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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  September 12, 2007  |   Turning Inner City Blight Into New Opportunity
Two decades ago, some 2,000 homes in the inner city of Portland were abandoned and being used as drug labs, says Ted Gilbert, president and principal broker of Gilbert Bros. real estate company in Portland, Ore.

It was a heartbreaking state of affairs for Gilbert, who loves the city of Portland and knew that if the trend continued, more residents would flee for the suburbs, making room for drug lords to move in.

“I naturally thought about using homeownership as a tool to turn around the struggling neighborhoods,” Gilbert says.

He put his idea into action by forming HOST Development. (HOST is an acronym for Homeownership One Street at a Time.) The organization serves as a non-profit developer providing affordable homes in Portland's inner city, and is now one of the 10 largest homebuilders in the region.

Determined to clean up the inner city and create affordable housing, Gilbert, who’s been in real estate since 1972, built a solid team of supporters. He recruited three colleagues and enlisted local banks to provide acquisition and building financing in neighborhoods without comparables. Using his business savvy, he provided a convincing argument to top decision-makers.

“At the highest level of the banks, they believed in us,” says Gilbert.

In 1989, HOST started buying homes on a street that was “near a stable neighborhood, so we could build up density, and so lenders would feel more comfortable with the idea.” HOST would rehab the houses and sell them for as little as $49,000 to first-time and lower-income home buyers.

Even though Gilbert is a commercial practitioner who specializes in land sales, he doesn’t make a dime of commission from the sale of these homes.

He soon realized that rehabbing one home at a time wasn’t making sense, financially. Nor was it making the dramatic impact that Gilbert was hoping for. “With that came developing entire subdivisions and we became ‘Homeownership One Subdivision at a Time.’”

No one knows the benefits of HOST more than Darryl Kelley, who grew up in the now-redeveloped neighborhood of New Columbia. “I had fond memories of childhood,” he says, even though he lived in one of Portland’s most crime-riddled areas. Since then, the Housing Authority of Portland redeveloped the community, and HOST added 81 homes. Kelley bought one of those homes. “HOST gave my family the opportunity to become home owners,” says Kelley. “When I ride up the hill and see where my old house used to be, I realize how far we’ve come.”

More than 300 families are now HOST home owners. And, through their Building Blocks campaign, they plan to create 1,000 new homeowners by 2017. “Building Blocks is aimed at keeping families in the city and public school enrollment up,” says Gilbert.

As part of that campaign, HOST plans to raise $10 million to pay for land and development costs. “We’ve gotten several grants from banks and received a $500,000 low-interest loan from Meyer Memorial Trust, but we’re still $7 million shy of our goal.”

However, HOST is about more than just building homes. It holds home maintenance and home financing seminars and offers grants for closing costs. Due to the wealth of volunteers, a HOST home can sell for at least 20 percent less that that of a for-profit builder.

“We sell a product way cheaper than the region’s median price of $290,000,” says Gilbert.

Since selling that very first house, HOST saw that its homes had rapid appreciation in the entire community. “We’ve created some $29 million in equity for home owners who might not have had the chance to even own a home had it not been for HOST,” says Gilbert.

Gilbert is one of 10 finalists for the Good Neighbor Awards, a grant program recognizing REALTORSŪ who make exceptional volunteer contributions to their communities. Of the 10 Good Neighbor finalists, five winners will receive $10,000 grants for their community projects and will be honored at the REALTORSŪ Conference & Expo in Las Vegas on November 14. The remaining five finalists will receive $2,500 grants for their cause.

The Good Neighbor Awards is supported by founding sponsor eNeighborhoods Inc., and cosponsors Lowe’s and LandAmerica.

You can contact Ted Gilbert at Gilbert Bros., Portland, OR.; 503/221-9424;, or by contacting HOST Development Inc., 3835 NE Hancock, Suite 101, Portland, OR 97212; 503/331-1752 x104.

— By Tracey C. Velt for REALTORŪ Magazine Online

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