Gone are the days when Uncle Sam footed most of the bill for affordable housing.
Public financing is scarcer as the need for cheaper homes is greater. Nonprofits trying to provide accommodations that low- and moderate-income people can afford to buy or rent have increasingly turned to the people who spend their time trying to turn a profit - developers and bankers.
"More and more of what's going on in community development has come from the private sector market," said Clarence Snuggs, Baltimore office director for the Enterprise Foundation, a national neighborhood revitalization group based in Columbia. The foundation has built or renovated 144,000 homes since it began in 1982.
The foundation is holding its annual conference at the Baltimore Marriott Waterfront Hotel today through Friday, and its theme, "Reinventing Community Development," reflects the slow shift in financing affordable housing.
"Everybody's had to be more creative," said Chickie Grayson, president of Enterprise Homes Inc., a development arm of the foundation. "I think almost every development we do has private financing in it."
Enterprise Homes joined with A&R Development Corp. to create Heritage Crossing, a community of 260 townhouses and semi-detached homes in West Baltimore that replaced two public housing apartment towers. Construction was completed in the summer of last year at a cost of about $47 million, financed by the federal HOPE VI program, the state, the city, Fannie Mae and Bank of America.
"You basically try to put together as many sources as you possibly can, which results in developments having eight to 10 sources of funding," Grayson said. "It's harder to put it all together."
Stockton Williams, vice president for public policy at the Enterprise Foundation, said new partnerships are good but that he is distressed by the waning role of government, whose participation he considers critical.
Federal financing for affordable housing has been slowly decreasing for years, he said. According to the National Low Income Housing Coalition, the Department of Housing and Urban Development's budget decreased by about 40 percent from 1976 to last year after being adjusted for inflation.
"We are barely keeping pace with the number of affordable homes that we lose every year to abandonment and conversion to market-rate housing, let alone making a dent in the housing needs that we have," Williams said. "One in seven households in the country - one in seven - pays more than half its income for housing or lives in substandard conditions."
He's discouraged that the Bush administration has proposed eliminating financing for the HOPE VI program, which has an annual revitalization budget of about $450 million. The money is used to repair or replace the old public housing high-rises "that are the locus of so much crime and misery in low-income neighborhoods," Williams said.
The House and Senate want to continue financing the program in fiscal 2004, but with much less than the current funding.
Competition is stiff among developers for federal grants and tax credits that help them build homes low- and moderate-income people can afford. Houses that would usually rent for $1,000 a month can be available for half that amount because of the subsidies, said Jeffrey Hettleman, a partner and executive vice president with the Shelter Group in Baltimore. Meanwhile, development costs are rising.
"We have to find ways ... to do even more with less," said Hettleman, whose firm develops and manages both market-rate and affordable housing projects.
Last year Baltimore's federal community development block grant was reduced by $1.6 million, said Douglass Austin, deputy commissioner of development for the city's Department of Housing and Community Development. But the need for revitalization is greater, he said, because the number of abandoned and vacant homes in the city has risen from 14,000 to 16,000 in the last few years.
Developers aren't doing enough affordable housing work to make up for the reduced federal funds, but the city is considering ways to change that.
Heritage Crossing, an example of private and public money working together, sits off Martin Luther King Junior Boulevard and Pennsylvania Avenue, a vision of suburbia in the middle of the city.
Two-thirds of residents in the mixed-income community bought their homes, which ranged in price from $70,000 to $130,000. The rest rent low-income homes.
Mary Holmes, 75, who lived for 23 years in the George B. Murphy Homes complex, which was torn down to make way for the community, is delighted with her new one-bedroom townhouse. It's a quieter life. The drug dealers that hung around Murphy haven't come back, she said.
"You know, this is a lot better," said Holmes, walking in the neighborhood this week in the unseasonably warm weather. "People stop you on the streets - `You live here?' `Yes.' `Oh, it is so beautiful!' "