TGNCDC Pioneers Strategic Banking Partnerships To Support Community Development Work, To Enhance Real Estate Markets, And To Provide More Quality, Affordable Housing

There are over 24,000 people on the wait list for housing choice vouchers (section 8) in Saint Louis. Tower Grove Neighborhoods Community Development Corporation understands the need for more quality affordable housing in areas that provide easy access to jobs, options for shopping , proximity to nodes of strength (businesses and innovation districts), and neighborhood amenities.   TGNCDC also understands that renovated housing stock, infrastructure upgrades, properly managed rental units, and additional home owners enhance real estate markets that drive additional investments and more opportunity. In 2015, TGNCDC started work on a rental portfolio in South Tower Grove South (South of Gravois Ave. and North of Chippewa St.) where the median income is around $24,000  a year and crime, drug dealing, vacancy, and blight were fostering decline in the area.  This segment of the Tower Grove South neighborhood was designated in our framework and vision plan as a target for investment.  Only a few blocks away, the median income in another part of Tower Grove South is upwards of $55,000 a year.

As an example of our work, the 4 family at 3600 Bamberger (Bamberger/Gravois) had 117 calls for service in one year.  It was the first building TGNCDC purchased, renovated and leased for $450.00 per month per unit.   We also added a police substation in one unit (forgoing some income to our not-for-profit).  You can learn more about the story here   TGNCDC has bought and renovated 26 units in the area to date, offers rent that equates to 30%-40% to median, provides a high level of property management including tenant screening through ScreenDoor ( our in-house tenant screening business) and properly maintains the buildings.  We also worked with Alderwoman Green to install trash cans, replace dated cobra-heads with new LED lights and secured a grant from PNC Bank through a partnership with covenant house ( to provide clean up services twice a month.  Covenant House works with at-risk youths to provide jobs, interviewing skills and other resume building activities.

The rental portfolio and community development work was completely funded with our organization's cash on hand, without any subsidy and with financing terms that any investor off the street would be offered by a bank.  The average subsidy for one single family home from CDBG or HOME funds could be in excess of $150,000.  For about the same about of money, TGNCDC created 26 quality and affordable units of rental.  Using our cash to complete the "typically" financed deals limited our ability to scale up the operation.   Our success created a need for a different approach.

TGNCDC, through a series of events/meetings met with banks and their community reinvestment representatives.  We told our story and our need for more capital, better financing terms and committed banking partners.  Our organization works in middle market neighborhoods that, initially, we thought would be a slam dunk for financing.  After months and months of meetings, the feedback we received told a different story.  Many banks want to check the boxes, limit their exposure, don't or couldn't provide grants to help us buy more properties, and were unwilling to help with more flexible terms.  We pleaded to see the forest through the trees, not only would they help our experienced CDC continue our community development work, they would  support the revitalization and stabilization of neighborhoods that create more opportunities for lending.  TGNCDC speaks from experience because major parts of our service area  have rebounded and are now some of the most desirable places to live (read the white paper of how Shaw Improved at  Persistence pays and, over some time, our first deal was completed with TIAA Direct who provided a $200,000 grant, 30 year amortization, lower than market rate interest rate to purchase 34 units in 10 buildings in the Shaw neighborhood.  TGNCDC committed to keeping rents for new leases at 80% to median going forward.  You can read more about the details at

Based on the TIAA-Direct deal as an example, First Bank stepped up to refinance our South Tower Grove South portfolio with a $30,000 grant (over 3 years) for supporting our real estate development work in Tower Grove South, 25 year amortization, and a interest rate below market rate.  They were also able to provide us with $100,000 equity line for future purchases.

The Community Builders Network took the time to assemble all the relevant information and created a case study for other CDCs to use when working with banks. You can read more about it at These types of deals have immense potential when you combine a real estate market with comps/potential/opportunity, experienced staff and an organization with a solid balance sheet.  If more banks take a different and proactive approach to community lending to not for profits, more declining neighborhoods would be in a position to flourish.  Declining neighborhoods will either die or rebound.  They have a greater chance of rebounding based on comprehensive planning, neighborhood association/stakeholder involvement, political leadership, and a community development corporation planting the flag every day to make it a better place to live, work and play.  Capital from banks is critical to success.   Thanks to TIAA-Direct and First Bank for setting the stage for more lending opportunities to Community Development Corporations in the future and more neighborhoods improving.