Nueva Villas

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During President Obama’s visit to Arizona to announce new housing incentives, he made a surprise stop to Nueva Villas at Beverly housing development, which had been affected by the housing crisis. Chicanos Por La Causa (CPLC), with the help of the Housing and Urban Development Department (HUD), purchased the development and hired local residents to refurbish it. CPLC President and CEO Edmundo Hidalgo talks about the Nueva Villas development.

Jose Cardenas: Good evening. I'm Jose Cardenas. President Obama made a surprise visit to one housing subdivision in Phoenix affected by the housing crisis. Find out more about how one organization was able to reconstruct the area and make homes available to families.

And the story of the Carl Hayden high school robotics team Victory is now a movie. We'll talk to one of the coaches and team members about the film. That's all coming up next on "Horizonte."

Funding for "Horizonte" is made possible by contributions of the friends of eight members of your Arizona PBS station.

Jose Cardenas: Thank you for joining us. Earlier this month, before President Obama gave his speech at central high school to speak about housing incentives, he made a surprise visit to Nueva Villas at Beverly, a housing development in the Phoenix south mountain corridor, which has been affected by the housing crisis. Chicanos Por La Causa, with the help of the department of housing and urban development, purchased the development and hired local residents to refurbish it. We will talk more about Nueva Villas in a moment, but, first, here is what the president had to say during the unexpected stop.

Video: What the community was able to do, through a nonprofit, purchase some of these homes that were empty, vacant, hire local residents to help reconstruct, and now able to make homes available to working families, family of four that may be making $40,000 to $60,000 a year has a chance to buy a home --

Jose Cardenas: Joining me now to discuss Nueva Villas at Beverly is Edmundo Hidalgo, president and CEO of Chicanos Por La Causa. Welcome to "Horizonte" again. This is pretty special. As I understand it, it was unexpected.

Edmundo Hidalgo: Very much so, Jose. Over the holidays we had been contacted the administration holding an event in Phoenix. Our expectation was that that morning, the secretary, secretary was going to be coming out and doing a site visit on a project that had received funding through the office of HUD. And --

Of which he runs.

Edmundo Hidalgo:And so 30 minutes prior to the visit, secret service comes in and says, by the way, you know, the president is coming as well. And, so, at first it was a great surprise, but then it was a great panic, right? Because we had not prepared, you know, for the president coming to a particular site. And so, you know, it was 30 minutes of preparation in anticipation of his arrival.

Jose Cardenas: So, I have seen a longer version of the video we just saw, and it shows you there standing in front of the president and your hands are moving a lot explaining what this was all about. I take it he was a quick study and he seemed to have a good grasp of what you were trying to do.

Edmundo Hidalgo:Very much so. He actually understood the challenge that many of our communities had gone through. He was obviously, you know, making a speech, later that morning that was going to address some of the changes and some of the administrative decisions that he was making in regards to some of the HUD programs that have been impacting, you know, many of our first-time home buyers. This is a conversation that we had been having for the last several months with the secretary in regards to higher mortgage insurance payments, as well as other barriers that were not permitting first-time home buyers and those families that were trying to buy in our communities, be able to acquire a loan. And he was very knowledgeable. He understood the situation of the market. He understood the barriers we are dealing with and was there to get a firsthand view of some of the market situation that was going on in Arizona, but specifically south Phoenix.

Jose Cardenas: We have a picture of some of the homes in this particular development and we will put them on the screen. When you think of an area that most consider south Phoenix, and also think of it as pretty rundown. These are gorgeous homes. Tell us how this came to be.

Edmundo Hidalgo:This sub division actually originated as being a 50 home subdivision, and as what happened with many other areas, you had a developer that, you know, started to develop these homes, but because of the financial crisis, and because of the crash of the market, then it was no longer a viable project. They build out 25 of the homes but left 50 lots vacant, and so over a three, almost four-year period, they accumulated trash and so forth, and so a community that was supposed to be a fully-developed area was only half built. We had the opportunity to go in and acquire the 25 lots and over the last year and a half, we have been able to sell eight of the 25 that were remaining, and right now we have offers on seven additional homes. For us, you know, even prior to the president's visit, you know, we have seen an increase in the -- for this type of a product, and especially this price point. It is still a very affordable home in this particular subdivision.

Jose Cardenas: You talked even before the president's visit, you had seen an increase in demand. What impact did the president's visit have and all of the attendant publicity?

Edmundo Hidalgo: A lot of it had to do with the remark that he was making and his special interest in trying to help people move up into middle class. And, so, he recognized this is one of the conversations that we're having that for many families, their home is their single biggest vehicle in being able to accumulate wealth. So, folks in many cases, don't have stocks, don't have other means to really move up into the middle class, and, so, through that equity that they are able to build through home ownership, that is how they acquire, build wealth in many cases. So, looking at this particular home as an example of that, the price point in the homes that you saw in -- on the screen were $135,000 for a three-bedroom, 2 1/2 bath. You know, these are homes that use energy efficiency. Use 2-by-6, better construction than most homes. Really talked about the quality, but also the long-term affordability in this type of a program.

Jose Cardenas: Speaking of equity, one of the unique things about this program, one of many unique thinks about this program, the purchasers actually provide some of that with their own sweat. Sweat equity, so to speak.

Edmundo Hidalgo:Yeah, for us it is always important to try to bring in value into many of our programs, right. So not only are we looking to hire, you know, local contractors from the area, because for us, you know, that shows an investment and that shows local impact, but then we also try to figure out ways to allow the homeowners to earn some of that equity, sweat equity as well, and those are just features that we try to incorporate in order to make the home even more affordable.

Jose Cardenas: Talk about how people can become eligible for this particular project. I want to talk about some of the other things that CPLC is doing in this area.

Edmundo Hidalgo:People can contact the main office. We usually start with pre-purchase counseling. We like for individuals to first of all understand what is the home mortgage all about and what is the benefit. Many people assume that for whatever reason they don't qualify, and in many cases because they assume they have bad credit or that they have something in their history that would prevent them from acquiring a home. I tell folks, this particular home that we showcase, the payment, principle, interest, taxes and insurance on that particular home, is less than $1,100. Less than $1,100, for a three bedroom, 2 1/2 home. People are paying more than that in the rental payment. Often people disqualified themselves because they don't know what the process is about. We are trying to encourage individuals to come and ask questions, understand more, and go through the education and determine whether you are really ready or not to be a homeowner at this point.

Jose Cardenas: Are there specific requirements? Do you have to be at a certain income level before you can apply to get one of the homes?

Edmundo Hidalgo: Not in this particular neighborhood. A variety of incomes and price points. Something else we did with the development, we brought features that really brought a community focus. So, there is porches, and in this particular model, garages coming in through the side of the house. We wanted to build a community where people could walk outside, actually meet their neighbors and make it more of a community feel to it, you know, than just rowhouses with a bunch of garages in the front. We're hoping that that is what is going to create more community and invite people to really come out and meet their neighbors.

Jose Cardenas: I know one of the other points of emphasis and some of your other projects, and I wonder if you are doing this here, too, energy efficiency.

Edmundo Hidalgo:Absolutely. When we look at affordability, long-term retention of a home, those are the things that sometimes -- they don't add a whole lot to the cost of the home, but long-term, the savings, you know, really benefit the homeowner. So, I mentioned the construction. Traditionally most homes use a 2-by-4, really the size of the lumber. In this case, we use 2-by-6. We try to use other features, water conservation, better R-rating on insulation. Things that allow the homeowner to -- over the period of the 50 years, 30 years, whatever the mortgage is, can translate into some real savings.

Jose Cardenas: So, I know that CPLC like everybody else had to tighten their belts during the downturn. Real estate was one ever the areas most affected. Had you now starting to build that back up? What other projects are there on the horizon for CPLC in this area?

Edmundo Hidalgo: We are seeing an improvement in the economy, improvement, especially in real estate. Especially in this price point. What we saw over the last eight, nine months was the values really increased in many areas, and the last several months, you know, things have gotten a little flat again. And, so, you are not seeing the increases in values, but for this price point, and especially for first-time home buyers, there is a large demand, because interest rates are still low and you don't have a large inventory of homes, you know, in the price range, that we're selling. 150 to $170,000 range, you don't have a lot of properties out there, especially new properties. For us we are excited of this project, but many projects like this that we have in Tucson and all over the community.

Jose Cardenas: Thank you for joining us to talk about your surprise guest. I understand you have invited him back for the annual dinner. If he accepts, let us know and we will have you back on to talk about it.

Edmundo Hidalgo:We would love to have him back.

Jose Cardenas: That would be newsworthy as well.

Edmundo Hidalgo: Thank you.

Edmundo Hidalgo:President and CEO, Chicanos Por La Causa;

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