A Proven Success in Affordable Housing

Southwest’s St. James Mutual Homes Shows How it can be done

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St. Jame Mutual Homes Board Members, L-R Terrence D. Richardson, Vice-President; Yolanda M. Eaton, Treasurer; Barbara D. Richardson, Secretary; Marguerite E. Parker, President.

It was Christmas time, but there was no wreath on the door of Yolanda Eaton’s second-floor apartment at the St. James Mutual Homes (215 O St. SW). The living room was shrouded in darkness, the curtains were pulled across the windows. Her elderly downstairs neighbor knew that Eaton, who everyone called Yo, had lost her mother only days earlier. But the neighbor hadn’t seen Yo in days, and her car hadn’t moved, either.

The neighbor dialed Yo’s number, leaving her a voicemail. “Now, Yo, you know I’m your Momma now and there’s no need for you to be upset and lonely and sad. I’m right down here,” Eaton recounted the message, years later. She was touched that the elder lady cared about her in her time of mourning.

“But I had to call her and tell her I was in Hawaii,” she said.

Sitting in the office of the St. James Mutual Homes, Eaton and the other members of the cooperative community’s board laugh uproariously at the punchline.

Both the tale and the laughter encapsulate the sense of family and the tenacious positivity shared by members of St. James. First built in 1937 and designated a cooperative in 1966, the well-maintained, quiet Southwest cooperative is a long-lasting, successful example of affordable to moderate income housing. In a period when the District confronts a shortage of housing, especially affordable homes, what lessons can this 83-year-old affordable housing community provide?

Last Effort of the Washington Sanitary Movement

St. James Mutual Homes (here STJMH for short) was one of the last developments built during the final wave of the Sanitary Housing movement, which aimed to provide healthy, beautiful housing at an affordable rate.

The STJMH campus, formerly known as the Kober-Sternburg Courts, actually consists of two separate developments, each arranged around vast, green spaces. Built in 1937, Sternberg Courts is composed of 56 units in 15 two-story red brick flats. Constructed on the other side of the 200 block of O Street SW in 1939, Kober Court houses 51 one- and two-bedroom units. Appearing to be three attached buildings, it is actually a three-story, three-wing brick and cinder building with a single basement.

An unusual set of circumstances led to the affordable housing units becoming a cooperative. In the late fifties, most of Southwest was razed as part of an Urban Renewal plan, where the federal government seized the entire area through eminent domain, razing 560 acres of land. The project destroyed most of Southwest DC and the thriving black community that lived there. In 1959, the Redevelopment Land Agency (RLA), charged with managing renewal, purchased the Kober-Sternberg Courts.

Kober-Sternberg Courts was not razed because the complex was around 20 years old and because it provided affordable housing in the area. With the help of a Federal Housing Authority (FHA) loan the newly created St. James Mutual Homes Cooperative, consisting of current residents, bought the complex from RLA for $500,000 in 1966, RLA having lowered the price to allow reasonable rents after renovations.

It is the first identified example of a complex purchased by a cooperative group represented by tenants. By August, 1967, 98 of the 107 units were sold, mostly to former tenants, most of whom were African American, and some of whom are still living there.

Invested in Multiple Ways

STJMH Board President Marguerite Parker said that the cooperative model, where each member owns a part of St. James, means that residents are literally invested in the entire community, and in multiple ways.

There are no income limits, but part of the application process is a credit check. Monthly carrying charges, which pay for building maintenance and stand in lieu of rent, can range from about $600 for a one-bedroom to $1,000 for one of the few three-bedrooms.

The 83-year-old buildings are in excellent condition, with maintenance living on site–the man liked the complex so much, he applied to become a resident. Neighbors band together to maintain the grounds, with one resident dedicated to picking litter up across the campus and others working on the beautiful gardens situated in large, courtyard lawns.

“I think another reason why they’re so well kept and so well preserved is because [residents] recognize this is not just any old apartment,” Parker said. “This is your home.”

Family

Although buildings have no central air or elevators, it is common for people to live in St. James into their 90s. Parker says at least four residents have lived there since the buildings reopened as a cooperative in 1967.

Parker has lived in the complex for 41 years and said that cost and comfort are part of the reason why residents stay. “Once they get here, people don’t move out,” she said. “When they move out, they’re old and they’re going to their children or to rehab.”

“I ain’t moving. They’re going to have to drag me out of here,” Parker added.

She said that because it’s a small community, everyone knows one another. “If we don’t know your name, we know your face, and we know who’s supposed to live here and who isn’t supposed to live here.” When there is a problem, there is a conversation between the member and the board, a strategy that works most of the time.

While residents describe the community as ‘a family’, for many that is literally true. Several multi-generational families call the cooperative home. For example, Board Secretary Barbara D. Richardson lives in one unit; her son, Board Vice President Terrence D. Richardson lives in another with his wife and children; and her father is yet in another.

Residents will check in on people they haven’t seen and help one another out. They shovel snow together, help each other carry groceries up the stairs and sit and talk on garden benches in the sun. As it comes difficult for residents to climb stairs for reasons of age or injury, the board arranges to move them into main floor units. “People in wheel chairs, they come on and snatch them up like they’re bags of groceries,” Richardson said, describing the helpfulness of neighbors. “They put them in the door, no problem. We don’t have a ramp, but they’re getting in the house.”

A Model Community?

DC Housing and Community Development (DCHD) Representative Tim Wilson said it’s difficult to judge St. James Mutual as a model for future affordable housing. This is in part because the mechanisms that facilitated its construction and conversion to a cooperative, such as the Sanitary Movement and the role of the Federal Government, were specific to their time. However, while DHCD does not spearhead affordable housing projects, the agency is open to receiving cooperative models when the Request for Proposals for Affordable Housing Projects is again issued, he said.

Wilson said that the District does have a mechanism for a cooperative group to purchase housing: The Tenant Opportunity to Purchase Act (TOPA). Residents can use the District’s technical and financial resources to preserve affordable housing by exercising their TOPA rights.

DCHD has offered loans to cooperative organizations exercising TOPA to create affordable cooperative housing. In June 2019, DC Council approved a loan for $3,459,372, funded by the Housing Production Trust Fund, to the 5912 Missouri Cooperative Association, which created a cooperative of 22 affordable housing units in Northwest.

Monica Warren-Jones is the Director of Mid Atlantic Capital Solutions for Enterprise Community Partners, a nonprofit that helps to multiply the impact of local affordable housing development through investment. She said the city could use the Mutual Homes as a cooperative model of a way to preserve low-income and legacy communities, but then would have to be willing to make plans to provide them with some financial support.

That’s because while funds available through DHCD may be sufficient for the purchase of the building, they are often not enough to rehabilitate it, nor support long-term capital expenditures, said Warren-Jones. A sudden, large repair bill that runs into tens or even hundreds of thousands of dollars can be beyond the means of a low- or moderate-income membership, causing an extraordinary increase in monthly fees or requiring them to seek major financing.

It is often more feasible for residents to choose to assign rights to a developer that can obtain sufficient funding on behalf of ensuring long-term affordability rather than to form a cooperative themselves. If the District wanted to encourage cooperatives and encourage accessible homeownership for low- and moderate-income residents, she said, they would need to find a way to subsidize the fees of low-income cooperative owners in order to protect both the building and its shareholders.

She agreed that from a financial perspective, the constellation of circumstances that led to the cooperative make it difficult to replicate. The acquisition of the St. James property took place in a time and place of urban renewal and red-lining, and was purchased cheaply from a public entity. The low cost made it possible for a low- to moderate-income community to pay off the mortgage –perhaps multiple times– as the property appreciated, making it possible for the membership to leverage the property for capital improvements.

“That is impossible to do right now given real estate prices and limited public subsidy,” Warren-Jones said.

Warren-Jones said that her personal, rather than professional, opinion is that the city could offer incentives to low-income cooperatives such as those offered to private developers tied to inclusionary zoning.

Ed Lazere, executive director of the DC Fiscal Policy Institute, agreed with Warren-Jones’s analysis. However, Lazere would like the city to take a step further and directly fund the development of housing cooperatives for lower income residents. “Helping DC residents stay in the city and become homeowners is the best kind of economic development. Our leaders hand out millions to developers, often without asking for anything in return. They should put the same energy and resources into low- and moderate-income homeownership opportunities,” he said.

The unique circumstances of its history aside, Warren Jones said she believes that community is critical to the survival of the Mutual Homes. A really strong group of intergenerational shareholders who are wedded to the building and the community is an asset in itself, she said, and is perhaps one reason that they managed to resist what must have been tremendous market pressure to sell.

Realizing the value of their asset, coop members have worked to protect the property from development. In 2015, the cooperative moved to have the building designated as historic by the District’s Historic Preservation Review Board (HPRB). With the RLA acquisition of property via eminent domain still fresh in collective memory, Board President Parker said that residents wanted to get under the umbrella of historic protection. “The way they were building up all the property and trying to get all the property–we know this can’t stop them if they wanted, but this will slow them down,” she said.

Lessons

STJMH Board members say that community is key to their success. Everyone is invested in the strength of the community as well as the property, which enforces the sense of accountability to one another.

Board members say they try to ensure that they listen to the residents and incorporate their input and needs, building trust with membership.

“If people have buy-in, they will act differently. If they don’t feel like they have buy-in, you’re going to give different results,” said Member at Large William F. Broadus. “I think that’s key.”

You also have to have faith in your people, said Parker. The cooperative often takes a chance on applicants with less than perfect credit, recently admitting an applicant whose record had been jeopardized by student loans. So far, she said, they haven’t regretted it.

“I think that’s what would help with the affordable housing. Give these people a chance. Don’t look at what they make: look at who they are,” said Parker. “They’re human beings who need a place to stay –give them a chance.”

“It’s a business, and we run it like a business, but we keep it like a family,” said Parker, “we can call on them, and we can call them out when we need to, you bet we can.”

Broadus agreed. He said that while it is hard to quantify, there is actual value in the cooperative community. “Outside of the value that you can see visibly, there’s an internal value, or I guess emotional value that’s here that you won’t see anywhere else,” he said. “And I would dare you to go anywhere else and feel the warmth that you feel in this neighborhood.”

Learn more about cooperative housing ownership in DC by visiting coopsdc.org. Learn about DC Housing and Community Development (DCHD) and TOPA by visiting dhcd.dc.gov. Learn more about the work of nonprofit Enterprise Community Partners by visiting EnterpriseCommunity.org. Watch a 50-minute DC Humanities video on how Urban Renewal changed the face of Southwest and its residents at youtu.be/gpJ35Lw0D5w.