A co-op that delivers on the American dream

In the evening, after work and before putting supper on, Tim and Sharla Coleman like to sit at their dining room table and read Scripture together. They read every day, even though their greatest prayer has been answered. The table, the room, the Cleveland home are all theirs.

"I've been in the Glenview neighborhood, grew up in the Glenview neighborhood, I went to church in the Glenview neighborhood, and it's a blessing to own my home in the Glenview neighborhood," Tim Coleman said.

The Colemans, who proudly display pictures of their children and grandchildren on walls and side tables throughout the three-bedroom home, are becoming homeowners through their employer, a Cleveland worker-owned cooperative called Evergreen. It runs a commercial laundry, an enormous hydroponic greenhouse and a solar panel installation service. Sharla works with the lettuce plants in the greenhouse, and Tim drives a laundry truck.

The home Tim and Sharla purchased in the Glenview neighborhood of Cleveland.
Stephanie Dhue | CNBC
The home Tim and Sharla purchased in the Glenview neighborhood of Cleveland.

"I was out of work for about a year, and when the job came, and I learned about the housing program, it just really all came into place," said Coleman, with his wife sitting beside him. She didn't want to talk, but nodded heartily to his every word. "It's the American dream to own your own home, so it was a beautiful thing there."

Evergreen launched the cooperative in 2009, initially as a job creation and economic development program. It quickly morphed into a worker-owned operation, so that employees could share in the equity and profits of the businesses. Many of the workers were poor, uneducated, some even ex-cons. In just a few years of work, they could become business owners. A few years later, Evergreen discovered another opportunity.

"Part of our challenge, then and today, to some extent is, as we are hiring from these Cleveland neighborhoods, oftentimes, one of the barriers to employment is just stable housing, another is transportation, so we've tried to address that as well," said Jim McMicken Jr., CEO of Evergreen Cooperative Corporation.

With some help from the county on property tax forgiveness and the local housing authority, which had homes available through an existing rent-to-own program, Evergreen began offering employees a five-year plan to homeownership.

"Essentially, after some financial training and some qualification, our eligible employees are able to purchase a home that they then pay for via payroll deduction, so we're helping them make those payments on a timely basis the first of each month by deducting from payroll," said McMicken. "The goal is to structure it in such a way that they own those homes outright within the first five years."

They own it without a mortgage and without paying taxes for the first five years. They can also live in the home as they pay for it, which the Colemans do.

"You don't miss it the first couple of months, of course you miss it, but you just get into the habit of paying that just like if you have to pay your grocery bills every two weeks," Coleman said. "One thing I like about it, it comes out of your check before you even see it, so that builds your credit up, too, because you're always on time."

Affordable housing has reached a crisis level in America. More than 11 million Americans spend more than half their incomes on rent, according to Harvard's Joint Center for Housing Studies. The home ownership rate is hovering near a 50-year low, according to the U.S. Census.

Tim and Sharla Coleman at their home purchased through the cooperative.
Stephanie Dhue | CNBC
Tim and Sharla Coleman at their home purchased through the cooperative.

"It's kind of astounding, given the importance of housing," said Chris Herbert, the Harvard center's managing director. "Go back to the Housing Act of 1948, a decent home and a suitable living environment for all Americans was the national goal. We have not achieved that, and yet we are not talking about it."

The issue of affordable housing has been conspicuously absent from the political dialogue today and even before the 2016 race began. President Barack Obama made no mention of housing in his last State of the Union address, even as rents were hitting historic highs and home price gains were accelerating again.

"The real solution at the federal level is probably going to mean more money, and that's certainly a nonstarter right now in Washington. So you identify the problem, say we should do something about it, and you can't then say, 'We need to spend more,' because there's no reason to go down that path," said Herbert. "So what we do see is a real disjoint because while people aren't talking about it at the federal level, the presidential level, if you go to any city in the country, it's issue No. 1 for so many mayors' agendas."

Cities continue to struggle with homelessness on their streets, and increasingly, with families trying to stay in neighborhoods where they've lived for decades. Herbert applauds the Evergreen program, but questions whether it could work in more expensive cities.

Cleveland's housing market is currently the most affordable in the nation. McMicken initially had to raise philanthropic fund for the program. He has since gotten a lot of interest from affordable housing advocates across the country, and as much as he'd like to expand it to other cities, he admits the model might not work.

"It's very aggressive, and the only way to do that would be having access to the types of real estate pricing that we have in Cleveland. If you were to attempt to do this somewhere else, you would either, a) need more funding up front to catalyze it, or b) more time, so maybe you pay for it in eight years instead of five or 10 years instead of five," he said.

Jim McMicken, CEO of Evergreen Cooperative
Diana Olick | CNBC
Jim McMicken, CEO of Evergreen Cooperative

For now, in Cleveland, it is working for Tim and Sharla Coleman and several other Evergreen workers. The Colemans are even considering buying another home through the program as an investment.

"It says a lot about your future, in the neighborhood, a lot of home owners here keep the neighborhood good," Coleman said. "It opens the door to a lot of other things."

A door, all their own.

— CNBC producer Stephanie Dhue contributed to this story.

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