Pittsburgh Activist Laid Groundwork
The Concept Takes Hold Nationally
Formalized by Congress
The 1980s: Private Investment, Practitioner Training, and Innovation
The 1990s: A New Director and a Boom in Homeownership Creation
30 Years of Serving Local Communities

NeighborWorks America Today

Pittsburgh Activist Laid Groundwork

The roots of the NeighborWorks system go back to a resident-led, 1968 campaign for better housing in Pittsburgh, Pennsylvania's, Central North Side neighborhood. Dorothy Mae Richardson, a homemaker and community activist, enlisted city bankers and government officials to join with her block club to improve her neighborhood. Together, they persuaded 16 financial institutions to make conventional loans in the community; a local foundation capitalized a revolving loan fund. They rented a trailer, hired staff, and named the effort Neighborhood Housing Services.

In 1970, the Federal Home Loan Bank (FHLB), under the direction of Preston Martin, concluded that savings-and-loan officers needed special training in lending in older, urban markets. These trainings were led by Bill Whiteside, who soon discovered that the accomplishments of NHS of Pittsburgh could serve as a model for the rest of the country. The FHLB trainings continued around the country, but, more and more, they turned into workshops for starting other Neighborhood Housing Services organizations, now referred to as NeighborWorks organizations.

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The Concept Takes Hold Nationally

In 1973, President Nixon prepared to announce a moratorium on federal housing programs. To help soften the announcement, the Department of Housing and Urban Development (HUD) entered into a handshake agreement with the FHLB on a five-year initiative to expand NeighborWorks organizations across the country. The initiative would be coordinated by a specially created Urban Reinvestment Task Force, for which HUD would provide the funding and the FHLB would provide the staff. The HUD-FHLB partnership was expanded the next year to include the Federal Reserve, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.

Limited access to funding for the NeighborWorks organizations' revolving loan funds threatened the network's effectiveness and further expansion. At the time, private foundations were practically the only resource. Then Congress enacted the Community Development Block Grant (CDBG) program, and provided that CDBG grants could capitalize NeighborWorks loan funds. In 1974, NHS partners in Oakland conceived of a national loan-purchase resource that would buy loans from local NHSs, thus replenishing their local loan funds. They named it Neighborhood Housing Services of America (NHSA). Its initial funding came from the Urban Reinvestment Task Force.

The Federal Home Loan Bank established the Office of Neighborhood Reinvestment in 1975 with Bill Whiteside serving as its first director. A year later, the office expanded to 14 staff members working with NHSs in 45 cities. The new entity established regional offices in Boston, New York, Atlanta, Kansas City, Cincinnati and San Francisco to support the growing NHS network.

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Formalized by Congress

In 1978, Congress institutionalized the NHS network by establishing the Neighborhood Reinvestment Corporation to carry on the work of the Urban Reinvestment Task Force. [In April 2005, the Corporation began doing business as NeighborWorks America.] The Congressional act (Public Law 95-557) charged Neighborhood Reinvestment with promoting reinvestment in older neighborhoods by local financial institutions in cooperation with the community, residents and local governments. Bill Whiteside was named executive director. The act defined Neighborhood Reinvestment's mission as "revitalizing older urban neighborhoods by mobilizing public, private and community resources at the neighborhood level."

In their first decade, local organizations concentrated on perfecting their core services for owner-occupied housing in their initially targeted neighborhoods. Pittsburgh's NHS staff, for example, helped Central North Side residents with referrals to reputable contractors, follow-up inspections to assure work quality, counseling and assistance in securing work-related financing, referrals to participating financial institutions for credit-worthy clients, and custom-tailored loans from the NHS's loan fund for others.

But blight and decay infected whole swaths of territory, including apartment buildings, shopping areas, and rural communities. So local organizations adjusted their strategies by expanding into additional neighborhoods and adding new programs. Neighborhood Reinvestment staff helped devise new programs, such as revitalizing distressed apartment buildings and shopping areas, promoting homeownership, and training jobless youth in home construction.

In the meantime other communities formed new NeighborWorks organizations, and rural communities experimented with adapting the model to their areas. Soon, almost half the local organizations had expanded their core services beyond rehabbing owner-occupied housing.

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The 1980s: Private Investment, Practitioner Training and Innovation

In the early 1980s, network organizations were beginning to see themselves as lasting institutions, assuming long-term responsibility for neighborhoods in need. Then double-digit inflation and sharp drops in state and federal resources combined to pose a formidable threat.

Fewer residents were bankable; soaring demand drained NeighborWorks loan funds; and even raising operating funds became a challenge.

Selected insurance companies that Neighborhood Reinvestment had been gradually bringing into the NeighborWorks partnership provided key support. Insurance executives, for example, had been experimenting in Chicago NeighborWorks neighborhoods, testing out new insurance products and marketing strategies. Nearly $30 million in below-market insurance company commitments were secured to expand NeighborWorks lending throughout the network.

Major financial institutions and corporations provided other crucial support. Together, the commitments enabled local NeighborWorks organizations to continue and even accelerate their neighborhood revitalization work.

Local organizations, searching for broader public support, learned the media value of selected projects, such as major in-fill housing, owner-built homes, and massed-volunteer neighborhood painting projects. Local organizations in 1984 gained further visibility as part of a national network in the first Congressionally proclaimed NeighborWorks Week (then called Neighborhood Housing Services Week). President Ronald Reagan signed a proclamation calling for a national observance of the week in a special Oval Office ceremony.

Even as some local organizations were struggling to survive, others were experimenting with adapting the European concept of mutual housing to American neighborhoods. Mutual housing, a variation on the cooperative-housing model, was seen as a strategy for providing reliable affordability for a community's ongoing renters. Alameda Place in Baltimore became the site of the network's first mutual housing association demonstration.

For the country's burgeoning homeless population, NeighborWorks organizations also pursued single-room occupancy and transitional-housing projects.

The Ad Council worked with Neighborhood Reinvestment to create a new identity for the NHS network and "NeighborWorks" was born.

As the complexities of revitalizing neighborhoods continued to grow, network executive directors, board members, and key staff could keep pace through Training Institutes, which Neighborhood Reinvestment launched in 1987. The institutes further professionalized available network training opportunities

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The 1990s: A New Director and a Boom in Homeownership Creation

When Bill Whiteside retired as executive director of Neighborhood Reinvestment in 1990, he left a legacy of 20 years in building a national network of 161 community-based organizations. George Knight, a community development practitioner, succeeded Whiteside as executive director.

Network organizations moved toward still greater professionalism in the early '90s with Neighborhood Reinvestment's move to charter qualified local efforts. Chartering, among other things, confirmed an organization's financial stability and its partnership with residents, government officials, and business. Rutland West NHS of rural West Rutland, Vermont, became the first NeighborWorks organization to receive a Neighborhood Reinvestment charter in 1993.

As the 1990s unfolded, Neighborhood Reinvestment increasingly was able to attract investments from national financial partners. To harness the investments, it developed a series of new programmatic strategies in homeownership, asset management, community organizing, resident leadership, and access to affordable financing and insurance products.

In the first effort in 1991, Neighborhood Reinvestment facilitated the launch of RNA Community Builders Inc. This alliance of rural NeighborWorks organizations banded together to find creative ways of addressing rural housing concerns and increasing the focus on organizational resources for rural development.

In 1992, 20 NeighborWorks organizations came together and launched the NeighborWorks Campaign for Home Ownership. The initial, 1993-97 campaign grew to involve more than 100 organizations, assist 15,880 families into homeownership, and attract more than $1.1 billion in total investments. A second, five-year campaign was launched in 1998.

Out of the campaigns emerged two nationally recognized strategies. One was Full-Cycle Lending, an innovative, comprehensive system of pre- and postpurchase homebuyer education and flexible financing products. The other, NeighborWorks HomeOwnership Centers, offers in a convenient, retail location, all the services and training that customers need to locate, purchase, rehabilitate, insure and maintain a home.

In 1994, the National Insurance Task Force was organized to help the insurance industry and community-based organizations better understand each other. Community residents were able to explore the difficulties they faced in obtaining affordable property insurance, and the industry was able to refine its marketing approaches.

To enhance the role of residents in revitalization, in 1996 Neighborhood Reinvestment began developing a series of initiatives that focused on community organizing, strengthening neighborhood associations, developing resident leaders, and building capacity in communities. The series, in time, evolved into the Resident Leadership Initiatives.

The last year of the millennium was a banner one for Neighborhood Reinvestment and the network. The NeighborWorks Multifamily Initiative was created to increase organizations' capacity to take on new housing development by attracting additional public and private investment, strengthen their asset-management systems, and help them develop resident leaders. NHSA celebrated its 25th anniversary and achieved from Standard and Poor's AA rating for its $75 million collateralized mortgage bond that was fully subscribed at issue. And, for the first time, Neighborhood Reinvestment hit the $1 billion mark for annual direct investment in distressed communities.

The late 90's also saw the organization move into the digital age, as a new Neighborhood Reinvestment/NeighborWorks Web site began to capture the successes of the NeighborWorks network, promote Training Institutes, and made available for download many Neighborhood Reinvestment publications, including NeighborWorks Bright Ideas Magazine.

George Knight retired in 2000, after a decade of leading Neighborhood Reinvestment and the network toward increased productivity. He ended his tenure by underscoring the importance of community partnerships. In a farewell message to community development practitioners assembled at a Neighborhood Reinvestment Training Institute in Pittsburgh on August 16, 2000, Knight remarked:

"Effective long-term solutions are local, require local leadership, locally directed flexible capital and local organizations. It can't be said enough — residents, in local partnerships, backed up by skilled community development practitioners, if given the resources, will be far, far more effective at solving their problems and reaching their potential."

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30 Years of Serving Local Communities (View 30-year anniversary Video, Windows Media Player 10 or above required)

Neighborhood Reinvestment began the new millennium with a new executive director, Ellen Lazar. An attorney and seasoned professional in the field of community development, Lazar laid the groundwork for the organization's near-term future: a five-year corporate strategic plan focused on building the capacity of the NeighborWorks network, while moving the Corporation toward the vanguard of community development.

The second five-year NeighborWorks Campaign for Home Ownership exceeded its goals when it came to a close at the end of 2002, with 47,648 new homeowners, $4.5 billion in total investments, and 272,976 homebuyer counseling participants. Of the new homeowners, 94 percent purchased their home for the first time. A new five-year NeighborWorks Campaign for Home Ownership began in 2003 with a goal of creating 50,000 new homeowners, including 30,000 minority homebuyers.

When Neighborhood Reinvestment celebrated its 25th anniversary in August 2003, Ellen Lazar commented:

"We have a come a long way from those days in Pittsburgh in the late 1960s when the first Neighborhood Housing Services established by Dorothy Richardson and her neighbors ran operations from a mobile home parked in the neighborhood. Over these past 25 years, the NeighborWorks system has been in the vanguard of the community development field. We have created and tested many innovative models to meet the often-daunting challenges confronting our communities. Through it all — at the heart of all of our programs and projects — are resident leaders. We have not lost touch — or sight — of the fact that it is the active involvement of people who are living in the communities we serve and actively engaged in preserving them, who know best the needs of their neighborhoods."

In December 2003, Neighborhood Reinvestment’s board of directors announced Kenneth D. Wade as the Corporation’s fourth executive director. Wade, who joined Neighborhood Reinvestment in 1990 and served, first as New England District director and for five years as its director of national programs, initiatives and research, assumed his new responsibilities in January 2004. Wade succeeded Ellen Lazar, who became Fannie Mae Foundation’s senior vice president of housing and community initiatives.

“The NeighborWorks system represents an innovative and effective force in revitalizing America’s communities,” Wade said. “I am very proud to have the opportunity to build on that success as we work to address the nation’s affordable housing and community development needs.”

 

NeighborWorks America Today

Doing Business as NeighborWorks America
In April 2005, Neighborhood Reinvestment began doing business as NeighborWorks America. Neighborhood Reinvestment Corporation remains the legal, incorporated name, as provided in the 1978 statute. Approved by the Board of Directors in September 2004, the NeighborWorks America trade name (or DBA) clearly aligns the Corporation with NeighborWorks organizations and all of the other components in the overall NeighborWorks system.

NeighborWorks Addresses Foreclosure Crisis
Also in 2005, NeighborWorks America turned its homeownership expertise to the growing number of mortgage loan borrowers facing foreclosure and created the NeighborWorks Center for Foreclosure Solutions. The Center is an unprecedented partnership between leading nonprofit organizations as well as state, local and federal agencies and members of the mortgage lending and servicing sectors that involves a comprehensive, multi-faceted approach to the foreclosure crisis.

In December 2007, NeighborWorks America was named in the FY 2008 Consolidated Appropriations Act to administer the National Foreclosure Mitigation Counseling program .In February 2008, NeighborWorks America announced the organization had awarded $130 million to 32 State Housing Finance Agencies, 16 HUD-approved Housing Counseling Intermediaries and 82 community-based NeighborWorks organizations, to provide counseling to families and individuals facing the threat of foreclosure. It is estimated that 350,000 to 400,000 families facing the threat of foreclosure will be directly assisted with this funding — and many more will be helped by the training of foreclosure counselors, provided through the National Foreclosure Mitigation Counseling program.

NeighborWorks America’s Impact
Since 1991, NeighborWorks America has assisted nearly 1.2 million low- to moderate-income families with their housing needs. Much of this success is achieved through support of the NeighborWorks network ― more than 230 community development organizations working in more than 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. Since 2001, NeighborWorks organizations have generated more than $18.1 billion in reinvestment in these communities. NeighborWorks America is also the nation’s leading trainer of community development and affordable housing professionals.

 

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