academy, and Northcott Neighborhood House. MFPI’s plans include targeted neighborhood marketing and a code enforcement “strike force.”
  • Baltimore’s $26 million grant was to a consortium headed by a nonprofit, Healthy Neighborhoods, Inc., working with the City and with nonprofits such as Saint Ambrose Housing Aid Center, Druid Heights Community Development Corporation, and Chesapeake Habitat for Humanity whose programs include a homesteading model for “young urban pioneers.”
  • Miami’s grant of $89.4 million went to a consortium headed by the Neighborhood Housing Services of South Florida working with nonprofits such as the Little Haiti Housing Association, the Opa-locka Community Development Corporation, St. John Community Development Corporation, and the Urban League of Greater Miami. The Miami strategy sounds like a “promise neighborhoods” concept including after-school care, life skills training, and employment services in addition to targeting over 1,000 homes for redevelopment.
  • The City of Newark is the lead for a $20.8 million NSPII grant covering much of Essex County in partnership with nonprofit developers such as Brand New Day, Episcopal Community Development Corporation, the Ironbound Community Corporation, Make It Right Foundation, Unified Vailsburg Service Organization, and the Community Loan Fund of New Jersey.
  • The consortium grant for New Orleans is almost $30 million to be used by nonprofits including Broadmoor Improvement Association, Central City Collective, Make It Right, NENA, Project Home Again, Pontchartrain Park CDC, Rebuilding Together New Orleans, the St. Bernard Project, and UNITY of Greater New Orleans.
  • Between Little rock and North Little Rock, there will be $15 million for acquiring, rehabilitating, and land-banking properties with the involvement of nonprofits such as Black Community Developers, the Argenta Community Development Corporation, and the local chapter of Habitat for Humanity.
  • Los Angeles Neighborhood Housing Services is the lead entity in a consortium with several cities plus nonprofits such as the Vermont Village Community Development Corporation, Search to Involve Philipino Americans, the Vermont Slauson Economic Development Corporation, and Watts Century Latino Organization with a $60 million NSPII grant.

Many more of the NSPII consortium grants went to collaborations that show the clear stamp of nonprofit community developers’ thinking and leadership.

What is also striking, however, is how many of the NSPII grants, besides those going to groups such as CPLC and Habitat, involve local affiliates or chapters of national organizations. For example, at least six of the NSP grants went to consortia either led by or involving groups named “Neighborhood Housing Services”, typically members of the NeighborWorks network, and we presume many of the other nonprofits in this grant list are also NeighborWorks members. Three cities’ applications have the local offices of the Local Initiatives Support Corporation in key roles. Ten involve local affiliates of Habitat for Humanity.

Perhaps the HUD grant announcement was a bit opaque, but if there is a disappointment in the grants list, it is in the number of states and localities that received NSPII grants with little evidence of the involvement of grassroots, community-based nonprofits. Maybe municipal governments have seriously engaged more grassroots nonprofits than is evident, but rumors from the field indicate that in several places, the community-based nonprofit sector as designers and implementers of foreclosure response strategies is not what it should be.

The NSPII grants demonstrate the importance of nonprofits in leading the nation out of the Great Recession and the importance of nonprofit networks providing back-up training, support, and financing for affiliated local groups. The linkage of community-based nonprofits to national networks appears to help put grassroots groups onto municipal and state government radar screens—and HUD’s as well. But large parts of the nation might not be linked into national nonprofit intermediaries. That puts the onus on HUD to make sure that local and state governments reach out and turn to grassroots groups to make sure that the strategies for acquiring and redeveloping foreclosed properties actually benefit the communities and families that the stimulus was designed to assist.

  • Sarah Greenberg

    In fact, one-third of NSP2 allocations include a member of the NeighborWorks network. 19 NeighborWorks organizations were members of consortium applications that were awarded $548 million of NSP2 funds. Thank you Nonprofit Quarterly for pointing out the critical role of nonprofit organizations in foreclosure response and neighborhood stabilization efforts. I hope to see more coverage of the important roles nonprofits are playing to carry out federal, state, and local responses to the economic crisis.

  • cohenreport

    Dear Sarah: Thank you so much for the note. In previous articles for the Cohen Report and one now at the press in the winter issue of the Quarterly, I’ve written about the excellent role that NW has played in addressing the foreclosure crisis. I think in the spring issue of the Quarterly, you’ll see more stimulus stories written by Ruth McCambridge. Thank you for your useful comments here.

  • Grant in Nashville

    Where does this HUD program stand in 2011? Is this one of the programs with proposed cuts under Obama’s 2012 budget proposal?