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Do Housing Rehabs Pay Their Way? 439 households retained in an area can be useful measures of neighborhood revitalization. Minority participation, especially the development of minority contractors and the building of a local trade base, can be important qualitative products of CDC housing rehab programs. Effects of the homeownership -related impacts of rehabs on social conditions such as homeownership rates, voter participation, etc. as discussed by Rohe, McCarthy and Van Zandt (2000) are also important, but left for another research project at a later date. To summarize, the literature on the subject of rehabs' effect on the local economy is fairly limited. Guidance is available regarding many (but not all) fiscal benefits and costs, which have previously been applied to new construction and can readily be adapted for housing rehabs. These on -budget items are driven by economic factors, such as property value increases and new employment. Other on -budget subsidies are property tax abatement and low-interest first and second mortgages. Fiscal benefits should include new resident income tax, unabated property tax for the new units, increased property taxes from nearby homes positively affected by new housing investment from rehabs, and construction employee income tax, a one-time item (Simons and Sharkey 1997). Retail sales tax from residents should also be evaluated. The benefit:cost ratio should be calculated and compared with new construction. A defensible quantification of the net benefits of housing rehabs on the local economy would allow a better understanding of housing subsidy decisions at the local government level. Research Design The sample frame for this study came from the 150 NWOs in the Neighborhood Reinvestment Corporation network that focus on single-family rehabs. From this group, twenty-one organizations were asked to participate. Fiscal data was collected concurrently (from city governments) for all of these cities. Complete and useable information was obtained from ten organizations before the data collection cut-off date. While it is an interesting cross-section of large and small neighborhood groups from throughout the United States, the sample is non- random. Hence, the results of this study cannot readily be generalized to CDCs in general. Exhibit 2 shows the name of each CDC that participated in the study, along with the number of substantial housing rehabilitations and other output during 1996-1997, average staff size and city population. The NeighborWorks° network, a group of 223 CDCs chartered by Neighborhood Reinvestment, serves a diverse urban and rural population. CDC members have access to substantial training, comprehensive technical assistance, capital funding and a specialized secondary market from the parent organization. For example, in the organization's Revolving Loan Fund (2001 portfolio value $23lmillion), 38% of the borrowers were African American, and 23% were Hispanic. Seventy percent of the loans were made to low- or very low-income households, and 43% of the borrowers were female -headed households. A main feature of the NeighborWorks J R E R I Vol. 25 1 No. 4 — 2003 19