February 2008

COMMUNITY DEVELOPMENT CORPORATION OF LONG ISLAND:
Builder of Homes and Dreams

Story by Maureen Traxler
Cover Photo by Miranda Gatewood

Twenty-two lucky Long Island working families won a lottery in December 2006 that changed their lives and gave them the opportunity to become homeowners many in the same Town of Southold where they were born and raised thanks to efforts spearheaded by the Community Development Corporation of Long Island (CDC). At the ground-breaking and ribbon-cutting ceremonies, soon-to-be homeowners joined Suffolk County Executive Steve Levy and Southold Town Supervisor Scott Russell in celebrating this extraordinary project, Cottages at Mattituck.

One of the unique features of the Cottages at Mattituck project is CDC's role as a non-profit developer. President and chief operating officer Marianne Garvin credits the organization's board of directors as "very courageous" in authorizing the expenditure of the organization’s funds to perfect this opportunity. "They felt it was a risk worth taking.'
In addition, to accomplish the task, CDC activated partnerships it had established over its 40-year history of building strong relationships at all government levels and with local and regional business and industry.

Getting the idea off the ground
Following the Town of Southold's passage of legislation creating a new affordable housing district, CDC investigated the possibilities and confirmed that the legislation called for fast-tracking applications, rezoning on a motion from the town board, and providing a density bonus for appropriate development. 'The Town was actively looking for affordable housing in their community,"remarks Garvin, and CDC proceeded with a land acquisition provided by Suffolk County.

Aware of the importance of garnering understanding and support from the community, CDC set up meetings with residents, in coordination with the Town, to present its concept, a project that fits the character of the neighborhood and addresses the needs of young people for affordable housing. They also met with members of the Fire Department, School Board and Chamber of Commerce, and held a six-hour open house at the public library where residents could view the site plan and rendering of the Cottages.

The events built dialogue in the community, Garvin says, and on the day of the public hearing, the room was overflowing with mostly supportive people who spilled out into the hallways. 'It was a grassroots response to a need for housing, and I also believe, people were responding to the fact that we were a not-for-profit.'

The Town Board felt very strongly that local residents should get the greatest opportunity to qualify for houses, adds Garvin. Therefore, during the 8 to 12-months that CDC went through the rezoning and site plan process, the not-for-profit, true to its mission to educate potential homebuyers, sponsored training opportunities that allowed applicants for the Cottages to have a chance to pay down debt, start saving for their down payment and closing costs, and become pre-approved, making them eligible for the lottery. Tapping its banking partnerships, CDC organized a 'mortgage fair'where potential homebuyers went table to table asking the 12 participating banks for their best mortgage product. "The banks were astonished at how well prepared people were,'says Garvin

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"On the day of the lottery to choose our lucky homeowners, the place was mobbed,"recounted Wilbur Klatsky, CDC's chief executive officer. "When we twirled the wheel and Supervisor Russell pulled out the names, everyone in the lottery was pre-approved for a mortgage."

Building homes for the future
The Cottages clearly shows CDC's commitment to the environment and to bringing homeowners savings on operating expenses. Each one-story, two-bedroom, 1,100-square-foot home was built to ENERGY STAR® standards, and includes ENERGY STAR® rated appliances. Partnering with LIPA, CDC was eligible for a $1,500 rebate per home under LIPA's Clean Energy Initiative. To certify the homes as energy efficient, an outside efficiency rater was hired, and determined that the home construction supports a 30% to 40% savings on heating bills.

In addition, CDC's building partner, Lennard Axinn of Island Estates East, ensured that each home was constructed with energy efficient, green building features, and in anticipation of future concerns, the homes are handicap accessible from the street.

Finally, following the belief that these units should always remain affordable, attorneys for CDC and the Town worked to craft covenants and restrictions to protect that provision. Upon a homeowners desire to sell, the Town will ensure that the home goes to another buyer on its Town Housing Registry. CDC received 147 applications for the Cottages. Those families not selected in the lottery will remain on the waiting list.

"The Cottages are a model for other towns,"remarks Klatsky. "We're getting inquiries and will pursue opportunities to replicate the model. The pieces are there to go on a regional basis now."In recognition of the organization's efforts, CDC received the Long Island Builders Institute's Double Diamond Award for its Cottages at Mattituck project.

Building strong communities
"Housing is not a one size fits all,"Klatsky says, and CDC finds opportunities in older downtowns and abandoned buildings. With the Town of Brookhaven and Suffolk County, they participate in a transferal of abandoned properties for rehabilitation and rental or sale at affordable prices. CDC also accepts homes that have been abandoned or taken for tax purposes and rehabilitates them for resale.

"Neighbors are overwhelmed by the transformation…a miracle happens," says Garvin. "We not only provide stability on the block, but also sell at a price new families can afford."

The nonprofit has partnered with for-profit developers on four 55+ projects - 256 units in Port Jefferson, 208 units in Babylon, and 2 phases of 174 and 140 units in Patchogue. The developments include a clubhouse and offer a range of services provided by CDC. Klatsky points out that a survey at the Port Jefferson project showed 80% of the residents had lived within a five mile radius of the project, demonstrating a desire to downsize and remain in the community by moving to a rental unit.

CDC focuses on strengthening traditional downtown communities, and in Freeport, for example, the not-for-profit completed a façade renovation that helped form a 10-building mixed use, commercial/residential site, in which they later took an office. They provide community workshops, too, on topics such as fire safety, planning a garden and driving skills for parents and teens. Annually, 1,000 homeowners make energy conservation improvements to help keep their homes affordable and reduce energy consumption through its "weathering'program. CDC has its own materials warehouse and a CDC crew goes out to make the improvements.

Recognizing that "small business is the engine that drives the economic health of the Island,' Garvin says, 'We are able to stretch the underwriting criteria to make capital available to small businesses by marrying technical assistance with the capital." CDC's Core Four Business Planning Course instructs entrepreneurs in basic accounting and marketing skills and developing a business plan. Klatsky notes that CDC's "second look" program restructures loans referred to them by banks. "In many cases, we close the loan at the bank that suggested the referral." While CDC is a Small Business Administration lender doing "micro loans," Klatsky adds that the not-for-profit is authorized by the State Legislature as an SBA "7A" lender, permitting loans up to $300,000. CDC is proudly designing loans to child care providers in Nassau and Suffolk Counties that have increased the number and quality of openings for young children.

"The Community Development Corporation is increasingly recognized as a go-to not-for-profit that can bring together leaders and shakers to discuss topics and be a catalyst for conversation," notes Garvin. Through its advocacy and leadership in communities, CDC often spots new trends or potential problems. For example, following hurricane Katrina, the nonprofit tapped their partners in the insurance industry and hosted a forum called, Protecting our Future: When a Natural Disaster Strikes, Will We Be Ready? In like fashion, the corporation hosted a Foreclosure Prevention Summit with its banking partners last June before the foreclosure and sub-prime crisis was widely in the news.

CDC team leaders
Wilbur Klatsky, a Columbia University grad with a BS in City Planning, was largely responsible for restructuring of the organization and broadening its activities to include commercial-industrial assistance and housing revitalization. In his "spare time," he serves as mayor of the Village of Shoreham, and pursues his interest in public radio, chairing Long Island's WSHU radio station.

Marianne Garvin serves on the Board of Directors of Habitat for Humanity of Suffolk. She is a member of the Board of Neighborhood Housing Services of America-CDFI, a national community development financial institution providing construction financing to affordable housing developments around the country. She says, "This association allows me to see what is happening in the industry in every state and become familiar with the cutting edge of underwriting criteria to other not-for-profit developers."