Page 22 RAIN Summer 1986 Cecil Lawrence, of Genesis housing co-.op, and his children (Photo by Shlomo Crudo) Corporation is a real estate development company that is rehabilitating low-and moderate-income housing with emphasis on cooperative ownership, and is promoting commercial development. The Neighborhood Fund is a venture capital firm that finances minority business. The Neighborhood Institute (TNI) is a nonprofit organization that seeks public and private grants to provide assistance in job creation and housing rehabilitation. The South Shore Bank and its affiliates have developed effective mechanisms for making credit available to low-and moderate-income people thereby stimulating urban development. Since 1973, almost $65 million has been dispersed in "development loans." Bankers have traditionally avoided such lending, assuming they would lose their shirts. Yet the repayment rate on these loans is 98 percent. The total capital invested by the four divisions of the holding 'company combined will exceed $160 million by the end of 1986. Funding Housing Cooperatives Genesis is an example of South Shores's success. Initiated by TNI, Genesis is a "sweat equity" project in which community members worked eight hours a week for one and a half years to renovate ail abandoned 26-unit apartment building. Once completed, workers would be members of the cooperative owning the building. ,..:.. Cecil Lawrence, a bus driver since 1976, was_the first to · apply for membership in Genesis. He had doubts when he saw the building. "It was dirty. The place was boarded up and a section was burned out. It was a total disaster. I didn't believe anyone could transform a place that looked that bad." Lawrence and 14 other members, with instruction and training from professional carpenters, hammered, painted, refinished floors, and hung doors. With the building completed in 1982, Lawrence was elected the first President , of the Gen- esis cooperative. "When you become a member of a co-op, your responsibility changes. You're not just a renter any more. You have to be able to take care of your own building and its problems because nobody else is going to do it for you," says Lawrence. Lawrence's building has become one.of the cornerstones of a new TNI program for improving the entire block. · Lawrence recently lead training sessions for Genesis Two, a 27-unit TNI cooperative being rehabed. Because of the experience, he may pursue professionally the training of · co-op members in building management. Reversing the Money Drain Gryzwinski and his associates founded the South Shore Bank with the dual goal of initiating a permanent community renewal process and making a profit The bank has been profitable since 1975 and in 1985 had a 1.1 percent return on average assets (the industry's norm is 1 percent). This has · been done while bringing a net inflow of capital into the . South Shore area. Banks are ,generally considered to be doing an adequate job if 50 percent of deposits go to loans. Increasing criticism is leveled today at financial institutions because much is loaned outside the community-often in real estate or foreign loans. Other deposits go into the securities portfolio to boost shareholder profits. South Shore's innovation is to reverse the flow of capital. At least 65 to 70 percent of its deposits, many of them from outside Chicago through its "Development Deposit8M" program (see "Guide to Socially Responsible Investment Funds"), are in loans of Bankers have traditionally avoided such lending, assuming they would lose their shirts. Yet the repayment rate on these loans is 98 percent. which half are within its community. The remaining assets are kept liquid and are used for normal bank management. South Shore Bank's success has led it to expand its operations to meet the credit needs of other deteriorating communities. A new branch is being opened in Austin, a large (138,000 people) far westside community in Chicago. The bank and its affiliates ~ill bring their expertise to provide homeowner loans, rehab large-scale multi-family buildings, and make loans to small business. Expansion to a depressed.rural area is under discussion.
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