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The Color of Money

Day four, article five

`Anybody can sit out there and mouth off -
he gets things done'

By Bill Dedman, The Atlanta Journal-Constitution

Published May 4, 1988, Page A8

Copyright 1988, The Atlanta Journal-Constitution

As a nuclear missile launch officer in the 1970s, Lt. Craig Taylor had the power to destroy cities. He was uneasy.

"We almost launched some nukes, and I got religious."

As a Methodist minister and housing developer in the 1980s, the Rev. Craig Taylor is gaining the power to build a city. He is uneasy.

As a leader of a neighborhood coalition, the Atlanta Community Reinvestment Alliance, Taylor is the city's most outspoken critic of banks for not lending in minority and working-class areas.

As a leader of the South Atlanta Land Trust, a non-profit housing developer, Taylor is the first person banks lend to in those areas.

"The banks probably think I'm ungrateful, and the other folks (activists) probably think I'm selling out. I'm castrated as a negotiator for the neighborhood."

In fact, bank officials and housing activists -- who don't seem to agree on many things -- agree that Taylor is the best example of the potential of Atlanta's inner-city Southside.

"I wish we had a hundred more like him," said Jim Mynatt, first vice president of Trust Company Bank, which Taylor's coalition unsuccessfully accused last fall of redlining. "Anybody can sit out there and mouth off -- he gets things done."

The back door of Taylor's office on Jonesboro Road has three peepholes and a slot -- so former tenants could watch for cops and receive drug deliveries, he said.

A 36-year-old Louisianian with a hint of Cajun accent, Taylor came to the South Atlanta neighborhood four years ago through Wesley Community Centers.

He found a sliver of the Southside, with 42 of its 500 houses vacant and dilapidated. (The South Atlanta neighborhood is bounded by Carver Homes on the west, Jonesboro Road on the east, McDonough Boulevard on the north and Turman Avenue on the south.)

Junk piles flourished. Speculators had bought up much of the neighborhood, waiting for Southside development that was always "just five years away."

"If you can do housing in this neighborhood, you can do housing anywhere," Taylor said.

He did not expect government to solve the neighborhood's problems.

"I see my approach as somewhat akin to Mr. Reagan's. I think government's role ought to be enabling local communities to meet their local needs, as opposed to having governments do it themselves."

When he arrived in 1984, residents already had formed the South Atlanta Land Trust (SALT), which he joined as full-time consultant.

SALT started small -- clearing a junk-piled vacant lot -- then began buying land to protect neighborhood boundaries from speculators.

In 1985, SALT started renovating houses. It moved in 13 others from the airport noise zone.

Residents also began to push the city to enforce laws against trash piles and unsafe buildings, and to police an area that residents called "Cocaine Alley."

And they looked to the banks.

"We tried to get long-term financing for our people from several banks and didn't get the time of day," Taylor said.

"So we became bankers -- not out of choice but out of necessity."

Taylor persuaded banks to begin lending money to SALT, which then loaned to homebuyers. Residents buy only the house; SALT keeps the land to prevent residents from selling to speculators.

The preacher-developer-banker once received a pinstriped suit as a gift, but he still usually wears jeans. And he chooses borrowers somewhat differently than banks do.

"I ask them a question and look directly in their eyes and see if they're telling the truth. If they're honest, I'll sell them a house."

Not one of his more than 30 borrowers has defaulted, Taylor said.

Taylor calls bank lending rules "arbitrary and impersonal. For example, under standard banking rules, a borrower can have no more than 28 percent of gross income committed to long-term debt.

"If they're able to pay 60 percent for garbage rental housing, they can pay 40 percent for homeownership," Taylor said. "It's that kind of cultural understanding that the bankers downtown lack."

Banks also will usually lend no more than 80 percent of the value of a home without requiring private mortgage insurance, which homebuyers and lenders report is difficult to obtain in some inner-city neighborhoods.

Taylor suggests that lenders look at it from a different perspective:

If a two-income suburban husband and wife have an income of $100,000 and make a 10 percent down payment on a $100,000 house, or $10,000, they have invested one-tenth of a year's pay.

If a $20,000-a-year city sanitation worker and his wife, a homemaker, put down 10 percent on a $40,000 house, or $4,000, they have invested one-fifth of a year's pay.

"Which family has a greater stake in its house? Which family is less likely to walk away from that loan?" he asks. "We make 99 percent loans and families don't walk."

Karen Pleas heads one of those families. The 32-year-old is raising four children -- two of hers and two of her late sister's -- in a SALT house. Ms. Pleas works at a bank, Citizens and Southern (C&S), but knew she didn't qualify for a loan because of an unpaid student loan.

"We bought one of the riffraff houses," she said. "People were scared and just shut off their lives. Now my neighbors are painting their houses. There's a gorgeous blue around the corner."

SALT is ready to begin work on its 37th home, and soon will finish its eighth apartment. Taylor's goal is to renovate 125 houses, one-fourth of the neighborhood.

"By the time we reach that level, it should have turned a corner. That's a theory," Taylor said.

When that happens, Taylor hopes the banks will be ready to meet the credit needs of individual residents. And, as SALT sponsors other land trusts on the Southside, he hopes those trusts won't have to wait the years he waited to build credibility with banks.

Looking north from his office one day this past winter, beyond the liquor store and Cocaine Alley, Taylor could see the downtown skyline.

"In the Middle Ages, the skyline was dominated by the Gothic cathedrals, and the church was the most powerful institution. Look at a modern-day skyline: It's dominated by banking institutions.

"Even though it was corrupt, one did not criticize the church without suffering all sorts of repercussions. Today, banks are beyond criticism. We have replaced religious icons with capitalistic icons.''

This winter Taylor's coalition did a lot of criticizing. It lost its case against Trust Company, but banks stepped up lending to SALT.

"Four banks have been giving me the red carpet the past two months: Trust Company, First Atlanta, Georgia Federal and C&S."

He also received a call from a representative of Atlanta Civic Enterprises. This quiet coalition of downtown businesses (including the large banks, The Atlanta Journal-Constitution and others) was created in the 1960s to distribute money to cool racial hot spots.

Last week it agreed to lend SALT $225,000 at 6 percent interest.


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