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Edward N.Tilsen: Open Housing Pioneer (NREBJ)

Minority Housing Can Be Profitable

National Real Estate and Building Journal

1955, pp. 18-19

With the same kind of know-how and promotion, and adequate help with financing, minority housing developments can be as successful as any other developments. These Minneapolis and Fort Worth home builders have shown that these projects, sensibly handled, can be beneficial to all concerned – including the builder.

Minority housing can be both profitable and rewarding. For the home builder it provides a relatively untapped market and one that is eager for decent housing.

Minority housing need not be a crusade. You can handle it in the same way as you'd handle any other housing development. There are, of course, more obstacles to be overcome, but intelligent planning and an awakening on the part of mortgage lenders can go a long way in overcoming them.

That the minority groups provide a profitable market for new housing has been demonstrated by Edward N. Tilsen, president of Tilsenbilt Homes, Inc. of Minneapolis. In 1954 Tilsen picked up 63 lots scattered in a ten block area where the colored population amounted to only 15% of the population. When the project was completed all but 4% of the population was made up of the minority groups. Tilsen reported that there was no friction between the groups.

Several families living in the area were worried about the value of their property. Tilsen handled this by visiting the families and explaining that, from his experience, the value will not decrease if the owner doesn't scare and put his property up for sale immediately. He explains that minority group families will bid against each other if the houses are reasonable and the neighborhood is decent.

In promoting the minority housing development, Tilsen held open house in a pilot model. Invitations were sent to people in the neighborhood, both white and colored, to nearby ministers and officers of both Minneapolis and St. Paul home builders associations. Invitations were also extended to Urban League officers and to city officials. It was a typical open house promotion. There were no formal speeches. Coffee, cookies and candy were served, pictures were taken and no fuss was made about the fact that this was a minority housing project. Sales have proved that the project was a profitable success.

Close cooperation between Minneapolis Urban League and the FHA [Federal Housing Authority] were key points in securing the necessary financing. When Tilsen had completed plans for the project, he discussed financing with the Twin Cities Federal Savings and Loan Association and obtained their approval, pending FHA and VA [Veterans' Administration] appraisal reports.

In Fort Worth, Texas, the Purvis & York Development Co. ran into a snag on financing for their minority housing project. Many mortgage lenders whom they contacted were interested in the development but stated that for one reason or another they were unable to sell minority housing mortgages. One company complained about collection problems, another was afraid that non-whites making payments in his office would alienate some of the "white" customers. Here and there a ray of hope was extended, only to be shut off a few weeks later.

After making the rounds and getting the answer "no," they started on the rounds again.

Finally, through Section 213 and with the assistance of the Forth Worth Urban League, Purvis & York was able to assist in sponsoring the first cooperative housing project in Texas.

The first development consisted of 38 homes, and they had more than enough applicants to take care fo the commitments. When FNMA's one-for-one take-out program was in effect they were able to obtain out-of-town mortgage money to finance 22 additional homes. A local building and loan institution came through and agreed to handle loans on 30 additional homes.

Disaster struck again when an investor secured by FNMA rejected six our of the first nine applicants that had been approved by FHA. Purvis & York then had its mortgagees purchase FNMA advance commitments under the one-for-one plan, with the builder reimbursing the mortgagee for his loss. Since the commitments were issued in the name of the mortgagee they could be used for minority group housing if the loans were closed in the name of the mortgagee who purchased them. This plan enabled the project to be completed.

Jack H. York, in a speech at the National Urban League in Conference in Pittsburgh said, "I feel that with everyone working together as a team, the builders, mortgage companies, the Urban League and the FHA, we will make the grade and the time will come when everyone will realize that the minority group market is no different from any other market."

Original Photo of New Tilsenbilt Home from NREHB Article May 1955 p. 18
Photo caption: "One of the first of 30 houses built by Edward Tilsen for the minority group in Minneapolis. The house has three bedrooms and can be built with varying front elevations."

For more information contact Jon-Jay Tilsen at jjtilsen@beki.org