Branching off from his father’s home building company in Hattiesburg, where he built his first homes in the summer of 1970 after just graduating from the University of Southern Mississippi with a real estate degree, Rayburn learned first-hand how his efforts could transform the lives of ordinary working families by giving them new housing opportunities.
It happened in Glendora, which is located in one of the poorest counties in the country and boasts a population of fewer than 250 people “even on a good day.” With two grants of about $400,000 each, one from the city and the second from a non-profit group, Rayburn built 24 three-bedroom, two-bath, one-story rental units in brick veneer fourplexes. The new housing made a big impact in that community, whose residents, Rayburn recalls, were used to living in cardboard shacks with dirt floors and in “old beat-up, run-down” trailers.
“The living conditions were horrible,” he said. “The town had no sewers and the water system had been in foreclosure, so the first thing we had to do was figure out how to get it back up to speed so the health department would approve our building plans.” But in the end the effort was well worth it: “We gave them something they weren’t used to seeing — good, safe, sound, decent-quality, affordable housing.”
A significant venture into the field of affordable housing, Rayburn also learned that he had inherited the responsibility of providing a basic education for the residents of his new housing. Not much could be taken for granted in the rudimentary lessons he had to arrange for them, which encompassed everything from how to clean the floors to setting the thermostat and maintaining the air conditioning system.
The Uphill Struggle for Affordable Housing
Over the years, the product Rayburn builds hasn’t fundamentally changed, but the struggle of cobbling together the sources of financing needed to bring housing costs down to a level that modestly paid wage earners can afford has only become more difficult, made worse by the barrage of government regulations that seem to have mushroomed in recent years.
Building the homes is actually the easiest part of the affordable housing equation, Rayburn insists. “The secret is in the financing, and being able to get zoning, water and sewers,” he says.
“Putting all of the financing pieces together doesn’t happen overnight,” he says. “When you use federal funds, as we do most of the time, you have to clear the 21 different agencies plus the phase-one environmental review, and if we hit any major obstacles, we usually don’t pursue the project on that site, so we change sites and do it all over again.
Hopping from locations that form a wide circumference around his home base in Jackson, Rayburn builds about 10 houses in any one place and at any one time so that he can package the financing, which he describes as “critical” for putting a viable deal together.
He works with the community to line up HOME funds, which help substantially with the affordability factor. The Affordable Housing Program, into which the Federal Home Loan Bank System is required to put 10% of its net earnings, and the Low Income Housing Tax Credit program also help win the affordable housing battle.
“You can put all of these together and make it work,” Rayburn advises. “You need more than one program, especially in areas where you are dealing with such low incomes.”
Campaigning for Housing for Workers
In the upcoming year’s NAHB campaign on behalf of housing for he nation’s workers, Rayburn will have the opportunity to go knocking on doors in Washington to expound upon many of the problems that he has encountered in his own efforts to expand the ranks of the nation’s home owners. That will invariably take him to the offices of leaders in the Congress, the White House and the regulatory agencies, places where he has already become a familiar figure as the association’s representative on the countervailing duties on Canadian lumber and other weighty issues for the industry.
Beyond the Washington Beltway, Rayburn will also be rallying the grassroots membership to the cause of narrowing the divide between America’s housing haves and its have-nots. Local planning commissions, city councils and citizens groups “all play an important role in determining whether we will have the housing that enables workers to continue making a contribution to their communities after the workday ends,” he says. And the local and state home builders associations are strategically well placed to turn the tide against no-growth forces, as has been forcefully demonstrated by the growing success of the association’s comprehensive smart growth initiative.
There are few times in its recent history when the housing industry has been as healthy as it is today, observes Rayburn, and that makes this an appropriate time to grapple with the hard affordability issues that are impeding progress for workers who play a vital role in the community.
As Rayburn sees the problem: “Many teachers, police officers, fire fighters and all the lower and moderate-income workers who provide basic services on which the community relies simply cannot find a decent place to live within a reasonable distance from their jobs. They are living 50 miles or more away from their jobs, and that is not acceptable. In many markets, the gap between those who can afford a home and those who cannot is widening at an alarming rate, and the availability of affordable rental housing is in short supply.”
Eliminating anti-housing land use policies around the country will be a key objective of Rayburn’s attack next year against the forces of “NIMBYism.”
“We need to overcome the not-in-my-backyard philosophy that prevails among residents in too many communities in the country that have lost sight of the essential connection between housing and their economic and social well-being,” he says. “We need the entitlements, the zoning, the higher densities and the mixed-use cluster development that can advance housing opportunity.”
Rayburn says the stakes are high because he has seen time after time how affordably priced housing can lift the economic horizons for working families, and he notes that housing is crucial to the financial well-being of families and that home equity is the most important component of household wealth.
“The appreciation of a home is how most people build wealth in this country,” he says. “Every household deserves the opportunity to pursue the American dream — in the inner cities, where areas are waiting to be revitalized; in older suburban areas where homes are ripe for a face-lift and remodeling; and in the outlying suburbs where land is available and providing for infrastructure is a challenge that needs to be resolved.”
Builders Associations Are Good for Business
Rayburn has been actively involved over the years in leadership roles for the Greater Hattiesburg Home Builders Association, the HBA of Jackson (where he still serves on the board of directors) and the HBA of Mississippi, as well as NAHB. A firm believer that in numbers there is strength, he advocates harnessing the vast resources of the NAHB federation as the best guarantee of a top national priority for housing.
But if they do it for no other reason, Rayburn urges young builders to join their local home builders association for the sake of their business. Rayburn says that he learned about many of the financing programs that have become indispensable to his affordable home building business through NAHB committee meetings and educational programs. Access to the growing bundle of information available on the association’s recently redesigned Web site — www.nahb.org — can be a big help to small businesses, he says. And there is no substitute for the networking opportunities and member-to-member information sharing provided by association meetings and functions, he says.
Rayburn says that there is no better way to solve problems than by talking to other builders, and on one of the pivotal concerns for the industry in recent years — shortages of skilled construction workers — he is using his company as a testing ground for an effective and long-lasting solution.
At the invitation of Channing Pfeiffer, executive officer of the Tidewater Builders Association, Rayburn reviewed how the builders in Virginia were using Workforce Investment Act dollars from the Department of Labor to provide on-site job training for teenagers and young adults who had dropped out of high school.
Impressed by what he saw, working with the Home Builders Institute and other non-profit groups, he has now embarked on a demonstration project in Mississippi that will provide young people with GEDs if they don’t already have one, a construction safety and training program and on-site apprenticeships in carpentry, electrical, HVAC and plumbing skills.
Just as he views the families who move into his homes with the expectation that they will eventually be able to climb the housing ladder to reach financial self-sufficiency and affluence, Rayburn has high hopes for his apprentices, envisioning budding careers in the home building industry and a time when they will become contractors in their own right and hire crews of their own.
Photos by Herman Farrer
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