Davenport, Iowa Nonprofit Changes Neighborhoods and Lives
Story and Photos by Jonathan Turner
Loan Product: Affordable Housing Loan
Loan Product: Affordable Housing Loan
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One house at a time, a Davenport, Iowa nonprofit – with the help of Bridge Investment Community Development Corporation – is working to transform neighborhoods.
Neighborhood Housing Services (NHS) of Davenport is making a significant impact in improving local neighborhoods. NHS has operated from its current offices off Federal Street in Davenport since 2011. The nonprofit serves both Scott and Rock Island counties, though most of its home rehabilitation work focuses on Davenport, particularly in low-income neighborhoods south of Locust Street. Led by director Brook Hayes Upton, who has been with NHS since 2000, the organization initially focused on historic renovations and grants for home improvements, especially for rental properties. Over the years, NHS expanded into refinancing of contracts and mortgages, but following the 2008 mortgage crisis, the organization shifted its focus. “Our intent was never to compete with the banks, but to fill a gap,” Upton explains. “That gap no longer existed, so we adapted to meet other community needs.” To date, NHS has financed over 200 loans, completed over 70 full home rehabs, and provided more than 2,000 grants and rehab loans to help residents improve their properties. The nonprofit now focuses on vacant property rehab and resale, alongside one-on-one counseling to prepare individuals for homeownership. “Many younger people fear being rejected by banks, they don’t want to try because they are scared the bank is going to say no,” Upton says. NHS partners with local financial institutions to counsel people, including credit counseling, budgeting, determining what they can afford, and deciding if they can afford a home. “We’ve learned that there some people, they don’t want to have to worry about their roof or their furnace,” she notes. “But for those on the cusp who want to be homeowners, we help them get ready, and refer them back to their banks.” The biggest thing in homeowner counseling is NHS helping people understand their credit report, Upton says. NHS partners with Bridge Investment on its REACT program, which rehabs vacant properties and reinvesting in low-income neighborhoods. Together, they’ve developed a model that rehabilitates homes to a high standard, serving people with low-to-moderate incomes or low-to-moderate neighborhoods, raising property values for nearby homes, Upton says. This works to revitalize entire neighborhoods by increasing surrounding property values and getting homes back on the tax rolls. Funding is crucial in closing the gap between the cost of renovation and the sale price, which averages about $60,000 per property. “Overinvestment in properties is part of our mission,” Upton says. “We invest in these properties to get it back on the tax rolls, and spur reinvestment in the surrounding areas, while increasing the value of the properties around it. There’s a significant reinvestment element to doing this, even though we can only take on a limited number of projects due to funding constraints.” To date, Bridge Investment’s loans have enabled NHS to rehabilitate six vacant homes in Davenport. NHS won’t start work on a home until they have all the funds committed, Upton says. NHS primarily relies on grants from area foundations and agencies, including Scott County Housing Council, Regional Development Authority and Scott County Regional Authority. NHS does not use traditional bank loans for the projects. “It’s a model outside of the usual banking framework,” Upton says. The partnership between NHS and Bridge Investment began in 2017, though Upton had known Bridge executive director Brian Hollenback for many years. NHS’s most recent home, a rehabilitation at 825 E. 14th Street in Davenport, cost $189,750. Initially priced at $113,000, the home sold for $165,000. “We aim to increase sale prices, because it increases the value of surrounding homes,” Upton says. NHS rehabs homes where feasible, with a goal of keeping the project gap under $50,000 while noting they sell homes for appraised value. “We want property values to be higher.” In Davenport, Upton notes there is an Urban Revitalization Tax Exemption (URTE), which gives homeowners an exemption for 10 years to not have their property taxes go up. Bridge Investment provided an affordable housing loan, offered at below-market interest, which is vital to NHS’s success. These loans, paid in over the course of the project, help manage costs while ensuring that Bridge Investment will be repaid upon project completion. The rehab work usually takes from six to 12 months. The partnership with Bridge is open-ended, as needed. Upton will approach loan officer Frank Perez and ask if they have funding available. “Bridge Investment has always been such an awesome partner to NHS,” she says. “When we lost our federal funding, we went to a bank where they laughed at our model. We reached out to Brian, who said ‘Yeah, we can do that,’ and the program was born.” NHS’s REACT program is designed to stabilize neighborhoods by rehabilitating vacant homes, which have been a strain on neighborhoods and property values. Upton says the program would not be possible without Bridge’s support and participation. To date, the program has invested $620,162 into the community, with all homes selling either before or within 30 days of completion. “The work that NHS and Bridge Investment has done together has had a tremendous impact on the community,” Upton says. “For small organizations like us, it’s nice to see that is happening. There are organizations that still choose to reinvest in nonprofits like NHS. We’ve all been part of the same affordable housing world.” To learn more about NHS, visit www.mvnhs.org. |
“The work that NHS and Bridge Investment has done together has had a tremendous impact on the community.” - Brook Upton |