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Celebrating 35 Years! Community Housing Improvement Program

Looking Back...Looking Ahead

Annual Report


Board of Directors 2007-2008

President: James W. Jessee CSUC Staff Vice President: Howard Wolff Self-Employed Software Developer/Program Evaluator Secretar y: Jan Camozzi Substitute Teacher/Former Self-Help Builder Treasurer: Tom Simenc Able Plumbing, Contractor Staf f Representative: Kris Zappettini CHIP Program Co-Manager/ CSUC Professor Corporate Contractor: Clarence Lobo CHIP Self-Help Construction Superintendent Walter Dodd Retired Newspaper Publisher Joy Murphy Homemaker Mark Hooper Nurse Verdine Mertens Retired County Conservator Fong Lo Social Security Analyst Irving Schiffman Retired CSUC Professor

CHIP Staff and Tenure

Executive Director Dave Ferrier 25 years Assistant Director Valerie Sutton 8 years Self­Help Program Imelda Michel 19 years Jill Quezada 12 years Rural Amelia Murillo 9 years Judy Orozco 7 years Urban Yesica Ramirez 3 years Thor Vue 1 month Property Management Dave Hodges 15 years Roberto Rojas 8 years Janell Boirie 6 years Sid Bridges 5 years Campbell Commons Michael Madsack 2 years Jason Gray 1 year East of Eaton Christine Brazil 1 year Richard Castro 2 years Abel Espinoza 6 years Longfellow Apartments Gina Bittner 3 years Turning Points Commons Marsha Grinstead 2 years Jim Pemberton 8 years Doug Sutton 9 months La Vista Verde Lilia Osorio 8 years Manuel Reis 7 years Shotover Inn Apartments Angelica Perez 1 year Las Palmas Apartments Angelica Perez 1 year Brickyard Creek Apartments Amanda Erickson 1 year Mark Davis 2 years David Eichman 6 months Rancho de Soto Apartments Cupertina Garcia 2 years Javier Salas 1 year Hazel Hotel Trish Stilwell 3 years Linden Apartments Rachel Riggs 9 months James Ermacoff 2 months Murphy Commons Steve Karnowski 1 year Aaron McLaughlin 1 year James Evaro 2 years Marymead Park Jacqueline Levesque 1 year Michael Rocks 1 year Robert "Sam" Davis 1 year Community Housing and Credit Counseling Center Sonia Rodriguez 14 years Annie Gallardo 1 year Robert "Wes" Lobo 6 months Resident Services Washington Quezada 6 years Multi-Family Housing Marie Demers 17 years Kris Zappettini 14 years Accounting Anne Monlux 15 years Holly McCormick 11 years Debbie Watkins 6 years Gayle Palys 1 year Clerical Pao Thao 5 years Raquel Calva 1 year Land Department Gary Martone 24 years Veronica Castro 5 years Construction Clarence "Bino" Lobo 26 years Rich Brown 7 years Field Staff Joe Martin 20 years John Persell 19 years John Pfister 12 years Scott Azevedo 10 years Leonardo Romero 8 years Joe Schmeltzer 12 years Jason Marr 11 years

President's Message


Looking Ahead


Annual Report

CHIP would like to thank the contributors to this 2007-2008 annual report, including Stan Keasling, Tom Lando, and Fran Wagstaff. Report layout and design by Tempra Board & Associates.

Cover Photo: One of the newly completed houses at the Palm Crest Village development in Oroville, part of the Self-Help program. Photo by Jill Quezada. Inset: Bernabe and Maria Trenado move into the home they helped to build at Blair Subdivision in Orland. Photo by Tempra Board.

Chico mayor Andy Holcombe (left) and CHIP Executive Director Dave Ferrier at a recent grand opening celebration.

A retrofitted home in the Marymead Park development in Marysville. Photo by Marie Demers.

n this time of financial crisis and uncertainty, and a collapse in the housing market, new construction, and much more, CHIP remains a steady ship well Policy by the CHIP Board of Directors more afloat, with oars in the water steadily than a year ago, pledging us to seek as high clients' experiences, as well as others from outside the moving forward building homes, a "Green Standard" for all future single and agency, tell their story. I am ever so grateful to attend well managing the multi-family multi-family housing development as we can the ground-breaking and especially the block parties to celebrate the completion housing we have, and keeping our afford, CHIP staff is of a self-help housing project eyes on the mission. working to design all To see their joy in achieving a Jim Jessee has been with our clients. To see their We are the local building industry future self-help and the President of CHIP foothold on the American Dream joy in achieving a foothold and suppliers' port in the storm multi-family housing since 1990 and a on the American Dream is right now, as we have maintained as green as possible is ever so heart-warming, down member of the Board ever so heart-warming, and our historical pace of new self-help while maintaining since CHIP was right patriotic, and the reason down right patriotic, and the housing construction, 45 homes this affordability. We incorporated in 1973. for CHIP. reason for CHIP. year, and 116 units of multifamily have hired a local Jim will retire as After 35 years of housing on the way. There is little consultant, Joshua Director of Academic involvement with CHIP, I am else going on. Pierce with Practica Facilities, Publications, and Database Services Still, we are very much feeling Consulting. Practica has been hired to review grateful to still be on the Board and blessed with the from CSU Chico in the pinch. Marketing is getting and assess CHIP's practices and needs, provide honor of this position. I thank the CHIP membership November after 35 tougher, with our clients afraid to training and planning services, assist in goal- and staff for their continued support. years of service to the get into the market, and believing setting/strategic planning and help with University. that house prices and values will implementation of all of the above. Joshua is fall further. None of our financing working closely with our VP for Construction, nor our clients' mortgages have been done under the Bino Lobo, and we will be testing different green build "sub-prime" gambit, nor other suspicious practices strategies in the future. An Urban Self-Help project that have caused this crisis. A few of our clients have in Chico and the Paradise Multi-Family project are gotten themselves into credit trouble with credit cards, targeted to be our first "Green Projects." or taking seconds beyond their means, but in the main In addition CHIP Staff and Board are working to this is not a major issue in our homes. improve corporate sustainability on many levels. Nevertheless, even our steady and traditional We need to ask your help in recruiting more associate financing resources are tightening up as money for members to our organization. We are particularly making loans becomes an increasing problem for interested in broadening our geographic representation everyone. We are concerned and monitoring this as and need more members from outside of Chico, who well. We cannot believe that the government would can become board members in training for the future. choose to reduce the support for low-income housing Please pass along any names of individuals you feel construction, especially now, and CHIP is well may be interested in supporting the efforts of CHIP. positioned to be a reliable partner in those efforts. This year's annual meeting and report theme is Palm Crest Village home. Photo by Jill Quezada. Upon the adoption of a Corporate Sustainability to minimize the administrative "blather," and let our

Jim Jessee

· CHIP Annual Report 2007-2008

CHIP Annual Report 2007-2008 ·

Self-Help Housing Programs

Urban Self Help

The Urban Self-Help Housing Program is a firsttime homebuyer program. The primary mortgage loans are provided by the California Housing Finance Agency (CalHFA). To date, CalHFA has provided the primary financing for CHIP to build 407 homes in the counties of Butte, Shasta and Sutter. Communities eligible for this program are located in Urban areas.

Looking Ahead

By Tom Lando


n the North State, the Self-Help Housing Programs continue to make the "Dream of Homeownership" a reality by handing keys to deserving homeowners who, with the help of CHIP, built their own new home. These new homeowners have built more than a home, they have built friendships, neighborhood, and community. Achieving homeownership is often the first tool of empowerment which motivates new homeowners to seek opportunities to improve other areas in their lives and the lives of their children. Homeownership transforms lives often leading to the pursuit of a higher education, job enrichment, and community involvement. The joint efforts of dedicated CHIP staff, the funders, lenders, and the self-help participants make the Self-Help Program a success. In addition to United States Department of Agriculture (USDA) - Rural Development and the California Housing Finance Agency (CalHFA) funding, state and private lenders have provided subsidy for mortgage assistance to eligible participants. The additional subsidies help to reduce the total monthly mortgage payment. CHIP's Self-Help Housing Programs serve eligible households whose income is at or below 80% of the area's median income. Other eligibility requirements include: stable income, acceptable credit history, good rental history, repayment ability and willingness to provide "Sweat Equity" construction labor on their homes. Sweat Equity involves working a minimum of 30 hours a week until the homes in their group are complete. Participants form a group of approximately 6 ­ 10 who work together throughout the course of construction on the houses in their group. Self-Help Housing Program's staff provide the following services: keep current interest lists for all communities, provide clients assistance with completing their pre-application, prepare the financing application and submit to lenders, secure low interest mortgage loans, assist with loan closing, provide education and oversight throughout the course of construction through experienced construction staff, and educate clients on mortgage and nonmortgage responsibilities.

Rural Self Help

Photos: (top left) A future homeowner frames a home in the Blair Estates development in Orland. Photo by Tempra Board. (above) A row of homes in the Blair development. Photo by Judy Orozco. (bottom left) Homeowners at the Palm Crest Village development. Photo by Imelda Michel.


Tom Lando is the former City Manager of Chico and is now the owner of Lando and Associates Planning, Administration, and Management Consulting Firm. He also lectures at California State University, Chico and is an adjunct faculty member of the University of Southern California. He has lived in Chico for more than 25 years.

Rural Self-Help Housing Program has built 1,126 homes in the counties of Butte, Glenn, Lassen, Shasta, and Tehama. USDA-Rural Development eligible communities for this funding have a population of 10,000 with some exemption areas.

Completed South Jackson, Red Bluff, Tehama County Blair Estates Subdivision, Orland, Glenn County Blair 2 Estates Subdivision, Orland Ledgerwood Subdivision, Orland Locust Estates Subdivision, Gridley, Butte County Bowwood Estates, Gridley Shasta County 7 20 17 7 11 13 6 14 Under Construction Next Year

Homeowners build fencing at the Palm Crest Village in Oroville. Photo by Imelda Michel.


Under Next Construction Year

PalmCrestVillage,1810 Phase2 Thermalito(Oroville29 area),ButteCounty

he housing market in 350 words? How about just one...Wow. I purchased my first house in Chico in 1980 during a time of "bidding wars." The prices here were twice what they were in Visalia where I came from for less house. Interest rates were 12% headed for 17%. For the next five years prices dropped slightly. My next purchase was in 1988 and was also a bidding war. This time I sold the house two and a half years later for 75% more than we paid. But only two years later it was worth 60% less and the common knowledge was that we would never build another single family detached home in Chico ­ they were too expensive and no one could afford them. Yet in another five years prices were increasing by double digit percentage points annually, bringing us back to the bidding wars. Then there is now. We are in perhaps one of the more significant lending and housing crises ever faced by this country. However, the fact remains that our population is projected to grow in California by millions over the next 20 years. These people will also need shelter, and most want the single family detached home. The City of Chico recently conducted a survey in conjunction with its general plan update in which 81% of respondents said that they preferred single family detached homes. It's true, desire does not equal ability to buy, but the North State area is primed to grow at an incredible rate and I believe the market will turn yet again, helping to make the single family home attainable. I believe the future of our area is very bright. Our job is to determine how to meet the demand for housing in a way which adds value to all our communities in the North State. It is clear that all the cities will be demanding that development pay its own way, not just from an infrastructure perspective but also fully covering service costs such as Police and Fire. The expectation should be that new development of any type will carry an extra fee or tax burden through, for example, community finance districts, to ensure revenue neutrality. Now is the time to plan, prepare and shape the vision of tomorrow, which this new housing model can help achieve.

CHIP Annual Report 2007-2008 · 2

Multi-Family Housing

Rental Housing Development

Before (below) and after photos of the Marymead Park rehabilitation project. Photos by Marie Demers.

Grass Roots Movement to Social Enterprise: 35 Years of Non-Profit Housing

By Fran Wagstaf f

Looking Ahead


ehabilitation began on the 68 unit Marymead Park development in Marysville in October of 2007. The project is a collaborative effort between CHIP and Mid-Peninsula Housing Coalition (MPHC). Fran Wagstaff, former Executive Director of CHIP and now former Executive Director of MPHC called upon CHIP to partner on the acquisition and construction management of this severely dilapidated, HUD Project based Section 8 complex. The acquisition of Marymead Park necessitated going through the HUD Mark-Up-To-Market program and, in order to finance the substantial rehabilitation of the units and create a community room for resident services, low-income housing tax credits and private financing from Mid Peninsula and Union Bank of California were secured. The project consists of 42 single-story duplex units, 16 townhouse duplex units, nine single family homes, a manager's house and a community room conversion intermixed within a subdivision with privately owned single family residences built in the 1950's. As of the end of September, 2008, 46 units have been completely rehabilitated and tenants have been able to move back into their units. Construction continues on the remaining 22 units as well as on the community room and swimming pool. Completion is scheduled for the end of 2008. · CHIP Annual Report 2007-2008


Property Management


HIP's Property Management department experienced a significant expansion during the past seventeen months; at the end of April of 2007, CHIP was managing 426 units, mostly owned or controlled by CHIP. Three months later, on August 1, 2007, CHIP was managing 610 units, an increase of 43%. In addition, two of the new properties in Redding and Marysville expanded the department's service area at both the north and south ends. The past year has been spent insuring that all of CHIP's properties receive the oversight necessary to provide safe, well-maintained and attractive affordable housing at the standards that have been set by the CHIP Board and staff. CHIP-managed properties continue to experience very low vacancy rates and high customer satisfaction.

Murphy Commons, below, is a recently completed example of CHIP's successful multi-family developments and property management services. Photo by Kris Zappettini.

After 25 years heading up Mid-Peninsula Housing Coalition (Mid-Pen), one of the largest affordable housing developers in Northern California, Fran Wagstaff retired on July 1, 2008. During a tenure that started in 1983, Fran guided MidPen in developing and operating more than 6,000 affordable homes occupied by approximately 14,000 residents in nine counties. Fran was Executive Director of CHIP in the early 1980s

ommunity Development Corporations (CDC's) were first established in the late 60's and early 70's. Focusing on affordable housing and community development, they were initially funded by federal grants, notably from the Office of Economic Opportunity (OEO), and enjoyed project-based funding. As these programs gradually disappeared, a number of early CDC's that relied on them too heavily also disappeared. Other organizations, like CHIP, while thinly funded from the beginning, were less bureaucratic and more diversified, and were therefore better able to survive political and economic changes. When I joined CHIP as a University Year for Action (UYA) volunteer, more than 30 years ago, I had no idea that this would become a lifetime career in affordable housing. (There were no careers in non-profit affordable housing!) As part of the very first CHIP "class," to participate in the UYA program, I, and 20 or so other student volunteers, brought the idealism of the 60's and a fearless approach to tackling issues, but little or no applicable skill or experience. For two years, I worked on a CHIP construction crew, performing major work on owner-occupied houses, while taking weekly classes in construction management at Chico State University (CSUC). Upon Kevin Campbell's departure, I found myself the CHIP executive director, with a tiny budget and two paid employees. There was no shortage of need. Much of the housing owned by low-income seniors was in an advanced state of disrepair, especially in Chapmantown. After a slow, disorganized start, the housing rehabilitation program got rolling and soon several jobs could proceed concurrently. Interest in the program grew and within three years, five crews were working. CHIP became, in addition to a community rehabilitation program, a self-help housing builder and a multi-family housing developer. By the time I left CHIP and moved to the Bay Area in 1983, CHIP was ready to start construction on Turning Point Commons, owned land in Gridley for self-help housing, and owned the Shotover Inn, although no funding was on the horizon for its rehabilitation. This process of evolution of programs and funding was typical of the early CDC movement. In the past 20 years, the number of CDCs nationally has more than tripled to over 4,600. They have collectively developed or rehabilitated more than 1.25 million units. This growth has been in response to deteriorating affordability and fueled by available funding. In the mid 80's, federal legislation, the Community Reinvestment Act (CRA), required banks to lend to their entire credit community, including low-income people. For most banks, this was addressed through lending through the CDCs that served low-income communities. This opened the private credit markets to non-profit developers. Since 1986, the Low-Income Housing Tax Credit Program (LIHTC) has become the nation's major rental housing production program. Non-profit developers are now recognized nationally as the success story of affordable housing. Many, such as CHIP, have grown to a regional scale, and own and manage significant portfolios of real estate. These organizations are not exempt from real estate cycles, however. The volunteers who started CHIP and other CDCs 30-plus years ago would hardly recognize the social enterprises which have emerged from those early grassroots organizations. CDCs will have to draw on a history of resourcefulness and innovation. Even today's complex organizations are mission driven, and have their roots in their communities. As long as these organizations are adaptable, diversified, and have strong partnerships and sterling reputations, they can continue to thrive despite the difficult times ahead. CHIP Annual Report 2007-2008 ·

Community Housing and Credit Counseling Center


Looking Ahead

Continued from previous page. Tenant-Based Rental Assistance We have also carried a case load of homeless or potentially homeless families and individuals through our Chico Tenant-Based Rental Assistance (TBRA). Clients in the TBRA program attend monthly budgeting counseling sessions, and are now very involved with managing their credit. CHCCC takes an active role at the TBRA board meetings twice a month. CHCCC provided intensive case management services to 10 clients this year. In conclusion, we've had a full house at our Chico and Oroville Homebuyer Workshops, and the Reverse Mortgage Counseling has kept us busy both in person and over-the-phone. On top of all this, our staff still found time to receive professional educational trainings and certifications by HUD and NeighborWorks. It has been a busy year and we are set to continue this important work in our North State communities.

It is safe to say that the number of homes faced he past year marked an incredible transformation and growth for the Community Housing and with foreclosure in 2009 will exceed that of 2008 Credit Counseling Center (CHCCC). During and is why so many resources are being allocated the past 12 months our center has moved into a larger toward the problem. CHCCC is scheduled to assist 200 foreclosure clients and facility, increased consumer has currently been able to credit counseling, and CHCCC is scheduled to assist 200 help almost 50% of them developed and implemented stay in their homes. This a Foreclosure Prevention and foreclosure clients and has currently work is long and troubled. Intervention Program as well been able to help almost 50% of Our progress is dictated by as merged CHIP's Resident looming legislation, poor Services Program all under them stay in their homes. economic conditions and the one roof. In the wake of all failing of banks and financial this transformation, we're proud to say that CHCCC has successfully met and institutions. However, we still made great leaps as we are meeting our program goals and expectations. Our exceeded our projected goals for this year. Wow! CHCCC continues providing services at the Family goals for 2009 are to continue to develop service action Resource Center in Corning where we are part of plans and program facilitation. CHCCC is becoming the leader in Foreclosure the Tehama County Cal Works Program, providing budgeting and financial management counseling. We Prevention in Butte County as also provide counseling to clients through many other well as in the North State. The programs such as Alternatives to Violence, Tehama responsibility given to our agency County Department of Education, and Tehama County is a testament to the trust earned Department of Social Services. CHCCC is now being by CHIP and CHCCC's ability recognized as an empowering program by many to meet the challenges faced with community development residents and City of Corning representatives. and growth by local, State and Foreclosure Prevention Program In the Foreclosure Program, with significant Federal Government agencies. In support from Bank of America, we unquestionably 2008, CHCCC staff participated exceeded our goals! It has been an incredible year with the City of Chico, Legal for homeowners. The ups and downs have been many Services of Northern California, and the future is still very uncertain for them. The the Butte County Bar Association foreclosure problems have finally gotten the attention and the Chico Association of of the government as well as the lender/servicers. Realtors in presenting a forum on Home owners are needing help daily to combat Foreclosure Prevention that was pressure from their servicers to pay their mortgage well received by the community. payment and just not having the money in the bank. Most have exhausted credit card limits and family members for short term fixes and now the inevitable of imminent foreclosure is becoming a reality. The number of homeowners requesting our services increases day by day. Resident Ser vices Program The merging of the Resident Services Program into CHCCC has been a true success. The coordination of services has expanded to CHIP's new

apartment complexes, Murphy Commons in Chico and Linden Apartments in Redding. Services offered to the residents range from language arts, video productions, preparing a Durable Power of Attorney, mental health, and hosting Girl Scouts Troop activities. Resident Managers at each of the properties work with CHCCC staff to coordinate and implement services that benefit the residents of CHIP's rental housing. We expect this program to continue its strong development in the coming year, so stay tuned. Credit Counseling This year CHCCC has also been busy running credit reports and conducting credit counseling for potential homeowners from the CHIP's Self-Help program as well as the City of Chico, City of Oroville and Town of Paradise mortgage subsidy programs. Clients are directly referred from CHIP and other local lenders. Continued on next page.

By Stan Keasling

merica is in a very tough spot today, and the squeeze on the national economy is reflected in the squeeze on homeowners across the land, but particularly in California. There was a lot of money to be made in building homes, making mortgages and selling those mortgages on the secondary markets. The financial markets ignored the fundamental Stan Keasling is the strictures of safety and soundness in the lending that was made available. There was a Chief Executive Officer of fantastical view that the value of the underlying real estate would always protect even the the Rural Communities most unsound loan. Folks with average incomes decided that they should live in homes that Assistance Corporation, by any standard represented conspicuous consumption. Homes that were clearly unaffordable a non-profit providing were made affordable through gimmicks and subprime products that left the borrowers at the housing and community mercy of volatile financial transactions or worse guaranteed that when it came time to pay the development services true cost of the home, the buyers would not have the resources. And the government having throughout the Western lived through Enron, and the Savings and Loan crisis and numerous other failures to regulate United States. He has the private greed in the economy, once again buried its head in the sand until the problem has worked in the field of grown to crisis proportions. affordable housing for What do we do now and in the future? Self-help housing agencies have long known that there more than 30 years. is no substitute for a meaningful down payment in buying a home. The success of the families who complete the program demonstrates time and again that sweat equity is a meaningful down payment. Other first time homebuyer programs need to exact an equity investment from the new buyer. People need to save for a home, and demonstrate their readiness for home ownership by investing their earnings in the home. I don't think that 20% down is realistic in today's economy, but certainly a mortgage that pays not only 100% of the purchase price but also finances the closing costs is equally out of touch with the market. Housing counseling programs and individual development accounts (IDA) both facilitate the kind of savings and financial literacy that will lead to successful homeownership. Housing counseling is a key to success and to the stabilization of the current market. If our educational system does not teach financial literacy, where is the average person expected to learn it? From the credit card companies that send us so much junk mail offering new opportunities to borrow and new credit limits to allow even more instant gratification? Creating savings programs that are also tied to consumer education, credit counseling and a basic understanding of real estate transactions is key. Housing counseling also needs to play a role in cleaning up the current mess. There are a lot of folks in trouble who need assistance in finding traditional mortgages, or help in negotiating relief from their lenders. Nonprofit organizations need to play a key role in assisting with the disposition of bank owned properties as well. These vacant homes are becoming a blight, and they represent an opportunity to provide an affordable housing product in today's market. Getting first time homebuyers into these properties at affordable terms is the silver lining in the foreclosure mess of today. CHIP is working in all of these areas, and RCAC is proud to be your partner in a number of these ventures. Thank you for stepping up to deal with the issues. CHIP Annual Report 2007-2008 ·


Photo (left): A group of new homeowners through CHIP's Urban Self-Help Housing program attend a CHCCC homeowners workshop in Oroville. Photo by Yesica Ramirez.

Community Housing Improvement Program


1001 Willow Street Chico, CA 95928 (530) 891-6931

Non-profit Organization US Postage PAID Permit #417 Chico, CA

Address Service Requested.

Celebrating 35 Years!

Annual Report 2007-2008

President's Message Self-Help Housing Programs Multi-Family Housing Community Housing and Credit Counseling Center Land Development 10-Year Goals / Financial Report

Palm Crest Village home. Photo by Jill Quezada.


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