Millions in housing funds depend on small groups

George Brown III doesn't have to go far from his small, drab office in Grace Episcopal Church to see his handiwork. | Brown's Plumb Line Ministries, a nonprofit development corporation he runs out of the church offices in Norfolk, has built 63 houses for low- to moderate-income first-time home buyers since 1988.

The two-story homes line the streets around Grace Episcopal, clusters of three or four in a row, many now decorated for the holidays. In the 20 years since Brown's father helped start Plumb Line, not one of the company's houses has been foreclosed.

"It's removed a lot of the blight, a lot of the drugs, a lot of the crime. Property values have increased," Brown said. "It's really a pleasant place to live."

Plumb Line is a Community Housing Development Organization - in government-speak, a CHDO (pronounced Cho-doe) - one of four tiny non profits in Norfolk that receive federal funding to oversee the construction of affordable houses for less-affluent families.

While Plumb Line has helped the city improve several blighted neighborhoods, Norfolk and other nearby localities are struggling to gain such successes with similar housing groups. Their existence is important, local officials say, because if they go away, cities could lose thousands in federal dollars.

Each city in South Hampton Roads needs at least one of these nonprofits to exist in order to receive federal funds that pay for homeownership and renovation programs. That's harder than it seems, because the housing groups are usually one-person shops with shoestring budgets that must meet scads of federal regulations, city officials say.

One problem in Norfolk is that the nonprofits are running out of land. In addition, the rising cost of construction makes it difficult for them to build houses that meet the affordability standards, which mandate homes that sell for about $175,000.

The issues have Brown hard at work. Plumb Line, like several other CHDOs in Norfolk, is looking to expand outside its home territory of Central Brambleton, just west of the Norfolk State University campus, where available land has become sparse. He is now weighing the possibility of renovating houses, rather than building new ones.

It's an idea that Norfolk Redevelopment and Housing Authority officials have encouraged.

In addition to helping Brown and others begin to renovate houses, the authority remains committed to working with them to find empty lots to build on, said Stephen Blair, the authority's neighborhood manager for development operations.

"These people are able, competent and effective," Blair said. "It behooves everybody."

Throughout the city, with only one or two employees and payrolls of about $30,000 in good years, CHDOs in Park Place and Berkley have built dozens of homes for low-income families.

The housing authority provides the groups with about $350,000 that they split among themselves. In return, the city receives about $1.4 million in federal money.

Despite their efforts, however, both Norfolk and Portsmouth have seen a CHDO fail in recent years.

In Norfolk, the collapse of Empowerment 2010 has tied up federal money meant for housing. Empowerment 2010, which went out of business this year, helped low-income residents with employment training, housing and small business development.

In Portsmouth, Hampton Roads Affordable Housing's dissolution about a year and a half ago left a partially completed house that another company had to step into and finish.

Meanwhile, Chesapeake is casting about in search of someone to create a new CHDO so the city can be assured of receiving all of its federal funding. The three agencies working in the suburban city have built or renovated four houses and 19 apartments in the past five years.

"We'd like to see more working with us," said Dewayne Alford, deputy executive director of Chesapeake's housing authority. "There are a lot of neighborhood groups that like to see things improved in their neighborhood. This gives them a chance to be a key stakeholder in what goes on in their community."

In response to federal rules developed in 1992 requiring cities to give 15 percent of their federal housing money to CHDOs, Virginia Beach created one citywide group, HOME Inc. It quickly realized the difficulties of artificially producing a community organization just to receive federal money, said Andy Friedman, the city's director of housing and neighborhood preservation.

"Small organizations with uncertain funding really have a hard time being successful over the long term," he said.

But some have made it.

In Portsmouth, the Center for Community Development - now the city's only CHDO - has built or renovated more than 80 houses since 1991 and put $9 million in real estate value back on the tax rolls, said Kimberly Williams, the organization's housing manager.

In return for passing along roughly $100,000 in federal funds to help support the organization that Williams works for, Portsmouth receives nearly $600,000 in federal money. It spends that on programs to renovate the houses of the elderly, assist first-time home buyers and help build housing for the elderly, said Rosylen Oglesby, a management analyst.

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com