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Housing First

news analysis
Housing for the Poor vs. Landlord Rights
Fed Program to Help Rural Poor Threatened by Lawsuits

Listen Listen to Madeleine Brand's report.

Kenneth Tinney

Kenneth Tinney, 26, was paralyzed from the neck down in a car accident when he was 19. He is one of four fixed-income residents of the Riverside Coves Apartments in Riverside, Ala., suing the landlord to remain on a federal program that mandates lower rents.

Photo: Madeleine Brand, NPR News

"I'm scared. It's not right. I'm all for people making as much money as they can, but (the apartment owner) made an agreement to build this place for people who needed it. They knew what they were doing, and they made their committment then."

Nancy Champion, a Riverside Coves Apartments tenant, who currently pays $186 a month -- less than half the market rate for a similar apartment in the area.



Carol Cleveland

Riverside Coves Apartments tenant Carol Cleveland says there aren't any affordable apartments nearby -- at least, none without long waiting lists. "So it'll be back to Birmingham -- tenements and projects. So that's how it goes."

Photo: Madeleine Brand, NPR News


"If you could imaging buying a home and obtaining a conventional 30-year mortgage on your home, can you imagine how you'd feel if the banker... said your pre-payment right, contained in your mortgage was no longer enforceable? That would mean that in essence, you were forced to live in your home for 30 years -- not be able to sell it, not be able to do something else with it before the 30 years."

Jeff Eckland, a Minneapolis-based lawyer representing landlords fighting the federal government over 515 restrictions.



Nancy Champion

Nancy Champion, one of the residents of Riverside Coves Apartments, at the back of the apartment where it meets the river.

Photo: Madeleine Brand, NPR News


Dec. 11, 2002 -- The current low mortgage rates have encouraged more and more Americans to buy homes. But for the poorest of the poor, making the monthly rent is still a struggle, and owning a home remains a dream.

Now, many of America's neediest face a crisis: Funding has declined for a 40-year-old federal program to bring affordable rental housing to poor people in rural areas. NPR's Madeleine Brand reports that some landlords want out of the program -- leaving the tenants with nowhere to go.


Carol Cleveland is one of those needy Americans who benefits from what's known as the 515 Project, a federal program created in the early 1960s that gives developers low interest rates on the mortgages for the apartments and other tax incentives to build low-income housing in rural areas. Divorced and cut off from her former husband, she lives in a 515 development, Riverside Coves Apartments, on the banks of the Coosa River in Riverside, Ala. (pop. 1,564).

Medical problems leave Cleveland barely able to walk. "I have no savings, just my disability check," she tells Brand. "There's not many places you can go with that kind of limited income." The apartment is small and basic, but she says the residents of the apartment look out for each other. "That's really the best part of it."

Living around the corner is Kenneth Tinney, paralyzed from the neck down in a car accident seven years ago, when he was just 19. Tinney's mother sleeps on an air mattress on the floor next to him, and gets up every two hours to turn him. Despite their hardships, Tinney says they like where they live. "We're all like family out here -- it's hard to replace a neighbor and a friend," he says.

Just across the river, however, a new Honda plant means more jobs for the area. "Great for the tiny town of Riverside. Not so great for Carol Cleveland, Kenneth Tinney and the other tenants" of Riverside Coves Apartments, Brand reports.

That's because the owner of the apartments, Charles Martin, is joining hundreds of property owners across the country who want out of the 515 program. They are fighting the federal government to be allowed to pay off their mortgages earlier than the duration of the loan, allowing them to raise rents closer to the market rate -- and with new workers coming into the area, rents are likely to rise.

During the 1960s and '70s, the 515 program was a success, and many more poor Americans were able to afford decent places to live. But a clause in the 515 mortgage allowed owners to pre-pay their debt -- and once the mortgage was paid in full, the owners were no longer bound by the program's rent controls. Many 515 landlords were doing just that, and in the mid-1980s, Congress made it much more difficult to pre-pay.

"If you could imaging buying a home and obtaining a conventional 30-year mortgage on your home, can you imagine how you'd feel if the banker... said your pre-payment right, contained in your mortgage was no longer enforceable?" says Jeff Eckland, a Minneapolis-based lawyer representing landlords. "That would mean that in essence, you were forced to live in your home for 30 years -- not be able to sell it, not be able to do something else with it before the 30 years."

Earlier this year, the U.S. Supreme Court agreed with Eckland that the federal government should be held liable when it reneges on a contract. Martin is suing the federal government, and some of his tenants are suing him to remain in the 515 program.

Funding for the program is down sharply, meaning few new 515 apartments will be created to replace those leaving the program. "So as we get into the next five or 10 years, almost all of the units... will be able to get out of the program. And if the families are displaced, where do they go?" asks Moises Loza of the Housing Assistance Council, a non-profit advocacy group for rural residents.

Other Resources

Housing Assistance Council

National Affordable Housing Preservation Associates




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