Edward Norton's $9,000,000,000 Housing Project (that's $9 Billion)

With the stock and credit markets in full meltdown mode -- and Congress, the media, and taxpayers melting along with them -- late September was not a good time to be in the housing sector. But some good news went largely unnoticed. In Los Angeles, Mayor Antonio Villaraigosa announced an ambitious five-year, $5 billion plan to build or restore 20,000 affordable-housing and mixed-income units in neighborhoods threatened by mass foreclosures. To pull it off, the mayor will need public and private financing, but he had one critical piece in hand: a $700 million check from Enterprise Community Partners.

Meanwhile, in Chicago, Mayor Richard Daley said that the city would launch a green retrofit program for thousands of units of low-income housing. The initial funding will come from Enterprise.

And in D.C., Enterprise was busy on Capitol Hill. Back in January, newly minted CEO Koo warned the Senate Committee on Banking, Housing, and Urban Affairs that looming foreclosures were going to hit cities hard. "The Center for Responsible Lending has estimated that 44.5 million homes adjacent to subprime foreclosed properties will lose value," she testified, "and $223 billion in neighborhood wealth will be lost." She walked the senators through an earlier Enterprise-inspired program that had helped the Federal Housing Authority dispose of 40,000 homes in the last foreclosure crunch, and she made the case that a $10 billion fund to shore up neighborhoods could also generate new revenue and more jobs. Chairman Christopher Dodd, among others, took note.

As the reality hit that Fannie and Freddie were near collapse, Enterprise stepped up its campaign to turn the idea into reality. By June, as the 600-page Housing and Economic Recovery Act worked its way through Congress, Koo's proposal morphed into the Neighborhood Stabilization Fund, a $3.9 billion block grant to help states and local governments buy or rehabilitate foreclosed properties. The bill even included language championed by Representative Barney Frank that favored use of the fund for green housing.

But at the other end of Pennsylvania Avenue, the bill's momentum evaporated. A "fact sheet" from the White House raised the "bailout" objection: "The principal beneficiaries of this type of plan would be private lenders, who are now the owners of the vacant or foreclosed properties, instead of struggling homeowners who are working hard to stay in their homes." President Bush was adamant. Take the fund out, he insisted, or the bill dies on my desk.

It was not the first time Enterprise had felt push-back from the White House. In 2003, a Bush administration tax proposal threatened to gut the low-income-housing tax credit, the basic financing vehicle for affordable housing across the country since Harvey, then a senior executive at Enterprise, helped establish it in 1986. Bush proposed that companies could either use tax credits or increase dividends to shareholders, but not both. "It would have entirely removed the incentive for corporations to invest in any tax-credit program," says Stockton Williams, senior vice president and chief strategy officer for Enterprise. In the midst of the battle, Karl Rove called with a message for Enterprise: Stand down. "It was a very intense experience," says Williams diplomatically. Ultimately, moderate Republican senators scaled back the tax cuts and, in the process, killed the troublesome provision.

This year, it was Fannie and Freddie's plummeting fortunes that got Bush to blink. According to two people familiar with the matter, Treasury Secretary Henry Paulson went to the president in early July and told him in Washingtonian terms to hold his nose about the stabilization fund and sign the bill. "Paulson was no fan of the provision," says Williams, but by then, the magnitude of the mortgage crisis was stark.

For places like troubled Tarrant County in North Texas, relief arrived in record time. The county, which includes Fort Worth, was facing a dramatic year-over-year spike in foreclosures; in one zip code alone, 38 of every 1,000 homes have been posted for foreclosure. In September, the county was awarded a $3.3 million allocation from the new Neighborhood Stabilization Program. (By contrast, provisions in the behemoth housing bill to help individual homeowners renegotiate their existing loans to avoid foreclosure didn't go into effect until October.) Says affordable-housing expert Frank Alexander, a professor at Emory University Law School: "The neighborhood stabilization grants are the only good news coming out of all of this for the affordable-housing marketplace."

Washington-based emergency measures aren't the only innovations Enterprise is championing in this volatile climate. It has smart long-range plans, too. And, surprisingly, to understand them, the best person to start with is Edward Norton.

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