Conversations with Advocates of Fair Growth
Overview | Conversations with Advocates of Fair Growth | Living on the Fenceline
Carol Naughton
Carol Naughton is director of the East Lake Community Foundation, a non-profit that helped oversee the demolition of a large, crime-ridden public housing project in Atlanta, the relocation of its residents, and the rebuilding of a mixed-income community that includes a fifty-fifty mix of affordable homes and market-rate homes. A real estate lawyer by training, Naughton worked for the Atlanta Housing Authority before taking over the East Lake Community Foundation After working at a commercial real estate firm, Naughton took a job as the counsel for the Atlanta Housing Authority, Naughton became involved in a number of mixed-income housing projects, including Centennial Place, which was built to replace Techwood, another of Atlanta's notoriously dysfunctional public housing complexes. While she was at AHA, Tom Cousins, a wealthy Atlantan real estate developer, was going through his own evolution as a philanthropist. Cousins, who established a family foundation, believed that it was important to give back something substantial to the community that had made him a rich man. He started by hiring men who were coming out of the prison system, reasoning that if you give a man a job he would not steal. This proved not to be the case and some of those he hired robbed him blind. From this experience Cousins decided that it was important to work with those who had a high risk of ending up in prison at an earlier stage in life so he became involved in funding youth programs. It was at this juncture that Cousins read an article in The New York Times, which reported that 70 percent of the inmates in the New York State correctional system came from just seven zip codes. Intrigued that the criminal population was this heavily concentrated, Cousins called the police chiefs in New York and in Atlanta and they confirmed that this was the case. The Atlanta police chief said that crime was even more concentrated in Atlanta and that one of the epicenters was the East Lake Meadows public housing projects where there were murders, drug gangs, and people sleeping in bathtubs so the bullets that came through the walls at night wouldn't kill them. Cousins decided to concentrate the work of his family foundation in the East Lake community. And, in a remarkable public/private partner ship, he joined with Renee Glover at AHA and lobbied HUD for funds to renovate the housing project and improve conditions for the people who lived there. They were successful in landing a $33.5 million HUD HOPE VI grant to renovate the 650 unit complex at East Lake Meadows.. But planners soon realized that it would be better to tear the housing project down and replace it with a mixed-income facility with an improved design than it would be to renovate the old complex. This kicked off an arduous and at times confrontational process in which the residents of the housing complex entered into a formal agreement with the developers about what replacement housing would be found for them and their right of return to the new project after it was built. Despite the problems of the public housing development, the East Lake neighborhood was not without its resources. The East Lake Golf Course was one of the oldest in the region and boasted a beautiful if run-down clubhouse and an extensive and historically important golf course that a number of famous golfers called their home course. The juxtaposition of a high priced golf club next to a destitute public housing project, however, had created problems. Golfers were being robbed at gun and knife point on the greens and membership was plummeting. The club no longer had the money to maintain the facility so Cousins purchased it and pumped money into restoring it to its former glory. Then he decided that all the net profits from the golf course would be channeled into the East Lake Community Foundation and used for the benefit of local residents. To date the Golf Club has helped raise some $17 million. Corporations joined the club for a hefty $75,000 membership fee and were solicited to make large donations to the foundation. The club is now also host the PGA tour which is expected to bring in significantly more money. As Naughton notes, there is a certain delicious irony to see this "fancy-pants" golf club providing funds for affordable housing. The money helped the redevelopers of East Lake build a first rate charter school, a large YMCA recreational facility, an early learning center, and a second golf club for residents of the new housing complex and children in the charter school. Before long Tiger Woods was out on the community golf course teaching low-income children how to play the game he has come to dominate. Much has been made about the fact that Hope VI projects, which involve the destruction of dysfunctional, large block public housing complexes and their replacement with less-dense, low-rise units that mix income groups frequently do not involve a one-to-one replacement of low-income housing units and that there has been a significant net loss of these low-income units over the course of this otherwise tremendously successful HUD program. This was the case at East Lake as well as elsewhere around the nation. Instead of replacing the 650 low-income units with a similar number, the redesigned and rebuilt complex only 542 units and only half of them, some 271 units, were for low-income residents. This means there was a net loss of 379 low-income units. Naughton argues that in fact the redevelopment program, while it did not provide one-to-one replacement, actually ended up serving more low-income families better than they were served under the previous arrangement. To begin with she points out that East Lake Meadows, before it was demolished and rebuilt, was a terrible place in which people lived in fear for their lives. Second, conditions had become so awful that many of the apartments were abandoned. Third, during the relocation program, residents were given a choice of either moving into other public housing facilities or being given a Section 8 voucher, which permitted them to pay for an apartment the found in the private real estate market. In the end, she explains, while many of the previous tenants of East Lake Meadows had a right to claim a unit once the new development was built, many of them didn't because they found the Section 8 certificates were a better deal for their families. Others had dropped out of the public housing program during the course of the renovations. And still others didn't want to return because there was a work requirement in the new apartments that they found onerous. There was another reason some tenants did not return and that was that either they or their children would fail a criminal background check. Some mothers decided to find a place where they were permitted to live with their grown children who had criminal records that would prohibit them from entering the renovated East Lake community. It was a terrible choice they had to make, notes Naughton, but it was their choice. Current residents in the renovated facility have passed criminal background checks and many of them are now also working save for the elderly and disabled population who are exempted from the rule that requires residents to find work or enroll in a life skills program. At first there was considerable concern that it would be difficult to find tenants for the market rate units given that they would be moving into complexes where half the other residents were receiving government assistance. But despite a weakness in the Atlanta rental market the market-rate units at East Lake now have an 87 percent occupancy rate while the subsidized units are 100 percent occupied. This means that overall the complex is 93.5 percent occupied giving it the air of a popular, clean, and well-run rental housing complex. Life is going reasonably well in this recently renovated community. Crime has plummeted. East Lake Meadows used to be the works crime beat in Atlanta 56th place out of 56 beats) now it has risen to the 11th best. Part of the reason for this is that the foundation has developed many activities for the many children and teenagers in the complex including golf, swimming, YMCA activities, after school programs, and mentors. The community and the foundation also built a charter school that is bringing up the grades of local children dramatically. When the school opened two years ago only 31 percent of 4th grade students were passing state standard tests. Now 66 percent are passing an incredible improvement of 35 percent. Naughton expects that grade will improve another 10 percent in the near future before the rate of improvement slows to a crawl. Naughton disagrees with those who suggest that mixing income groups in the same building is unwise because it creates temptations for the children of lower-income families to steal from children of wealthier families. That sells people short, she says. People experience income disparity regardless of whether the wealthier people live next door or down the street. What has made the East Lake community a success so far is the long planning process that went into it. Naughton figures she was involved in a minimum of 2,000 hours in meetings with members of the old community as they negotiated the contract over how the redevelopment would take place. These meetings were allegedly planning sessions at which the details of the redevelopment were hashed out but in fact they were about building trust, Naughton reports. The Atlanta Housing Authority had been dysfunctional for 40 years and as a result there was a lot of pent up frustration that had to be vented before residents could move on and see that the new facilities were going to be a lot better. Naughton says she still has scars from some of the vitriolic attacks on her that took place when she was called racist names and berated for stuff that she had not been involved in. Before the process was over, the previous residents sued AHA and the foundation but lost. After that relationships began to heal, Naughton says, and she now has a good relationship with some of her most bitter critics. After this long negotiation and law suit Naughton moved from being the general counsel at AHA to take over as executive director at the East Lake Foundation. It has given her a chance to become intimately familiar with what she helped create. While the community has a significant mix of incomes it has not become substantially integrated racially. Currently it is about 90 percent African American and 10 percent white, she notes. Cousins idea when he lobbied for a mixed income community was to attract people who would rent the market rate units who would be willing to be involved in helping to build up the community and act as teachers and mentors, Naugton notes. Currently, the incomes of residents range from about $17,000 to over $100,000 and you have doctors and lawyers living adjacent to folks who are on welfare. Most of the social mixing between these income groups happens around the swimming pool, the YMCA, and the school, Naughton notes. Soon they will try to create committees of people drawn form the community who want to work on specific issues such as working on educational and other issues. It is Naughton's hope that this issue-oriented approach to bringing people together will bring people together in a positive way to work on problems facing the community. The rebuilding of the East Lake community has caused property values to sky rocket, Naughton observes. In 1996 the average sales price of a house in East Lake was $45,000; in 2002 the average price was $212,000. This has both an upside and a downside, she continues. On the positive side, since most of the homes in the area are privately owned and there are very few multi-family rental buildings, the increase in property values has generated a lot of wealth if families choose to sell their homes. However, those who choose to stay are facing higher property taxes. To help defray some of the costs of low-income residents of the area, a Neighbor-in-Need program provides some funds and volunteers to help residents who are having trouble paying to maintain their homes given the rising taxes. Volunteers are fixing roofs, painting homes, and fixing up yards to help homeowners afford to stay in the area, Naughton says.
Interview
Carol Naughton is executive director of the East Lake Community Foundation.
Steve Lerner (SDL): When was the East Lake Community Foundation founded?
Carol Naughton (CN): It started in 1995.
SDL: I'm very interested in efforts to create mixed-income housing around the United States. There are disputes about the best way to do that. One of the most challenging approaches is to try to get mixed-income housing in the same project. I hear you are trying to do that.
CN: We are.
SDL: I want to hear how you came to do that and the story of how it came about and how is it going.
CN: It was really, really hard.
SDL: How did you get into this work?
CN: I am by training and practice a commercial real estate lawyer. For the first nine years out of law school I worked a law firm here in Atlanta, Southerland Anbill, and Brennen. I worked with lenders and developers, investors and folks who were in the commercial real estate business to make money. It was a great learning experience but it didn't float my boat. It wasn't what I went to law school to do. I was pregnant with my second child and sick as a dog and in bed and with drug-induced time on my hands and it gave me time to think about what I wanted to do with my life and I knew that I had not gone to law school to do what I was doing. When I came back from maternity leave I told my law firm that I wanted something that had more of a public service component to it. And that was always what I wanted to do but that I had gotten caught up in a different way of life. A couple of weeks later one of the partners in my law firm came to me and said that she had just heard about a job she thought I would love. And it was a job being created at the Atlanta Housing Authority as they were trying to figure out how to do mixed-income developments. They needed a lawyer who understood what a private developer needed, what lenders needed, but who spoke their language and could be on their side of the table. SO that night I went down to an Atlanta Housing Authority (AHA) meeting, it rocked and rolled, met with Diane Durgan who was the general counsel, and Diane had been the senior vice president and counsel for xxx. She was as high up in the legal world as one can go. And when she retired she chose to work at AHA with Renee Grover to try to help fix the agency. And I figured if people who had as much to lose as Anne and Renee were willing to tie their reputations up with this that it was definitely something where my skills were going to be important and that it was mission orientedworking on providing affordable housing and it was an important issue and it spoke to that need I had to wanted to be of service to people. This was 1995. So a week later I had a new job. My first two years there between half and seventy-five percent of my time was spent on both the legal and business side of developing the legal and financial model for Centennial Place, East Lake, and all the other AHA HOPE VI revitalizations.
SDL: Hattie Dorsey just told me about trying to get mixed-income housing into Centennial House.
CN: Yes, that is a different place. Centennial Place was 40 percent affordable housing, 20 percent tax credit, and 40 percent market rate. So 60 percent of it was affordable housing. And that is pretty good. It is in a great location. It has a brand new school and a YMCA. It is a great community doing really well. The school is one of the top performing schools in the city of Atlanta. It is a great success story and I am very proud of it. It took a neighborhood right in the middle of downtown, right next to Coca Cola's world headquarters, just south of Georgia Tech's campus, and north of what is now Centennial Olympic Park. They would not have done Centennial Olympic Park if Techwood Park Howell (sp?) was still there. They would not be building the biggest aquarium in the world right there.
SDL: So they tore Techwood down.
CN: Yes, the folks were relocated, it was torn down, and then Centennial Place was built. Centennial Place and East Lake are of the same generation. They are just a couple of months apart in development.
SDL: Was it as one to one replacement of low-income housing?
CN: It was not one to one with hard units. But between new section 8 certificates and hard units on site and off site it was more than one to one. The resources were going to be delivered differently but more families were going to be served. At Techwood Park Howell there were about 1,100 units and probably a third of them were vacant. It was in terrible shape. So 40 percent (900 units or so) were public housing and another 20 percent are affordable under the tax credit program. So, no, there was not one to one replacement on site, but in terms of the number of families that are going to be served, and served significantly better, it was a home run.
SDL: And what did they put up on site as replacement housing?
CN: Three story buildings, primarily, with a flat on the bottom and a two-story townhouse over it. It is a real pretty complex with good architecture. It is a place where I would like to live. You could see yourself living there or your kid living there when they got out of college. It doesn't feel like it is affordable housing.
SDL: Is it rental housing?
CN: It is almost all rental. They are now starting for-sale, town home, condo developments. And that will be mixed-income as well.
SDL: That was finished when?
CN: The rental was finished several years ago. The home ownership component is just coming on line now. It started with a Hope VI grant in March 1996.
SDL: So you cut your teeth on that.
CN: I did.
SDL: Then how did East Lake Foundation come about?
CN: This came about by the stars lining up in the right way. You had stuff happening on the public side and on the private side and they came together. On the Private side, Tom Cousins, who is an Atlanta based real estate developer, Cousins Properties, publicly traded, Tom had been a developer since the 1950s. He gave away a ton of money over time frequently in Atlanta. It was always important to him to help folks who needed help one way or another. Back in the 1970s he owned the Omni. And he hired his management company to hire guys who were just out of prison. He thought that what folks needed was a job and if they had a job everything else would fall into line. What happened is that he was robbed blind. Everything that wasn't nailed down was stolen. It made him realize that you have to work with folks before they make their decisions that land them in prison. And that it is hard after that, not impossible, but it is hard for folks to get back on the right track. So he started thinking about working with kids and supporting youth activities. In the late 1980s he read a column in the New York Times that said that 70 percent of the men in the New York State prison system came form seven zip codes in New York City. Think about that. Seventy percent of the men in the state system came from seven zip codes. He could not believe that could possibly be true. He picked up the phone and called someone in New York who would be in a position to know easily. And he was assured that this was in fact true. So he picked up the phone and called the chief of police in Atlanta and told him what he had heard about New York and asked if Atlanta had the same problem. And the guy said: sure we do but it is not even seven zip codes. I bet it is three or four neighborhoods. He mentioned three or four neighborhoods all of which were anchored by huge public housing projects. One of the worst we have, he said, is called East Lake Meadows. The police called it Little Vietnam not because of the ethnicity of the people who lived there but because of the sense of hopelessness and violence and the drug trade. East Lake Meadows was the name of the public housing project. So Tom stewed on that for a little bit and he and his family decided to concentrate their philanthropic effort around East Lake. So when the Boy Scouts would come to them for money he would say fine as long as you do it in East Lake. And there were a couple of people who stepped up and said they would be happy to do it in East Lake. And others said, no East Lake is too funky for me. In the early 1990s he refocused and decided to send his own people out to East Lake family members and people who worked for the Cousins family to get to know the community and work with it. They were not only willing to give money they were willing to give of themselves. And so starting in 1992 they started to get to know folks in the community and looking at what could be done. In 1993 the Cousins family supported the Housing Authority's application for money to renovate East Lake Meadows at they got 1 $33.5 million grant from HUD to AHA to renovate the 650 units. At the same time AHA, the president, Maynard Jackson, Jimmy Carter, were going up to lobby. At this point the one to one replacement rule was still in effect and there wasn't any flexibility on it. So renovation was the only ballgame in town. But $33.5 million was way too much to just renovate it but it wasn't enough to replace it on a one-to-one basis. So housing authorities were making what I would call bad business decisions on how to provide a resource on a way that made sense because one-to-one replacement sounded good in theory but in practice it is really hard to work with. Maynard Jackson, the mayor, brought in Renee Glover to the Housing Authority Board. A year later he appointed her chair. She was going to turn around the housing authority to really fix things. So Rene and AHA did a national search to find someone to really turn this thing around. The search committee came back to Renee and asked if she would be willing to reduce her salary by two-thirds and take over this thing [AHA] that no one has been able to run effectively in 50 years. The mayor told her not to do it. Her friends and family all told her not to do it. But Renee looked at it as a mission and that all her life she had been preparing for this. So against all this advice she became executive director of the AHA in September, 1994. But for Renee being in that position none of this stuff would have happened. The Cousins Foundation had talked to people at AHA before that trying to partner together to work together and nothing positive ever happened. They didn't know how to make decisions. They were afraid of the private sector. They assumed it was some kind of land grab. When I was at the Housing Authority and I would look at the Foundation and ask myself: What do these people really want. Because I couldn't get it through my head that they were really doing it out of the goodness of their hearts. I am a really good lawyer and I knew that there was no really good financial up-side to these guys working in this field. The reason Tom Cousins likes me was because I negotiated a better deal for the Housing Authority than his folks did for his side of the table. I couldn't find any financial up-side for him on this. Tom was being criticized roundly by folks who didn't know anything about it. It was the day that Tiger Woods came here that I finally accepted in my heart that Tom and his family were doing this because they thought it was the right thing to do. And that there wasn't any financial upside for them.
SDL: Did they buy a bunch of real estate in the area?
CN: Not really. What they did is bought some (?) and then sold most of that land for people who would actually build houses in the neighborhood. They bought the East Lake Golf Club in 1993 and this was a stroke of genius. This was a fancy-pants, historical golf club. The build was falling down and condemned. There were about 150 members left who couldn't afford to keep it going. People were being robbed on the fairways on a regular basis. It was a disaster. They were in bankruptcy court and were dissolving the partnership and divvying up the assets and one of them called Tom and asked if he would like to buy it. And Tom bought it and donated it to his family foundation with two conditions: one that it be restored to its former glory Bobby Jones and Alexis Sterling and Charlie Yates and the other great golfers who called East Lake their home course. And here is the real humdinger: All of the net operating proceeds form the operation of that course had to be used to revitalize the community. And that is why the East Lake Community Foundation was created essentially to receive the benefits and service the non-profit master developer of both the physical and human capital in this community.
SDL: How much does that generate?
CN: It ranges but every year it is a couple of hundred thousand dollars. Now we have the PGA Tour Championship being hosted here. We are on the PGA tour. It is like the all star game of golf. That will generate between half a million and a million dollars. And that all comes to East Lake Community Foundation. There are corporate members only accepted in the club at this stage in the game, with a few of the individuals who were members when the club was bought in 1993 as holdovers. They hit the golf lottery. There are maybe a hundred resident members and everybody else is a corporate member. And when a corporation is invited to join they pay a $75,000 membership fee to the course and we ask them to make a few hundred thousand dollar donation to East Lake Community Foundation. So that has been they way we have raised $17 million. When corporations send people out here to golf that generates more revenues that come back to us. It was a good idea. Cousins spent $25 million to restore the Golf Club so they made a significant investment.
SDL: Do they get money back?
CN: They will get some of their money back maybe $10 million back. But what a cool idea: use this fancy-pants, elitist golf club as a way to regenerate the neighborhood and provide an economic engine in the neighborhood.
SDL: So let me get this straight: there was a fancy golf course across the road from the infamous East Lake Meadows Public Housing complex.
CN: Right and people were getting robbed on the fairways. It was a nightmare. The fact you had Renee, who didn't come from the public housing world, who wanted to look at ways to deliver this resource to people in ways that wouldn't stigmatize and isolate them from the rest of the world. And you had Tom, who was willing to make an investment in people and in the neighborhood. They came together and pushed each other to go farther than either of them would frankly have been willing to go individually. As a result, working with residents in the neighborhood and I will tell you about that process in a minute we came up with a great master planned community that includes now 542 apartments, 50 percent of which are rented to folks in the public housing program, and 50 percent of which are rented at market rates. We have a great new charter school, Atlanta's first charter school for 775 kids from kindergarten to 8th grade. Attached to that building is the largest YMCA in the metro area. We have a new Sheltering Arms Early Learning Center that serves 144 children from birth through four years of age. And the apartments have all been built around a new golf course named the Charlie Yates Golf Course. He was a great Atlantan who was a wonderful amateur golfer and a community and civic leader.
SDL: So it is 540 apartments where there used to be 650.
CN: AHA more than replaced what existed. There are 271 apartments on site that operate as part of the public housing program. There are 30 apartments down the road that are part of another mixed-income development that was also funded from the same $33.5 million HUD grant. Then there are two or three other off site places with the same kind of mixed-income environments. Then there were a number of Section 8 certificates so when you added up all the resources at the end of the day there were significantly more families being served than there were when we started out here. Originally there were 650 apartment but only about 425 were occupied.
SDL: Did any of those people come back once the new buildings had been built?
CN: Yes, I think it is about 78 out of the original families. We had assumed during our planning period that everybody would want to come back. We started with that assumption but while it was a nave assumption it was the right one to plan for. We had a legal contract between the Foundation, the Housing Authority, and a resident association that governed how the redevelopment was going to take place, what was going to happen, how many apartments there would be that were public housing assisted including what their rights of return would be. And it was a good process, it wasn't perfect but it was good. Nobody had to make their mind up about coming back until the units were up. We wanted people to retain their rights so they could see it because even though you could show them pictures and renderings you really weren't going to be able to appreciate it until you saw it. And so we encouraged people not to make a decision, keep all your right, hold onto this, this is a valuable resource, you might want this. Keep your options open. So when the first apartments were up and out of the ground and we started populating everyone who used to live here other than the folks who had died and some that had skipped out and were no longer part of either Section 8 or public housing because everyone who had been relocated and moved into other housing or into the Section 8 program. If they were still part of the program they received an invitation to return. In fact they received four invitations over the course of the next couple of years. Some people saw it was all 2,3, and 4 bedroom units but they needed a 1 bedroom unit. So they would decide to wait for the next phase. Or some waited for the villas to be built in phase two. When we saw that some folks were choosing not to come back we went and talked to them and asked them why. And it was enlightening. There were a number of reasons people didn't come back. The biggest reason was that people liked Section 8. They liked the flexibility. Keep in mind that some of these folks were away from the community for three or four years. And they may have moved two or three times. What we saw was that families when they made their initial move into Section 8 made one move. Then they really moved up. They had gotten wiser and made better decisions about where to move the second time. A lot of folks said: you know what> If I move back to East Lake I have to give up my Section 8 certificate and in Atlanta it is very hard to get a Section 8 certificate and they are really valuable resource. The program is well administered and there are lots of landlords who participate and you can go live where there are better schools, more jobs. So a lot of people decided to keep their Section 8 certificate because it worked better for their family. We had other people who said: you know what? You have a work requirement. And I don't care that welfare reform is here: I'm not going to work. And we said: fine. You are making a good decision and you shouldn't come to this community because we do have a requirement that if you are between 17 and 54 you need to be working or in a life skills program. So if you lose your job and are not evicted you have to get back in a jobs skills program and you are encouraged to find a job. In the assisted units in the village there is a higher percentage of adults who work than there are across the state of George. (Assisted means public housing units.) So what we found is that people who are here are working. It may be at low-income jobs and they may not have moved up. Well, they've moved up from an average income at the old East Side Meadows to an average of $17,000. So we have a lot of people who have gone to work who have not historically had work. And so we have a high percentage of families that are working. People lose jobs but they get back up on the horse and find another job. Other people came to me and said I am not coming back because I am worried that it will be like it used to be. Another group self selected out because they were going to have criminal background issues. It wasn't more stringent but at the same time we went through our relocation and revitalization of this community the Administration issued the One Strike and You Are Out policy so the rules changed. So while there had always been a criminal background check when people moved into public housing they may never have gone through another one. And with the One Strike policy they would have had to go through it every year. So stuff was coming up so some self-selected out. I talked to some women who were on the planning committee and spent a lot of time on the process who had adult sons who lived with them who had bad, bad backgrounds. And if they were going to come back their sons were going to come with them. I went to talk to them to convince them to throw the bum out. That was my initial position.: take care of yourself. Come back to the straight community. One of the women took me by the hand and said: Carol, I am the only thing standing between my son and oblivion. And she wasn't willing to write him off. And I am a mother and I can understand that she made that decision. It was here choice to make. And her son couldn't have come back to this community because you wouldn't want him living next to you or anyone you cared about. And she acknowledged that. I also think there is a misconception that people stay in public housing forever. There is a sizeable minority who do stay for a long time. But if you look at the turnover rate it is about 25 percent a year in Atlanta. And so over the course of a three or four year relocation period you would expect that there would be a significant turn over in the community. The first folks moved out late in 1996 and the first folks moved back in the beginning of 1998. The last folks moved out in 1999 and the last folks moved back in 2000. So, it was possible, depending on where you were on the priority list and what kind of views you wanted that you could have been gone for four years. This is one of the reasons that so few moved back. I expected to everyone to come back and it was a growth opportunity for me because I recognized that even though I think I know what is best for everybody I really don't and people know what is best for them and their decisions should be honored. It is their decision. I've learned the most from bad decisions. I would be condescending and paternalistic to think that I knew best for folks. That was an important change in the way I looked at things. It was a good process and a fair process and that people had good choices and good resources to make those choices.
SDL: So, no one was out in the street.
CN: No, no, in fact there was a city council member in Atlanta and Derrick Bozeman would say: bring me someone who has been mistreated in this process and I will give you $1,000. And he is a city council member. And no one has come forward. It is not a perfect process. Moving is hard for everybody.
SDL: And it did break up the old community regardless of how dysfunctional it might have seemed.
CN: You hear people talk about the Meadows as if it were this big idyllic place. But I have been in lots of scary places but this was the worst. There were kids who were killed out here. People slept in bathtubs because they were worried about bullets. Kids hid in closets all the time. It was terrible. It needed this kind of dramatic change to help folks get on with their lives. Residents were well served during the transition period and the relocation process in that the resource is here long term to continue to provide great housing in a sustainable, healthy community for families who have the same profile. We now have 271 apartments here in a great community with a great elementary school, a great quality of life infrastructure that can help families break out of that intra-generational struggle of poverty. The 271 figure is the total of the public housing assisted units at the villages. Right now the average income of those families that are non-disabled and non-elderly is $17,000 a year so families are working and that has become part of the culture. Some 20 to 25 percent of the apartments are rented to people who are elderly or disabled. And the rest are rented to families who are working age. In total there are 542 apartments and they are split 50 fifty. The market rate apartments are between $800 for a one bedroom and $1,400 a month for a four bedroom.
SDL: Are these all rented out?
CN: We are at about 87 percent occupancy on the market rate units, which is a little above the average in Atlanta right now. This has been a terrible time to be in the apartment business. I think we will be at 90 percent by the end of the month. So we are doing ok. And we are at about 100 percent on the public housing side. So it feels as if about 94 percent of the apartments are occupied. So it has a nice healthy feel.
SDL: Can you tell the difference between the market rate units and the assisted units.
CN: No, they are indistinguishable. Fifty percent of the units in every building are market rate and 50 percent public housing. You know half the units in your building are on the market and half assisted but you can't tell unless someone chooses to tell you.
SDL: So, how is it going? How are the people from different income levels interacting?
CN: For the most part it is going well. In some ways it is a hard housing community to manage because there are so many kids. One of the thing that is good about us being the managers of a housing complex that serves lots of kids is that is that we (at the foundation) are more interested in serving the children [than other developers]. We have an after school program that serves 300 kids, a summer program that serves 200 kids, mentors in the community who do volunteer work with the kids especially when we have 70 teenagers at the YMCA on Saturday. We do all kinds of things working with kids in the community. There are no gangs here. We do have some drug problems but it is not worse than any neighborhood anywhere else in Atlanta. Crime-wise Atlanta has 56 beats. In 1996 there were more Part I crimes (homicide, rape, aggravated assault, burglary, car break ins etc) in beat 605, the East Lake Meadows beat, than any other beat in the city of Atlanta. Last year there were only ten beats in the city that had fewer Part I crimes than beat 605. So we used to be the worst, number 56, now we are number 11. Or, if you want to look at it the other way, the safest neighborhood is ranked number 1 and we are now at number 11 when we used to be last at number 56. So there has been a dramatic change and the kind of crimes have changed. We no longer have the violent crimes. Now it is someone trying to break into an apartment or break into a car. They are property crimes rather than crimes against people. You expect to see some of those when there is stuff to steal.
SDL: I talked with an architect of affordable housing in Oakland, Mike Pyatok, who had some interesting things to say about trying to do mixed-income housing in the same housing complex. He suggested that it was not particularly fair to put kids with families that make $17,000 a year in the same buildings with families that makeover $100,000 a year because the disparity will end up creating problems for the poorer kids who will see the richer kids with a lot of stuff they don't have and that will create temptations to steal. He prefers to have mixed income neighborhoods where lower-income people have their own building and mix with people of higher incomes on the street. How do you see this?
CN: I think the temptation happens whether they are in the same building or a block away. The reality is that there are huge income disparities in our society. I remember when I got out of college and was in New York City I made $3 a month too much to qualify for food stamps. I had a sense of what it was like not to have an extra dime in your pocket. And I remember walking down Madison Avenue and looking at the stuff in the stores that was so expensive and I was really angry. I was working hard and doing everything I was supposed to and I thought: why can't I have some of that. So I have at least experienced that in one way myself. I don't think it matters whether you are living next door to somebody or whether you are seeing it on TV or you see it other places you can still feel that anger. The question is what is the behavior going to be like. And I think your friend [Pyatok] sells people short. Just because someone is angry or jealous doesn't mean they are going to steal something. There are a lot of good things going on in our community that are not income based. There is a YMCA and anybody can join it. There is a sliding scale and if you are very low income you can pay $5 a month. If you are part of the East Lake Junior Golf Academy you play golf for free in the course and we give you equipment. There are so many things that kids can be doing out here that are not limited by the resources of their families that probably minimize some of that anger. I think it is really about behavior. We set expectations high and tell people that we don't steal. So I think your friend sells people short. That is not to say that there is not anger sometimes. We had a really vigorous planning process out here. For four years we met with the resident planning committee. We met for three hours every Monday. There were also other side meetings and I probably have 2,000 hours of planning meeting time at least. And it was very difficult and very hard because it wasn't just about planning; it was about building trust. The Housing Authority in Atlanta had been so dysfunctional for so long; residents hadn't been served for so long; folks should have been skeptical because when someone comes and says we are from the housing authority and we are here to help you, why should they believe us. At the same time you have this foundation sponsored by this real estate developer so people were saying that he was going to take the land and build a new Lennox (sp?) Mall. There were those kinds of issues we had to over come. The planning process, while in theory it was supposed to be about what the new community would be like, what it would look like, where the buildings would be located, what the kitchen cabinets would look like, what the flooring and carpet would look like, how big the apartments would be, how many two bedroom, one bedroom, villas -- we planned everything -- but it wasn't really about the planning it was really about building new relationships and building trust.
SDL: Who was on the resident planning committee and how were they chosen?
CN: Miss Davis, [a politically powerful resident who acted like a ward boss] hand picked her committee. It was very interesting. Miss Davis was the only one who ever talked. She may have had conversations with folks outside our hearing but at the meetings Miss Davis was the only one who talked. She was well represented by lawyers. Frank Alexander is a lawyer at Emory Law School; a great guy and an incredibly smart lawyer. Dennis (?) Goldstein is at Legal Aid and another great guy, great lawyer. And we negotiated. They were part of every meeting. We were all joined at the hip for a couple of years. Frank actually wrote the agreement that was the redevelopment cooperative agreement between the residents, the housing authority, and the foundation. It was a very people-centered process. But, again, it was really about building trust. So Renee [Glover] and I would be out here from the housing authority, and Gregg Giranelli (sp?) my predecessor would be here from the foundation, Tom Cousins son-in-law so very close to the sourceand then the residents and their lawyers. We were all working together for a long time. Some of the meetings were hard and painful. Miss Davis would scream and yell and call us all kinds of names and then apologize afterwards and give you a hug when you go. It was about making small promises and keeping them and then making bigger promises and keeping them. You don't fix something that was broken over 40 years in a couple of meetings. It required significant personal attention and it required all of us at the table to make ourselves a little vulnerable and be willing to be hurt. And it was hard to sit down and have people scream at you and call you all kind of racial names and call you a crook and a liar and a cheat. You knew in your heart that they weren't calling you that they were calling everybodyit wasn't about us but we were the ones who had to bear it and get over it so we can move to the next level. Is till have scars from it. We had a lawsuit at one point. It wasn't about what it was about. On paper the lawsuit was about residents who were still living in a part of East Lake Meadows that was about to be torn down wanted to move over to phase one of the new units and live there temporarily and then move to a place permanently. But what that would have done is that families that had a higher priority, who had already been relocated off site, would be forced to stay off site two years longer. So we would have been treating one group of residents better than we treated everybody else. And we didn't think that was fair. So that is what the lawsuit on paper said it was about. But it was really about the transition of power. Miss Davis really wanted the community to change but she also really didn't want to give up her power. And that is really what it was about. We had a three month delay in 1998 in fact the first day the PGA came and we were hoping to get some press. We got a little bit of press. But it all went against Miss Davis because at that point phase one was up, people could see how nice it was, good things were happening in the community, and so much to her surprise she had lost the high hand that she had with the press two years previously. The law suit took three months to get it resolved. We had a great judge who was a former Legal Aid lawyer. He required us to go to mediation at the Atlanta Justice Center. We couldn't get where we needed to get through that. Then he mediated for a day. He pushed us really hard. Renee and I were willing to submit our resignations if it would have gotten us over the hump and moved the process forward. He wouldn't let us do that but it was really hard and painful. We spent from 9 in the morning until 6 at night being mediated in his chambers by the judge. He had us together and separate and worked us real hard. It was really hands on. And at the end of the day it became apparent to him that the residents weren't going to budge and we had offered up as much as we could. So he said he would hear our arguments. At six that night he heard our arguments and at 9 the next morning he issued a 13 page ruling in favor of the housing authority. And that was the end of the difficulties. But we were all hurt by the lawsuit because we had 99.9 percent agreement and it should have been enough and it didn't need to be that hard. It cost us $100,000 and slowed us down for three months. And we could have done two other units of housing for that amount. Miss Davis was on the board of the housing authority at the time she sued us. It turned out to be a good thing because in my role as general counsel the care and feeding of the board of commissioners was my job. So I had to keep talking to her. So I look back at that as a blessing because instead of turning my back and saying enough is enough I had to keep talking to her and it allowed our relationship to heal. And Miss Davis moved back to the community, she has a great apartment, I'm having lunch with her next week, but it was really important that we had that venue to keep talking. We wouldn't have done it if we had our choice.
SDL: How did you move from being general counsel at the housing authority to being the director of this foundation?
CN: I was at the Atlanta Housing Authority from 1995 to October 2001. And I worked on this development as part of what I did during that whole time I was there. I was on the other side of the table [from the foundation] and they knew me very well. When it was time for Greg Gironelli to move on to something else he thought I would be a good person to come take his job as the executive director of the foundation. I realized this was a neat opportunity for a lawyer to live with what you have created. (I don't actually live her. I live in north DeKalb County) but to have to live with what you have created is something. Things that sound good in a conference when you are negotiatingwell, how do they work in real life. And I love this community. I poured my heart and soul into it so this is a unique opportunity.
SDL: Has this been successful in bringing together people of different income in more ways than just putting them in the same housing complex? Are people building relationships across the income gap. Or do they remain fairly separate socially? Are they mixing in the laundry facility or in the exercise area?
CN: I think it is happening informally. I think it happens in places like the pool. It's a beautiful outdoor junior Olympic pool. It happens around the charter school. About 90 percent of the kids who go to the school live in the villages the apartment complexes. This charter school is a school of choice. You have to choose to go there. So there are some kids in the villages who choose to go to other schools. If you just moved to the villages and your kid is happy in their existing school they might not transfer to this one. A second reason would be that this school has a long school day and a long school year and some kids may not be able to handle eight hours a day and 195 days a year. So you are in school a third longer at Drew than you are in other schools. For some people that is an attraction and it is necessary for Drew to do what it needs to do but I can see some parents saying that their kids just couldn't handle that. So you can make a really rationale decision not to send your kid there.
SDL: What is the racial make-up of the school?
CN: About 98 percent African American and about 80 percent free lunch program. Some 75 percent of the kids who go to the school live within two miles. So it is a neighborhood school. We wanted this to serve the lowest performing kids. And they are now doing much better. Our rating improvement is dramatically faster than the rest of Atlanta. In the first year the state tests, for which we are evaluated for the No-Child-Left-Behind program showed that 31 percent of our 4th graders met state standards. That meant 69 percent of the kids did not meet the state standards. Two years after that we are 35 percentage points higher. And I think we will see another ten percent jump. And we are seeing that across every grade and every subject because we go from kindergarten through eight grade and we don't lose too many. Typically kids trend up until 6th grade when they crash and burn. And that is happening in Atlanta middle schools. But our test scores keep going up and we are now the 4th highest middle school out of 18 in Atlanta. That is not saying so much about Drew as how badly everyone else is doing also.
SDL: Are there extra resources that have been added to the school that help account for this improvement?
CN: There are from our foundation and the CF Foundation which is the Cousins Foundation through us. One year the contributions were as high as a million dollars in the first year but it will probably average around $350,000 a year. Under Georgia law charter schools are supposed to be funded like any other school but no one knows what any other school is funded like. Schools do not do site based budgeting. And because educational funding streams are so opaque no one can figure out where the money goes, who is getting what and how much. We got lucky because this past year the Atlanta Public School system was being criticize3d because it was spending $13,000 per student and getting terrible results. They said: oh, we couldn't possibly be spending that much so they did an audit but it didn't tell the whole story. What it did tell was that Atlanta city tax payers spent $8,500 per kid from property taxes. We were getting $7,400 per kid from all sources in terms of federal, state and local money. APS is now saying they are spending $8,500 of just local money so we think we will be in a position to negotiate some more money from APS to fund us more fairly. Systems typically don't like charter schools. They take them personally. If you thought your public school system was doing well why would you start one? But we are here and we are going to stay.
SDL: Did the foundation start the charter school. We did working with parents in the neighborhood. We formed a separate board and we raised $31.5 million to build the school and the YMCA and the day care center. And the school cost $17.5 million. That was the construction cost. There is no debt on the school. It was all from private sources except a $1.5 million from the state of Georgia. When you think about everything that Tom Cousins has done for this neighborhood, putting his family foundation money in, turning the golf course into a financial engine for the community, that was brave but this is a man who has done business well. But what is remarkable to me is that he used all his political chits for the benefit of this community. He went out and twisted everyone's arm that he knew. He would tell them the story of East Lake and what was going to happen and the passion and the belief and the commitment with which he would tell the story, he would get them to say: ok Tom I'm with you and write a check. He didn't do that for the benefit of his properties or his family, he used it for the benefit of this community and I think it is really a remarkable thing. He led this community to borrow power from him to get stuff done that wouldn't have gotten done otherwise.
SDL: What ripple effect is this having, if any, in the neighborhood. Is this gentrifying the neighborhood? Here you have what used to be a real problem area with a high concentration of poverty and crime. Suddenly it is transformed into a mixed-income neighborhood where most of the people are employed, it has a good school, the gold club has been restored and is on the PGA tour. What does this do to the property values of your neighbors and their property taxes?
CN: Property values have gone up dramatically since we have been here. In 1996 the average sales price of a house in East Lake was $45,000 in 2002 the average price was $212,000. And while there has been some new construction it is not as if there have been a bunch of big new houses built. There is a good side and a bad side of that. The good side is that homeowners now have an asset that before they couldn't have given away. And that is a good thing. The bad thing is that we do have some folks who are struggling to keep their property up and to pay the taxes which have increased.
SDL: How about renters. Have their rents gone up?
CN: We didn't have many renters. This has always been a homeownership community. There are very few rental, multi-family properties. Houses have almost always been owned by folks who live out here.
SDL: That's good because it means that even if they are having trouble paying their taxes if they ever sell they are going to make some serious money.
CN: The head of the homeowner association said that in effect the foundation wrote everyone a $100,000 check. The question is how do seniors find a way to access that without having to sell the house? There are some cool things that people in the neighborhood have been doing and that we have been able to support in some reasonable way. There is a neighbor in need program that the neighborhood community association operates. They identify low-income folks who are having a hard time keeping their property up. They do projects on an on-going basis. This past fall we partnered with a group called Core-Net, a real estate industry trade group that was having a conference here in Atlanta. If you worked for Sears and were responsible for finding sites for Sears stores or maintaining the facilities, or finding sites for new stores, this is the kind of real estate group you be involved with. Tom Cousins had given a speech to Core-Net four or five years ago about the East Lake revitalization at a meeting in New York and as a result of that speech they formed a community service committee and they made a promise that whenever they went to a community for a conference they were going to leave that community better than how they found it. SO people would come in and build some time into their schedule to work on a habitat program. When they were scheduled to come to Atlanta they called up and we suggested they work with the Neighbor in Need Program. So people in the Core-Net organization from all over the country raised money locally, brought it to Atlanta, and we used that money in a very leveraged way to buy materials and services and then the volunteers came out and did a lot of the work themselves while they were here. So we raised probably $70,000 from places around the country and had 300 people come out and work for two days during their conference last fall of 2003. We put on seven new roofs, a lot of painting and lawn care, and clean up. Parts of houses that were propped up were fixed the right way. We used the money to pay for the kind of services we can't have volunteers do. We got donated HVAC systems. And the local chapter of Core-Net is going to continue this relationship with the Neighbor in Need program here in Atlanta. They were out just last week doing a tire clean up of the neighborhood. They also worked improving this park next to us. So every few months they will be out here working with the neighborhood. So, while that is not a systemic answer to the problem of gentrification it is more like a band-aid if you have to make a choice between paying your taxes or fixing your house, we can help you with the fixing your house part.
SDL: I ask about this because often the neighborhood gets fixed up but people are forced out of their community as a result. The message is: we're going to improve your community but you have to leave.
CN: And these are the folks who in large part were the glue who were holding things together when it was funky. If they want to stay you want to help them stay. If they want to cash out and move to Florida more power to them.
SDL: Do you hear that people have been forced to move out?
CN: I haven't heard that much to tell you the truth but I wouldn't necessarily hear about it. If people are going to take the money and run that's what they do.
SDL: Could skeptics make the argument that Cousins bought property in the neighborhood and when these improvements happened the value of his properties went up and he made money?
CN: No, you can't make that argument at all. It is just not true. We own very little property. We have two that are rented for PGA Tour offices. Cousins Property didn't buy here. They don't do anything like East Lake.
SDL: Jane Graff in San Francisco said that Cousins thought that in addition to giving money, wealthy Atlantans should give something back by actually moving into mixed-income communities.
CN: This is part of Tom's faith. He thinks that we should not just have people move into the market rate units who can pay the rent, he wants them to be people who want to be engaged in the community. And so that is something that we try to market that is different than the other apartment complexes. Not only do you get great value for your buck, not merely do you get a great golf course view, not only do you have access to a great charter school and access to the YMCA and all sorts of things, you get a chance to be part of a community and you get a chance to give back and if you are interested in mentoring a child or if you want to teach a class or lead a bible study group, this is a place where we are really trying to build a sense of community. And we haven't been that successful there yet. You asked how much are people interacting. I don't think they are interacting that much around their apartments but it is happening at the pool, the YMCA, the school, and around interests. We are looking at the resource collaborative model from Enterprise Foundation. It is a terrible name but a good idea. We don't want to create a tenant association because that is just us against them. That is the old fashioned model: done that, been there, didn't work. What we want to do is bring people together who share common interests and hope to facilitate solving problems creatively. So we are going to have an education collaborative start later this summer when school starts in August. So people who are interested in having education issues addressedeverything from how do we support our local high school, how do we support our kids and get them back and forth to school.
SDL: Are the for profit, market-rate units subsidized in any way?
CN: No.
SDL: So you didn't sweeten the deal so people would move in hear next to low-income neighbors.
CN: There are a couple of people here who are hear because we wanted them to donate 25 hours a month of community service and they are living in the villages in some market rate units. There eight of those folks.
SDL: But, other than that, the cost of the market rate units covers the cost of building them.
CN: Yes. I look at the villages as an endowment for the foundation. They are supposed to throw off some cash that we can use to do other cool things. There are really three lines of business. One is the golf course, one is the villages, and one is the Charlie Yates golf course and that was built as part of the villages. Those are the businesses that, in theory, are going to support us over the long term. Yates is not yet making money. In another year we should be making some good money off it.
SDL: Tell me a little more about the demographics here. You have a school that is 98 percent black. What about the people in your market rate units?
CNL: They are also largely African American. Keep in mind that Atlanta is 70 percent African American. And this part of Atlanta is probably 90 percent African American. So we are really serving the neighborhood. There is not as much racial diversity as I would like to see. I think over time that will change. About 10 percent of our renters are residents are white. The income spread is from $17,000 to $120,000. We have a couple of doctors and lawyers who live in the community.
SDL: Why do they live here?
CN: It is a beautiful location, five minutes from downtown. We are three miles from downtown. You are three miles from Grady Hospital and three miles from Decatur Medical Center. There are not a lot of major employers in this neighborhood. So there are a lot of reasons people would choose to live here from a location standpoint and from an amenities standpoint. And some people say that they are here because of what is going on in the community. We haven't marketed that strongly.
SDL: Are you out front about the income mix when people express interest in coming to live here? Do you tell people half the units in each complex are subsidized?
CN: We don't say it precisely that way but we do say this community serves people across a broad range of incomes. And we have people who have very little money making $10,000 a year living next to doctors and lawyers.
SDL: But you don't tell them that 50 percent of the people in each building are subsidized?
CN: If someone askedbut it is kind of likewhy stigmatize people? If they ask we say everyone is paying about a third of their income. You are paying a third and so are they. Some people are only going to want to live with people just like them and this community will never appeal to them. Some people want to live in a community that serves lots of different kinds of folks. That fits in well with the rest of the neighborhood which is kind of eclectic cool little community. Half a mile from here is Oakhurst which has some cool little restaurants and galleries. There are lots of artists and musicians. Half a mile on the other side is East Atlanta, where Five Points used to be, that is kind of like Adams Morgan in DC that is funky club oriented where you see a lot of people with piercings and tattoos.
SDL: And then you have this co-housing I visited the last time I was here: East Lake Commons.
CN: Yes, that is just around the corner from us. Tom Cousins made a loan to them initially to buy that land and they paid it off quickly. That is a cool little place.