In the final installment of Surviving Uncertainty, we’re taking a look at the struggles being faced as the demand for affordable housing increases. As federal reserves dry up and lending institutions pose roadblocks, many organizations are being forced to think outside the box. In part one of Community Development Groups Face Uphill Battle, we  gain insight from two non-profit development organizations into how their administrators are tackling tough issues. Part two will be published in our January issue of VOCES, available January 5th of 2011. Please visit our Facebook page at www.facebook.com/razafund to continue the discussion on these topics, and offer your feedback on the key issues affecting our communities.  



With the housing crisis manifesting itself in short sales and foreclosures, and our national unemployment rate still high, the housing market is showing little signs of improvement. The financial health of the Southwest has been hit particularly hard, especially in the once booming states of California, Nevada and Arizona.

Non-profit community development organizations such as Visionary Homebuilders of California in Stockton and The Unity Council in Oakland are struggling to adjust to the realities of these hard times. With so many people losing their jobs and their homes, demand for affordable housing has never been stronger.

Hud-approved Visionary Homebuilders plans to complete some housing projects, but a major focus of its work is offering free workshops to worried Stockton homeowners.  In a city where 9.5% of homes are in various stages of foreclosure, Stockton holds  the highest foreclosure rate in the country.

Unity Council, which has just signed a deal with the City of Oakland to build 275 units of low income housing on land acquired from the Bay Rapid Transit District, is seeking state and federal funding for the development in an area of high unemployment.

The housing bubble burst in Stockton in 2007. Its population, according to Carol Ornelas,  CEO of Visionary Homebuilders, jumped 14% from 2000 to 2005 as Bay Area residents sought cheaper housing. Her organization has built homes for 500 families and provided apartment living for 1,000 renters.

Many families who had low-paying jobs in Central Valley agriculture also bought homes. Agriculture was Stockton’s number one industry. Construction was number two. “Building has come to a total halt,” Ornelas said. “Lending institutions and big banks have frozen lending. City government is on the verge of financial collapse.” It is not surprising, therefore, that many residents are seeking advice. Ornelas calls that providing them with “a soft landing.”

In mid-November, for example, 300 people turned up despite the rain at the Cathedral of Annunciation to get advice at a “rescue fair” sponsored by Bank of America, the National Council of La Raza, and Visionary Homebuilders. Other worried people walk in off the street to Visionary Homebuilders offices on North San Joaquin Street, where the organization has a sign on the sidewalk reading “Free Foreclosure Prevention Workshops: Se Habla Espanol.”

At a Starbucks nearby, two anxious women sat at a table with their mortgage loan documents waiting for their husbands to join them.They said their families were struggling with big financial responsibilities in a year when their husbands lost their jobs in food processing plants. Arlene Mora said her mother has had to enter a San Joaquin Valley hospice. Zerlina Perez said her daughter, Veronica, is enrolling at the University of the Pacific campus in Stockton. A second daughter wants to study nursing.

Stockton’s 17% unemployment rate is much higher than the statewide average of 12%. Along with joblessness came a second plague: the fifth highest rate of murders in the nation. In a city of 275,000 people, there are 125 different gangs in Stockton, according to Ornelas. 

“We not only need good advice,” Perez said. “We need prayer. We have missed two payments on our house. It is not a big place. But six of us live there. My nightmare is that we may soon be living on the street. My daughters talk about enlisting in the Army.”

Mora said, “My husband has worked all his life. He is too embarrassed to admit to most people that he is unemployed. I had to ask his mom to tell him to file for unemployment. We had an offer on our house but if we took it (in a short sale) we would still owe the mortgage company big money.”

Mora said she paid $305,000 for her home in 2006, but now it is worth less than $150,000. She tried refinancing, but the bank said no. Her husband lost his job. The couple ran up huge credit card debts. She babysat to raise funds. He tried to repair neighbors cars at home.

“If we knew in 2006 what we know now, we would have just been renters,” she said. Ornelas admitted that although Visionary Homebuilders has been hit by declining funding, she believes that in 2011 they intend to offer more affordable housing. "In the next tax credit round we’ll see some financing,” she said. Her organization has purchased an apartment complex which will be refurbished, and will also be breaking ground soon on new family housing downtown.

“It is easy to spin your wheels at this time,” she said. “You have to look at your core and have a strategy for coming out of this. Stockton is a disaster zone. There is total devastation here. I’ve been thinking that night court for bankruptcy cases should be obligatory. Bankruptcy in this day and age is not necessarily a bad thing.”

Continue reading the second half of Community Development Groups Face Uphill Battle in the January issue of VOCES, debuting January 5, 2011. Learn how Gilda Gonzalez, CEO of the Unity Council has overcome some of today’s challenges in community development.