SYRACUSE, N.Y. — Why would a 52-year-old businessman quit a well-paid management job to help fix up blighted urban houses, with no guarantee of getting paid?
As it turned out, fixing up slums was the job Ken Craig had been looking for all his life.
Craig quit his job with The Pyramid Cos., the biggest shopping mall developer in Central New York, in late 1989. A few months later, with his pastor and another church member, Craig founded the nonprofit Housing Visions Unlimited.
In 25 years, he has turned a shoestring housing renovation project run by church volunteers into a 100-person organization with roughly 1,300 apartments, 2,700 low-income tenants and $28 million in annual revenues.
Housing Visions Unlimited now has operations in 12 cities throughout New York, plus a new project underway in Pennsylvania. The organization also developed an innovative job counseling service that is attracting notice from city officials and others.
Craig, who turned 79 this month, remains the boyishly energetic president and CEO. And yes, he is well paid for his efforts now.
His salary is $160,000. He has a nice house on Cazenovia Lake. He owns one-third of a Piper Arrow airplane that he flies to visit relatives and some of Housing Visions’ far-flung projects.
It wasn’t always so.
Housing Visions started out as a project to renovate three blighted apartment houses in the 1500 block of East Genesee Street, with a plan to take on more renovations if the first group was successful. To spearhead the effort, Craig quit his shopping mall finance job with The Pyramid Cos., for which he had moved to Syracuse in 1986.
Ken, quicker than anybody, honed the process and got really good at it
By the time he arrived here, Craig had tried a lot of careers. An engineer by training, he designed railroad bridges. He patented a new kind of oil storage tank. He worked in the aerospace industry, for hospitals, and in real estate. He started three businesses, all of which failed.
Most of his jobs lasted no more than two or three years, he said. The longest, a job at Xerox Corp. in Rochester, lasted seven years.
Not long after he moved to Syracuse and joined University United Methodist Church, Craig talked with the pastor, the Rev. Hal Garman, about the dilapidated housing and deepening poverty that festered just outside the church doors on East Genesee Street. Craig agreed to join a task force with Garman and church member Win Gaskin, a retired pharmacist, to look for ways the church could help.
Craig said he quickly warmed to the task. “It seemed like the thing that I was supposed to do,” he said.
He concluded that the only way to ensure meaningful change was to take control of the property in the neighborhood. But Craig didn’t have money to buy up slum houses and renovate them. The church didn’t have the money. They would have to find investors.
Fortunately, Craig had discovered a new and not yet widely understood detail in the 1986 overhaul of the federal tax code: the low-income housing tax credit. The new tax law offered investors a dollar-for-dollar credit against their income taxes for money they put into low-income housing developments.
Housing Visions grew into the juggernaut it is today because Craig was one of the first in Central New York to recruit investors with low-income housing tax credits, which have become the federal government’s main funding vehicle for affordable housing, said Paul Driscoll, Syracuse commissioner of neighborhood and business development.
“Ken, quicker than anybody, honed the process and got really good at it,” Driscoll said. “Ken spearheaded that whole movement, in terms of (using) the tax credits.”
Life without a paycheck
Starting out, Craig anticipated he could survive a year without pay while he got Housing Visions going. He was single, a divorced father of two grown sons who had already finished college. He sold his house, banked the proceeds, and moved into an apartment.
It took 18 months for Craig to draw his first paycheck, and he went a total of 30 months without pay during the early years. He worked out of an office at the church, borrowing the church computer when the bookkeeper wasn’t using it. He juggled his credit cards in irresponsible ways.
“It got to the point, I was so deeply into debt I was using one credit card to pay the bill on the other credit card,” he said. “I would not advise anybody to ever do that.”
Craig’s plan for using tax credits worked. For each of the first three houses to be renovated, Craig solicited three investors to put in $5,500 each. That provided enough equity to get mortgages to pay for renovations. The investors took advantage of the tax credits and depreciation in return for paying back the mortgages.
For 15 years, until the tax credits run out, the investors and Housing Visions jointly own the property. After that, Housing Visions assumes ownership.
Most of the first nine investors were church members, including Garman, the pastor. Mel Eggers, chancellor of nearby Syracuse University, kicked in a personal investment.
Dr. Gregory Threatte, a church member, was the first to invest in a Housing Visions house, at 1510 E. Genesee St. Threatte, who retired in 2012 as chairman of the pathology department of Upstate Medical University, served on the Housing Visions board for about a decade.
Threatte said Housing Visions bought back his investment, because the alternative minimum tax made it impossible for him to take the tax credits.
“I was happy with what Housing Visions did,” he said. “But then they changed the tax law the same year, and all my tax credits got wiped out.”
No matter. It wasn’t long before banks discovered the advantages of buying low-income housing tax credits, Craig said. In a second round of house renovations, OnBank Corp. (now M&T Bank) invested about $300,000. Then Housing Visions developed a relationship with KeyBank, which has provided the vast majority of equity and loans for the group’s housing projects since then, Craig said.
For banks, a way to prove good corporate citizenship
Housing Visions has raised more than $300 million to date for low-income housing.
For banks, buying tax credits for affordable housing has a twofold payoff. In addition to reducing their tax bills, banks can use the investments to meet the demands of the Community Reinvestment Act, which encourages banks to provide credit services in low-income areas. When banks want permission to merge or to open new branches, it helps if they have complied with CRA goals.
In four years, Housing Visions renovated seven houses with 23 apartments on East Genesee Street, all within a two-block area. The organization now owns at least two dozen apartment houses along East Genesee and nearby side streets, plus the 50-unit Maple Heights townhouse development and the 50-unit VanKeuren Square complex for veterans.
That neighborhood has been transformed, Garman said, and not just because the buildings were renovated. Craig also had the foresight to establish Housing Visions as the permanent owner and manager of the properties, to ensure that they remained affordable and high-quality.
The organization is a nonprofit, and its bylaws say that a majority of the 30 board members must represent the East Side, and some must be Housing Visions tenants.
Many low-income housing developers sell their properties after building them, said Driscoll, the city commissioner. But Craig organized Housing Visions to own its property long term, to avoid the deterioration that sometimes comes from absentee landlord control, Garman said.
“He knew that was a problem with urban real estate and with landlords,” Garman said. “He was trying to create a way for that not to happen, and I think he pulled it off.”
Five years ago, Craig took Housing Visions in a new direction: job counseling. At church, the Rev. Craig French, who replaced Garman when he retired, had been talking up Scott Miller’s book, “Until It’s Gone: Ending Poverty in Our Nation, In Our Lifetime.”
“I ended up having to can the whole staff”
With French’s support, Craig launched a subsidiary called Visions for Change, with a separate board of directors. He hired new staff to work with chronically unemployed people.
There were some hiccups.
“After a year and a half … we weren’t getting anyone out of poverty,” Craig said. “They were providing good social support, if you will, but didn’t make much progress. So I ended up having to can the whole staff and start over.”
This time, Craig hired Rhonda O’Connor, a social worker who had previously worked at PEACE Inc., and commissioned her to develop an original job-training curriculum, called “Choosing to Thrive.” One of the keys to the program is an emphasis on long-term support after a person lands a job.
It takes two to three months on average to find a job for a chronically unemployed person, O’Connor said, but it often takes much longer to help the person establish financial stability. New employees often struggle with child care and transportation, the loss of public benefits like Medicaid, or making long-term financial plans, among other issues.
Under Visions for Change’s new system, 80 percent of the 148 people placed in jobs have stayed employed for at least a year. “That’s unheard of,” O’Connor said.
Syracuse University is studying the effectiveness of the Visions for Change system. If the evaluation is positive, Craig hopes to win state or local government contracts to provide the service, he said.
Driscoll said city officials are looking at the possibility of using federal housing money to fund Vision for Change next year. Right now, Housing Visions is paying most of the cost.
Meanwhile, the competition for low-income housing tax credits, which are given out each year by the state, has grown fierce, Craig said. Each project application is about 1,000 pages long, and two out of three projects get rejected.
That’s part of the reason Housing Visions has expanded to other communities. The organization is building projects with Habitat for Humanity in Albany, the YWCA in Buffalo, and a housing group in Pottstown, Pa., among others.
Thomas Dellwo, an East Side resident, has been on the Housing Visions board for four years. He said the organization has transformed the neighborhood.
“We’re providing high-quality, excellent housing to people who can’t afford to pay for that,” said Dellwo, a housing and financial counselor at Syracuse Cooperative Federal Credit Union.
Dellwo said Craig continues to guide the organization with a cut-and-dried business clarity. But Craig has also built a strong foundation for the day he retires, Dellwo said.
“One of his strengths is finding talent, and hiring talent, and then letting them do what they’re good at,” Dellwo said. “His heart’s in the mission, but he’s got a good head on his shoulders as well.”