A CLOSER LOOK AT COMMUNITY SWEAT EQUITY HOUSING CORP.: THE FUTURE OF CSEH

Copyright 1998 Southeast Missourian

Despite the corporation's financial woes and shaky five-year history, the organizers of Community Sweat Equity Housing are not giving up on what they believe is a worthwhile venture.

"Sweat Equity is not coming to an end," said Michael Sterling, treasurer of CSEH and president of the local chapter of the NAACP.

"We went through our bumps and bruises, but we learned lessons," Sterling said.

Even after CSEH has lost eight properties it once owned and is threatened with the loss of the remaining two, Sterling remains optimistic about the future of the project. He said that the program was being revamped and that he and the CSEH board wanted to acquire more homes and would negotiate to purchase more.

"We're going to hopefully look again to try to rebuild the stock of houses," he said. "Sweat Equity is still a good concept."

The project officially began in 1993 when Cape Girardeau-based CSEH incorporated in Missouri as a not-for-profit organization. Its primary purpose was to bring housing to low- and moderate-income families and to help the families make the transition from tenancy to home ownership.

"We wanted them moving from loanership to ownership," Sterling said.

By the end of the year CSEH had purchased its first home in the northeastern quadrant of Cape Girardeau. Twelve months later, CSEH owned nine additional homes in the city.

Three local banks entered into an agreement with CSEH to help finance the purchase of the homes as a part of the banks' Community Reinvestment Programs. A local real estate broker also joined in the housing effort.

But today, four years after the purchase of the last homes, eight properties have been lost by CSEH, either foreclosed on by the banks or deeded back to the banks in lieu of foreclosure. The remaining two have been threatened with foreclosure if the current tenants are unable to secure financing by the first of December.

"It's still very viable," said Thomas M. Meyer, the real estate broker who was involved with CSEH. "It still has merit."

Meyer worked for over two years managing the properties for CSEH before returning control of the property to the board at the end of last year.

Both Meyer and Sterling agree that there is a need for affordable housing in the Cape Girardeau area for low- and moderate-income families, the type of housing that Sweat Equity was supposed to provide.

"More families need assistance," Meyer said.

Sterling went further, estimating that over 1,600 in Cape Girardeau do not have a decent place to live and that homes are overcrowded with as many as 12 to 15 people living in a single family dwelling.

"The problem is getting worse with some families living like sardines in a box," he said.

Other families are paying up to 90 percent of their income on housing, Sterling said.

Because they believe there is a need for housing in the city, both men agree that an organization like CSEH is important for the community. Where they disagree is on what needs to be done to make CSEH a vital part of the housing solution.

Meyer said that the CSEH board was supposed to set up a committee who would review applicants. The board should have been looking more closely at the applicants, verifying a history of payment and finding a genuine interest in owning property.

"If I were to do it again, I'd work on one or two properties, concentrate on them," Meyer said.

He added that he would have closer contact with the tenants, getting the community to work more closely with the families to insure that they succeed as homeowners. Part of that might include getting the tenants personal finance counseling with the banks to insure that they handled their money in such a way that they could meet their house payments.

Sterling agreed that there was a need to screen potential tenants better. He said that CSEH was looking for people of low to moderate income, especially people who could not afford to purchase a home in the usual manner, but who did have an income coming in regularly so they could make their payments.

Still, he acknowledged that CSEH did not look at the credit history of its potential tenants because CSEH knew that some of the people had credit problems in the past.

But the real problem, he said, was the lack of adequate funds to back up the project. When CSEH continues, it will have to look for other ways to fund the program.

"Next time we'll ask the banks to donate the property," Sterling said.

Dr. Bernice Coar-Cobb, president of CSEH and Sterling's wife, agreed that the major problem that the group ran into was funding. The group, she said, received no grants or other additional funding. All of its operating capital came through the rent which tenants paid on the property.

"As we continue the project, we will seek funding," she said.

Both Sterling and Coar-Cobb said that they would ask people in the community for donations to help the project along.

"We would have accepted donations (in the past) if people came forward," Coar-Cobb said.

But CSEH has never received federal tax-exempt status. Thus, those contributing to the organization could not claim the donations as a charitable contribution on their federal income tax return.

Neither Sterling nor Coar-Cobb are discouraged by the bumps and bruises that CSEH has experienced in its five-year history. In fact, Coar-Cobb stated that things have been running much smoother since Meyer returned managerial control of the property back to the CSEH board last December.

She acknowledged that the board itself has not been meeting regularly this year, but that she and Sterling have been "taking care of everything."

"The concept was good. We still think it can work," she said.