LOW-COST HOUSING SOLUTION IS SCHWARTZBERG'S MISSION

NONPROFIT GROUP SEEKS PRIVATE SECTOR INPUT

Martin Schwartzberg wants to teach people in business that they can do well and do good at the same time.

Schwartzberg, the president and co-founder of CRI Inc. in Rockville, an international real estate financial services and asset management company, is leaving the firm to devote his time to national housing problems.

Schwartzberg, 47, is launching a nonprofit foundation -- the National Foundation for Affordable Housing Solutions -- to "get the private sector back into low-income housing."

Schwartzberg said poor government and private ownership and management of properties designed for low-income tenants is a major social problem. "The government can lead, but it's hard for the government to own and manage," he said. "It just gets too bureaucratic."

Schwartzberg has a three-part plan for improving the situation that includes revamping low-income facilities, many of which are privately owned, with a combination of private and public money. He also wants the government to finance the construction of more low-cost housing, and the foundation to help find competent property managers. There are 2 million units of low-cost housing in this country and an immediate need for 3 million more, he said.

His overall goal behind the individual strategies is getting the private sector involved in low-income housing as managers, not owners.

Tax credits that were abolished in 1986 had lured many private developers into low-income housing. Now private owners work with low-cost housing almost exclusively for the real estate appreciation, he said, often placing little emphasis on quality. In many cases, he said, there is no management at all.

Low-income housing would work better socially and financially, Schwartzberg said, if the projects were "publicly owned, but privately managed by firms that could be hired and fired if they don't do a good job. ... They would do well financially and do good socially."

Federal support is essential to his plan, he said, but Schwartzberg argues that in the long run, effective management will hold down costs.

Schwartzberg is following his own strict schedule to establish his foundation, beginning with choosing its board members by the end of January. All of them, he said, will be "knowledgeable and well-respected business leaders who are interested in the cause." He plans an aggressive educational campaign and immediate work on finding new owners and managers for properties.

Schwartzberg's own interest in the issue is longstanding: He began his career in 1968 at the Department of Housing and Urban Development, where he worked for three years on housing for families with incomes of $5,000 or less.

When he and two partners formed CRI in 1974, their original intention was to work only with low- and moderate-income housing projects.

"But the government programs for low-income housing began to fade so we had to look elsewhere," Schwartzberg said.

In the late 1970s CRI began diversifying into hotels, international real estate finance and multifamily housing.

"I was less than enthusiastic," he said. "It just wasn't something that I was interested in."

Schwartzberg has $300,000 in start-up capital for the foundation, part of which he saved and part of which was donated by CRI and the other two CRI co-founders.

He will remain on CRI's board, but otherwise is "making a clean break" from the corporate world -- which does not worry him.

"I have made a substantial amount of money ... and it just doesn't turn me on anymore," he said.

"You've got to do things that make you feel good."

Articles appear as they were originally printed in The Washington Post and may not include subsequent corrections.