‘Nonprofits’ Fill Void to Build Homes in Poor Areas

Jackie Dupont Walker is not a developer, but she and her church’s elders will break ground soon on a $9-million landscaped village for the elderly that will transform the tattered block near the Ward African Methodist Episcopal Church on West 25th Street.

Several miles away, the Westminster Neighborhood Assn. will break ground Tuesday in Watts for 130 attractive townhouses--the biggest low-cost rental project to be built in that struggling area since the Watts riots tore up whole neighborhoods in 1965.

What these communities share is that they have been shunned, by and large, by banks and for-profit developers, despite their critical housing needs.

Stepping into that vacuum are a growing breed of nonprofit neighborhood groups that are out to save their communities.

“We can’t just keep hoping the for-profits will come in to a neighborhood like this, we’ve got to do it ourselves,” Walker said. “You watch programs like ‘Lifestyles of the Rich and Famous’ and you look around at how people in the community are really living, and you get sick, just physically sick, and you have to act.”

Like Boston, San Francisco

No matter how the city tackles its severe shortage of low-cost housing, such neighborhood-based developers are likely to become the backbone of local efforts, as they have in Boston, San Francisco, Miami and other cities. There are already dozens of such groups here, mostly supported by churches, neighborhood organizations and social agencies.

Nonprofits are radically different from most developers. Not only do they build housing solely to help the community, but they do not boost the rents to market levels at some later date, as for-profit developers, who need such incentives, are allowed to do.

If not for millions of dollars in help from the Community Redevelopment Agency, which is paying about one-third of the cost of both the Watts townhouses and the Ward A.M.E. Church’s project, neither would be moving ahead. The rest of the funds come from private investors, foundations and banks, who usually do not take on such projects alone.

Nevertheless, the lion’s share of local funds for such low-cost housing, given out by the CRA and the city Community Development Department, still goes to for-profit developers.

Nonprofits “have to fight for every scrap they get in Los Angeles, right alongside the huge developers,” said Stan Keasling, a housing advocate in Sacramento.

Los Angeles officials are under increasing pressure to follow examples set by Santa Monica, San Francisco, Boston and other cities that give nonprofits political clout and financial strength by making them an integral part of local housing programs. Many cities pay their operating costs and provide free technical support.

“Los Angeles needs to recognize its nonprofits explicitly from here on out,” said Paul Grogan, president of the Local Initiatives Support Corp., a foundation that has built thousands of units of low-cost housing nationwide. “These groups have been activated enormously by the vacuum in affordable housing, and the city can’t afford to ignore them.”

Opened 3 Years Ago

LISC, a Ford Foundation spinoff that opened shop in Los Angeles three years ago without waiting for an invitation, is at the center of Los Angeles’ embryonic nonprofits movement. In training classes, the agency shows neighborhood leaders like Walker how to build their own low-rent housing, then gives the groups one-third of the funds they need.

LISC gets its money from an $11-million fund it has created in California with the help of major corporations, most notably Atlantic Richfield Co. Corporate backers receive sizable tax credits for financing the program, plus the added benefits of philanthropy.

Anita Landecker, local director of LISC, said her staff is “turning social agencies, cultural groups and neighborhood leaders into housing developers who have a personal stake in the very block they’re building on. We think Los Angeles is ready for that.”