The Southeast CDC
When the Southeast Community Development Corporation (Southeast CDC) discovered a lack of quality affordable homeownership opportunities in Southeast Baltimore neighborhoods, they decided to build new housing opportunities themselves. Thanks to their holistic approach to vacant building development, renters in those neighborhoods now have a path to becoming successful first-time homebuyers.
The Southeast CDC is a nonprofit dedicated to making Southeast Baltimore a great place to live. They specialize in community revitalization programs and housing counseling. They provide weekly neighborhood cleanup services, help neighbors fix up blocks and parks, collaborate with city schools, and run recreational programs like Highlandtown’s First Friday Art Walks, among other projects. “I guess you could call us boosters for the community,” says Ali Morris, Southeast CDC’s Senior Manager for Housing Development. “We want to make these neighborhoods livable and have amenities that would attract residents.
"We decided that if we were going to make an impact in those neighborhoods, we needed to get the homeownership rates back up and create stability."
Morris and Southeast CDC’s Executive Director, Kari Snyder, are at the forefront of the organization’s somewhat recent return to residential property development. The Southeast CDC has primarily focused on housing counseling and neighborhood/commercial revitalization since 2000. In response to a homeownership decrease in the Ellwood Park, Baltimore Highlands, and McElderry Park neighborhoods, they resumed vacant property acquisition and renovation work. This is paired with the goal to sell homes at affordable rates to first-time homebuyers from the neighborhoods.
“We decided that if we were going to make an impact in those neighborhoods, we needed to get the homeownership rates back up and create some stability,” says Snyder. “We needed to get some of the speculating and exploitative landlords out, get more homeowners, and reduce the vacancy rates in some neighborhoods.”
One of the biggest challenges they face is acquiring property. Snyder and Morris say that the vacant properties in Ellwood Park, their current area of focus, are all privately owned. The owners are usually unreachable, won’t sell, or they gouge the acquisition price to exorbitant rates. The pair recently spoke with The Baltimore Sun about their struggle. In the article, Morris describes some of these investor-owners as “out-of-town investors who don’t know the market and have inflated the prices. They’re holding on to these houses and they’re waiting for appreciation to kick in and so they’re trying to sell it to us at a profit.”
Both Snyder and Morris say that vacant property receivership provides relief when dealing with unreasonable or hard-to-reach owners. Receivership provides a legal remedy for Baltimore City to force a transfer of ownership when a property has deteriorated to the point that it has become a public nuisance.
“Receivership has helped us in finally acquiring these properties that are hard to track down,” says Morris.
“Having [the properties] go through the receivership process where we can bid on the property with clear title is helpful,” says Snyder. “When an investor-owner won’t sell…and has no intention of renovating, then the only thing we have is receivership and the [court] forcing it to auction through One House At A Time.”
Since they’re selling their homes at affordable prices based on what the neighborhood market can bear (usually around $150,000), subsidy is needed to cover the gap between renovation costs and sales price. That’s why Ellwood Park has seen very few homeownership transactions, says Snyder, because investors want to make a profit and won’t take a loss. Fortunately, the nonprofit has been able to obtain federal and state grants which help cover the acquisition, development costs, and appraisal gaps. “So that allows us to do these projects. Otherwise, vacant houses just sit and continue to deteriorate. We’re able to address vacants and increase homeownership with those grant dollars.”
So far, the Southeast CDC has fully renovated four properties in Ellwood Park, one being a receivership property. Three of the finished homes now have owner occupants and one is under contract and set to close in April 2023. Each occupant is a first-time homeowner. A recent increase in the Southeast CDC’s funds (including ARPA grants and a congressional earmark for the development of McElderry Park) should allow them to scale up their work. Over the next two years, the Southeast CDC plans to build around 40 more affordable homes for Southeast Baltimore residents.
"Our goal is for the buyers of these homes to be residents of the community."
Buyers of these renovated homes have access to affordable loan products and financial counseling through a HUD-certified course focusing on how to manage money, understand credit, obtain loans, and preserve their investment. “Our goal is for the buyers of these homes to be residents of the community,” says Morris. “[This counseling] is important while we are developing in these neighborhoods so residents can become mortgage ready and understand that the price of our homes, and other homes with brand new renovations, are actually a lot of times cheaper than what they’re paying for in rent.” The nonprofit also runs homebuyer clubs where renters from the community meet with housing counselors to prepare for homeownership.
Community and neighborhood preservation is the Southeast CDC’s top priority. Snyder says that they built a community plan with the residents of Ellwood Park who emphasized how homeownership and affordable housing are important to them. “It really isn’t just about the house, it’s about the whole neighborhood,” says Snyder. “At the end of the day, the big goal is to save [the neighborhoods] from exploiting investors…and working very closely with residents to make the neighborhood livable and enjoyable.”
