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Advisory Council Member Spotlight: Michael Mitchell, Managing Director, The Exeter Group | ||||
In this Advisory Council Member Spotlight, we asked Michael Mitchell his thoughts about faith-based community development and how the competitive Affordable Housing Program (AHP) has evolved over the years. Michael is a Managing Director at The Exeter Group, a Chicago-based executive search firm; he also serves as Chairman of the Board of Directors for South Side Community Federal Credit Union, and is on the board of St. Edmund’s Redevelopment Corporation. Q: You’re on the board of St. Edmund’s Redevelopment Corporation (SERC), a not-for-profit organization working to revitalize the Washington Park neighborhood in Chicago. SERC was established by leaders of St. Edmund’s Episcopal Church in 1990. Why do you think so many community development corporations can trace their roots back to the faith-based community? A: When looking at the genesis of urban-centered faith-based community development corporations, those that specifically were created after the expansion of urban renewal initiatives in the 1970’s, it is important to remember the social context that fostered the need for their creation. This context included the massive migration of the urban middle class from inner-city areas, the deteriorating conditions of the existing housing stock, a lack of focused and community-driven civic investments in communities of color, commercial and institutional divestment, and community leadership who did not have the means or experience for initiating sustainable community development. A faith-based institution, such as SERC, has and continues to have a vested interest in its neighborhood. Urban faith-based groups with access to financial resources and development talent have contributed to revitalizing housing and promoting economic development, and do so for several key reasons:
A: I just missed the launch of AHP when I joined the group in August 1990. The program was in its infancy and the regulations were in a constant state of development and evolution. Initially, use of AHP subsidy reduced the FHLBC advance rate to a member, who then passed it on to the project sponsor. Interest rate risk made this option less desirable and inherently risky for the Bank, as well as developers, so toward the end of my term we began to award only direct subsidies. The annual AHP allocation was very low when compared to today’s numbers – almost an eight-fold increase from then to now. Development costs were much lower, around $75,000 per unit, and the average AHP subsidy awarded was just below $3,000 per unit. Other significant changes over time include more comprehensive compliance monitoring and development of transparent, objective scoring guidelines. | ||||
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