If you've ever walked down a street in many of Pittsburgh's older neighborhoods, you've seen those aging houses, the ones that are much taller than they are wide, with windows stacked on top of one another, and at the very top a roof that has seen better days.
When I first started working with The Pittsburgh Project
in 2007 to repair homes for low income residents in the city of Pittsburgh, one of my first assignments was on a house like this. It looked almost as if it had been an afterthought on the street, as if someone had taken a house, squeezed and stretched and then wiggled it in between the two houses on either side. The house was owned by a husband and wife who had lived in Pittsburgh all of their lives. It was summertime when a group of high school students I was supervising spent a week repairing the house's various problems. We painted the wooden siding, patched concrete on the front sidewalk, and fixed a leaky access door in the roof.
One sweltering afternoon, the homeowners invited our sweaty group inside their clean, air-conditioned living room. They treated us to lemonade, homemade pumpkin roll and some great stories. The couple who owned the house spent the better part of the afternoon telling us about growing up in Pittsburgh and the changes they observed in the city – the steel industry leaving, or their old neighbors moving out and young people moving in. We also learned how they had ended up with the giant hole in their roof.
The previous spring, they had hired a contractor to fix their leaky roof, but he left town without completing the job. He had started the project by cutting a giant hatch in the roof, and then tarring over the shingles. While this stopped most of the old leaks, he had failed to seal the new hole correctly, which left the owners with a bigger problem than before he had started.
When the homeowners called the contractor to fix the roof again, there was no answer. For six months they suffered with a metal basin catching the leaking water. All the winter’s melting snow caused even more damage to the roof.
Bringing microcredit home
Unfortunately, this sort of story has become a familiar one to me in the years since working on this house. In my college summers with the Pittsburgh Project, and later working for Habitat for Humanity, time and again I've met homeowners who hired dishonest contractors, and spent their money on projects that left them with more problems than they started with. Attempting to be responsible homeowners, and taking a financial hit to do so, they were left with less money and more problems than at the start. While free home-repair programs like The Pittsburgh Project, Rebuilding Together Pittsburgh
and Hosanna Industries all are great resources for low-income homeowners, there are many more people struggling to pay for home repairs than can be served by these non-profits. And the need for affordable home repairs is still growing. With the current economic situation and aging housing stock in Pittsburgh, we need innovative ideas.
What if community and non-profit organizations were able to provide very small loans to low-income homeowners? What if we used some of the concepts already widely used in micro-credit projects around the world? The Grameen Bank in Bangladesh started by Muhammad Yunus funds many micro-enterprises, such as operating a cell phone stand in a rural community. With great success, Okio Credit, based in the Netherlands, uses micro-credit worldwide, from supporting the Divine Chocolate Cooperative in Ghana to helping local micro-lending groups in Bulgaria aid local businesses. Kiva, a non-profit that combines crowd sourcing with micro-lending, allows individuals to lend as little as $25 to small businesses and housing construction projects in Eastern Europe, Africa, and Central America. Kiva recently started a new facet of its program called Kiva Zip, which has opened up crowd-source lending to the U.S. small business market. Kiva Zip has started funding small businesses in the Pittsburgh area as well. Just recently, they funded a $5,000 loan to The Wheelmill, an indoor bicycle park hoping to increase their staff and inventory.
Micro-financing in Pittsburgh could allow homeowners to hire reputable contractors with repayment terms that fit their budget. Loans from around $1,000 to $15,000 could help could cover the cost of fixing a roof, repairing leaky plumbing, or replacing a deteriorating porch. With these loans, in addition to free services, limited funding would reach much further. And repaid loans would provide homeowners a way to build credit, creating more favorable loan opportunities for the future.
The Bike and Build project
Since 2010 I have been involved with an organization called Bike and Build
, which helps young adults raise money for affordable housing groups through cross-country cycling trips. Last spring, through their Chris Webber Memorial Fellowship program, I received a grant to spend 10 months looking at the need for micro-credit housing loans in Pittsburgh, and to see how micro-credit housing programs function in Nicaragua. I spent four months here volunteering with housing non-profits like Rebuilding Together, Operation Better Block and The Pittsburgh project, which helped me to learn about the substantial need for better housing in the city.
In mid-January, I arrived in Nicaragua, and for the next four months I will work with a micro-finance institution here, meeting and interviewing potential borrowers, and learning the details of servicing these loans. Already, I've learned the micro-credit is even more prevalent that I originally thought, and that many people choose micro-loans because they are more secure and fair than other smaller sources of financial help.
In July, I'll return to Pittsburgh, with the hope of combining the practical information I have learned in Nicaragua with this new market for micro-lending. My goal is to have enough information and knowledge to work with a non-profit in Pittsburgh to create a couple of trial housing loans. With lenders concentrating on providing borrowers fair and realistic loans and the correct tools to repay the loans on time, success is possible in adapting this concept to the substandard housing issue. Micro-finance is a new and positive resource for Pittsburgh, and I hope that I'll be able to show that this tool can be successfully used to benefit our community.
Photographs courtesy of the author.