Getting an Education on Habitat for Humanity Houses

New Orleans    In Vancouver recently I made a point about the overheated housing market there by noting that I had read that a Habitat for Humanity house had sold for $330,000, which to me seemed absurdly high from what I thought I understood about the sweat equity and low-cost building model for Habitat houses.  Turned out, I was talking through my hat, and now I’m less sure about Habitat’s model and how it works out for lower income families.

Talking to one of our leaders from Toronto, who I had heard mention having a Habitat house in the Scarborough area some years ago, I asked her how that deal worked out.  Her house also cost $330,000, so rather than that being something absurd in red hot Vancouver, that may be standard Habitat fare in Canada.  A little search on the web says the average Habitat house cost is $90,000 in the United States.  A semi-urban, semi-rural area in Maryland lists its homes at between $125 and $145,000.  Every affiliate seems to be able to set its own rules and prices, though the house price, not counting the value of the sweat equity labor, is supposed to equal the actual building cost.

The sweat equity our ACORN leader had invested along with friends, family, and ACORN members and staff was the effective exchange that substituted for a downpayment.  She reported that at the closing she had to sign three mortgages, including one with the City of Toronto that she didn’t even know about until then.  Home ownership has become harder and harder for lower income and working families in the last decade.  Habitat is clear that the homes have to be affordable within the income of applicants but is also clear between the lines that their homes are really for working families, rather than the very poor.

Habitat handles their mortgages at no interest, which is fantastic, but in some ways hearing the stories from our members now and reading their overall website and that of some of their affiliates, there are more similarities between their business model and that of some of the installment land contract companies the ACORN Home Savers Campaign is fighting than I would have imagined.  A Habitat buyer does get a deed at closing it seems, but there are a lot of restrictions written into the Habitat mortgage about everything from repairs on up the ladder.  Foreclosure proceedings seem fixed at 90-days unless there are other measures.  I found our member’s description of how much Habitat versus the owner would receive in a sale or foreclosure or default confusing, so I’ll avoid stepping off the wrong curb here for now, but I will say the whole thing was so onerous that our member refinanced to buy the mortgage from Habitat rather than continuing to be their owner-occupant as soon as she could.

Saying all of this does not dispute the testimonies from many lower income families about their joy and relief at getting into a Habitat home and that includes our ACORN member, or the good will many religious and other volunteers bring to the task of helping build these homes.  Some of the same testimonials come from owner-occupants of companies involved with installment land contracts as well and are equally sincere.

Families are desperate for affordable housing in the face of rising rents and eviction rates and grateful for almost any program or company that puts a roof over their heads.  For organizations and organizers, a little bit farther from these sharp edges dividing homelessness from homeownership, we need to take as part of our responsibility looking closer at the teeth of these gift horses and how they bite and chew.


The Ironies of Vancouver: The Post-Gentrified City

Vancouver       Vancouver in British Columbia, Canada may be a case study of the post-gentrified city.  Average housing prices have dropped all the way down to $1.4 million per house.  The Vancouver Sun reported that a Habitat for Humanity house had sold for $330,000.  ACORN Canada’s office and all of our groups are in the working-class suburbs of Burnaby, New Westminster, Surrey, and other communities.  It is difficult for low and moderate-income families to afford to even think about living in Vancouver.

The government is progressive.  Leadership has been stable with an excellent and forward-thinking mayor in Gregor Robertson for a number of years.  There is no lack of people trying to do the right thing.  There is no confusion at the top or at the bottom of the economic and political ladders that housing is unaffordable.

So, what does Vancouver do to assure that housing is affordable and to prevent the city from just become the living and working space for the rich and elite?

While in the city for the ACORN Canada board meeting and annual general meeting, the next four years city budget for capital or big construction and development projects was published.  The capital budget is big time for the coming four years, $2.6 billion.  Surprisingly though, 55% of that budget or $1.44 billion the Sun reported are “earmarked income from ‘development contributions,’ which are raised by charging real estate developers.”  At first glance, we might say that’s great, “Make them pay!”  At second glance it is hard not to think that the city of Vancouver may be riding the sharks as much as regulating them.  If developer money is funding so much of capital expenditures, then the city also depends on new development, which gives developers a lot of leverage

In fact, when it comes to affordable housing and child-care spaces, which many might argue are the top priorities for lower income and working families in the city, the capital budget is scary.  First, it only provides for 1200 to 1600 nonmarket rental house and 1000 child-care spaces, which annually is only 300 to 400 units per year and 250 child care spaces. That’s way too little.  The fiscal number for the construction was $539 million and the budget says that 99% or $535 would come from development contributions, meaning the city and its taxpayers have zero skin in those projects.  For the $117 million for child-care development contributions are 94%.

The Sun helpfully defines these development contributions.

“Development cost levies…are typically a standard calculation.  Community amenity contributions tend to be individually negotiated between the city and a developer over rezoning for a specific project and can be paid in straight cash or the building of an on-site amenity such as a pool or community center.”

One is a tax and the other is what we would normally see emerge from community benefit agreements, although it almost seems like the developer is driving the decision to benefit their own project, rather than the community or the city.  An amenity would seem to accelerate the rewards for gentrification as well.

It would seem like a rich, gentrified, progressive city like Vancouver could – and should – be doing so much more.