The ripple effects of a new federal law related to the distribution of Housing and Urban Development funds has forced a mutually beneficial partnership between Belleville Community Development Corp. and Belleville School District 201 to end.
The Belleville CDC, a nonprofit organization, and District 201 have worked together to construct houses for low to moderate income families the last nine years with Belleville East and West advanced trade construction students providing the free labor. However, the Consolidated and Further Continuing Appropriations Act of 2012 has put restrictions on HUD funds that makes the project no longer viable.
District 201 Assistant Superintendent Brian Mentzer said the federal law placed stipulations on the grant funds from HUD, which are administrated through the St. Clair County Intergovernmental Grants Department.
One stipulation states a new house constructed with HUD funds must sell within six months, or it must become a rental property. Mentzer said the district isn't interested in becoming landlords. "That's not the goal of the program," he said.
Ruth Ann Erdmann, president of the Belleville CDC board of directors, agreed. "For it to be a rental, that just wasn't going to work," she said. "We can't work under those rules. We are just little fish in a big pond."
During the first six years of the program, Erdmann said the houses constructed by the Belleville East and West students would sell within six months. Then the housing market crashed, and now it takes longer to sell the homes.
The house constructed by high school students last school year through the Belleville CDC partnership located at 113 Rosette Drive in Belleville was on the market for over a year, and the house built by students this school year at 10 Jennine Drive in Belleville was just put up for sale.
Erdmann said contracts to purchase both homes have been signed and closings are expected to take place before the end of July.
Though the houses are priced at 20 percent below market value, Erdmann said it can be difficult for low-income families to qualify for home loans.
"The people that buy these houses are first-time home buyers," she said. "People who might have thought they would not be able to achieve the American dream of owning their own home."
As a result of the changes to the federal law, Mentzer said the partnership between the district and Belleville CDC won't be able to continue. "We are the unfortunate benefactors of some constraints that didn't apply to us or the way we did business," he said.
The discontinuation of the partnership is "unintended consequences" of the new stipulations in the law, according to Mentzer. "We understand these are constraints we don't have control over," he said. "We have to make the best of it."
He said district officials "explored every avenue" and couldn't find a way around the new regulations for HUD funds.
Erdmann agreed. "After much research and many inquiries the BCDC believes that for us, there is no way to get around this," she said.
Mentzer praised the district's relationship with the Belleville CDC and advanced trades construction instructor Jim Kinsman.
"It's been a great run," Mentzer said. "We are saddened it has to end."
The district's current contract with Belleville CDC ended Sunday.
Response from Washington, D.C.
Belleville CDC board member Joseph Zacharski was so concerned about the new stipulations placed on the HUD funds that he wrote a letter to U.S. President Barack Obama at the end of last year.
In his letter, Zacharski said the end of this project will cause students to suffer. "They will not be able to take advantage of the opportunities to learn," he wrote. "But beyond that, the city gets no new home to fill in that neighborhood, the county gets no new home for the tax roll and the potential buyer's dream goes up in smoke. Pretty bad, huh?"
In closing, Zacharski asked if an exception could be granted.
A response arrived almost six months later on June 7 from Yolanda Chavez, deputy assistant secretary for grant programs in HUD's Office of Community Planning and Development.
Chavez letter thanked Zacharski for contacting Obama. She explained the purpose of the new requirements is "to improve the performance of participating jurisdictions and to improve project selection.
"The FY 2012 Appropriations Law does not provide HUD with authority to waive or otherwise make exceptions to the deadline for sale of homebuyer units requirement," Chavez stated in the letter.
Mentzer said the district's advanced trades construction program will take a different direction next school year.
"We want to find some new ways to develop curriculum that will give the students similar skills they acquired by building a house," he said.
Erdmann isn't sure what the future holds for the Belleville CDC. She said the nonprofit group will remain in existence until the last two houses sell.
"I'm not quite sure if there is anything else for us to do," Erdmann said. "We are sorry to see it go."
Future high school students and the community will suffer from the dissolution of the district and BCDC's partnership, according to Erdmann.
"This is about what the students are missing out on. It's also a bit about what the community is missing out on," she said. "We can just be proud of what we have been able to do for the past nine years and appreciate the support we have received from the City of Belleville, District 201, St. Clair County Intergovernmental Grants Department, and numerous businesses and local Rotary clubs and Kiwanis clubs."
Contact reporter Jamie Forsythe at 618-239-2562 or firstname.lastname@example.org. Follow her on Twitter at twitter.com/BND_JForsythe.