Friday, May 11, 2012

Habitat for Humanity stabilizes Property Values

According to this recent Times article, Habitat for Humanity, the Christian charity founded in Georgia in 1976, has been making some smart purchases during this recent housing price turndown. And clever philanthropists are noticing and adding their money to the group's efforts.

In a depressed real estate market, Habitat, the nonprofit housing group, has been buying vacant land on the cheap, shopping from banks in repossession and foreclosure sales to squirrel away for housing projects years in the future.

This spring, the first 22 homes in the largest Habitat project in Oregon history — a 65-unit subdivision left partly built by a private developer who abandoned it when the market crashed — is rising on Portland’s east side. Habitat, meanwhile, has become the 10th-largest home builder in the Portland metropolitan area by housing volume, according to a local building trades association.
The 150 lots bought by the fund will keep the group busy for five years or more, even as it has increased its home-building output by 50 percent, to 30 homes a year from 20.

In Nevada and Florida some Habitat groups stopped new construction entirely and shifted to renovation, buying abandoned properties in cities racked by high foreclosure rates. 
Business leaders and housing experts said that Portland — partly through Habitat’s timing in betting big in a down market, — is creating something that will resonate long after the recession: Habitat neighborhoods.
“The market, and the depressed prices, allowed us to carry out our goals.”
The scale and scope of the new Habitat projects, city officials say, will allow entire blocks on the city’s struggling east side to be anchored by owner-occupied housing. Those owners, under Habitat’s model, would earn 30 percent to 60 percent of the median Portland area household income (around $20,000 to $40,000 a year for a family of four), living in homes they helped build themselves, and paying down their mortgages with zero-interest nonprofit loans.
“As a housing commissioner we feel like we’re trying to plug a lot of leaks in the dike,” said Nick Fish, a Portland city commissioner in charge of the housing bureau and parks and recreation. And the city’s budget has still not recovered from the downturn. Habitat, especially in east Portland, he said, is filling the gap.
“One of the ideas that they have floated is a plan, outside government, to take back blocks of the city, block by block, using their tool kit, with modest government contributions,” he said. “We can start building around their work.”

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