Rising to Meet the Housing Crisis in Appalachia: an interview with Scott McReynolds, Housing Development Alliance
Part III of a Continuing Series
Scott McReynolds is the Executive Director of Housing Development Alliance (HDA), a Fahe Member based in Hazard, KY. He joined HDA in 1994.
Q: Housing Development Alliance has been serving people for more than 30 years. Where do you work and how has the housing crisis hit your communities?
A: We are based in Hazard, Kentucky, and we serve Perry, Breathitt, Knott, and Leslie counties. We have a lot of really challenging housing situations. My first 10 years here I lived in substandard housing, not because I couldn’t afford anything better, but because that’s what I could find. There’s bad water, suspect heat systems, rotting floors. That’s just what’s available. I remember one of our new homeowners. We moved them in, and they were just really happy because they felt like it was a race to see whether we were going to finish their house before the bathroom floor completely collapsed.
Q: How did the housing situation worsen as of July 28th, 2022, when flooding besieged parts of your service region?
In the hardest hit counties, about one in six houses had at least an inch of water in it. The flood destroyed somewhere around 500 houses and thousands more suffered major damage. We’re talking about needing to work on or replace 15-20% of the housing stock due to the flood. We didn’t have a lot of vacant housing, so when you suddenly have several thousand households get displaced overnight, we couldn’t absorb them.
Q: How did the floods exacerbate problems that already existed in the region?
A: We already had a crisis. When we left the office on July 27th, we had about 500 households that we were working with in one capacity or another, who either wanted a home repaired or wanted to buy a home. It’s a huge need now between long term, persistent poverty and getting hammered by the floods. People want to stay in the region, but there’s just not any housing available. A lot of communities are buying out people whose homes are at high risk of flooding again. Jackson has already bought out 10 or 12 families, and maybe one or two were able to stay in the community.
Another way we see the overlapping crisis is a lot of the housing that was destroyed is sometimes called found affordable housing, as opposed to created affordable housing. An example of that might be my uncle gets a new trailer, and he says he’ll give me the old trailer if I’ll haul it off. So I scratch together a little bit of money, and my buddy’s got a tractor to pull it down the holler and stick it on my grandmother’s property, and that’s where I live. It’s a 35-year-old trailer. I may hook it up to electric. Maybe I plumb in a septic. Maybe it has water. It may be really bad housing, but it’s a home, and that’s all I can afford. When that trailer get gets washed away, it’s incredibly hard to help that individual because they can only afford $200 to $300 a month for housing and utilities.
Q: How is HDA rising to meet the challenge?
We have people that almost anywhere else in the US would be eligible for federal housing programs, but they’re not here because of our extremely low Area Median Incomes. We started back in 2019 a program for people in substance abuse recovery, giving them job training so they could reenter the workforce. We do that in such a way that allows us to build housing for the people who make just a little bit too much income. We are using job training dollars to train people in recovery on how to be a carpenter while they’re building moderate income housing. That allows us to build the house for the appraised value.
We are trying to creatively take advantage of the flexibility that we’ve not had in the past. We finally have unrestricted money after the flood, so we’re able to do rent to own in a way that works. We know that there are some people who were homeowners whose house got destroyed, but who would not qualify for a mortgage today. If it’s realistic that in the next year or two they’ll be able to become a homeowner again, we are able to go ahead and build their house with flexible flood resources and rent it to them.
Q: What have you learned about funding and production challenges through your work on flood-impacted housing?
I learned how hard it is to develop housing at scale. It’s like somebody flipped a switch on July 28th. We had the governor of the state, all the cabinet agencies saying and all the local governments saying, “We want to build houses really fast in Eastern Kentucky.” The state put up $200 million and then HUD came in with all this money. Despite all the resources, all the political clout, it is almost two years later and not a single house has been built using those resources. This just shows how hard and how complicated land development and infrastructure is. In some ways, building the house is the easy part. It’s the land and the infrastructure to support them, that’s really daunting. Not to mention guiding people through the process of becoming mortgage ready, and dealing with the fact that so many people have iffy credit.
We had been building 17 to 20 houses a year for 10 years, and that just seemed like all we could ever do. Our organizational capacity was geared to the available money. After the flood, we realized we had to be able to do both flood relief and everything else we were already doing. We set out to double our capacity and are getting very close to having achieved that. We are now at 27 or 28 homes for the fiscal year, and we have 5 or 6 more that we’re doing rent to own. The amount of money my organization has spent hiring new people and expanding, buying trucks and tools, all of that only makes sense because we know this is a five to seven year recovery process. If we want to go out and build housing at a huge scale, we’re going to need a ton of money and it needs to be consistent.