March 19, 2007 - From the March, 2007 issue

Habitat for Humanity Scours L.A. Region to Find Properties & Build Affordable Housing

Habitat for Humanity has established a global reputation for building housing for families in need, and in light of the region's housing crisis, it is no wonder that Habitat is doing robust work in greater L.A. But L.A.'s density poses challenges for Habitat and other affordable housing developers, and TPR was pleased to speak with Erin Rank, president & CEO of HFH-Greater L.A., about the efforts to adapt and expand upon Habitat's model in the region.

Erin Rank

What is Humanity of Greater Los Angeles' mission? Given the nation's and region's housing shortage, what need do you serve?

More and more families are forced into sub-standard conditions or are on the brink of homelessness because of the increasing cost of housing in Los Angeles, and we have a goal of eliminating sub-standard housing in Los Angeles, one neighborhood at a time.

We are looking at strategic areas that are ready for redevelopment-areas that the cities have identified as neighborhoods where they want to improve the existing housing and to build new affordable housing. We are working to build and rehabilitate housing so that families can live in safe, affordable housing in Los Angeles County.

There are many affordable housing developers in LA. What niche does Habitat fill?

Homeownership. We are the only organization that offers affordable home ownership opportunities to families earning less than 80 percent of the area's median income.

And it values ‘sweat equity'?

That's right. Our families are all required to invest 500 hours of sweat equity in helping to build their houses, and this requirement defines the success of Habitat for Humanity. Sweat equity is essentially volunteer labor. In my mind this is what makes Habitat for Humanity unique when compared to all other programs, because it engenders buy-in from the family.

Typical homeowners move every seven years, but Habitat families stay in their homes much longer. In 16 years we have built almost 200 units, and only two families have ever moved out. They both got better jobs-one in Portland and one in Texas. Also, we have had zero families default on their mortgage in 16 years. Since they build their homes and neighborhoods, our families have such a sense of pride and ownership that they want to pass their houses on to future generations.

In what sort of projects is Habitat for Humanity-Greater L.A. investing? Where are your building, and what housing types are you constructing?

We serve 112 communities in Los Angeles County. We prioritize those communities so that we work with those that are ready, that have innovative ideas in their housing plans, and have allocated funds toward affordable housing.

We do a combination of new construction as well as rehab construction. We have developments in Lynwood, Downtown L.A., South L.A., San Pedro, Wilmington, and Long Beach. We have built from the east side of the county to the west side of the county. We've built in Venice, Norwalk, and Whittier.

Right now we have some rehab homes that are under construction that should be done in mid-March. These are scattered site single-family homes. We also have three subdivisions coming on-line-one in South L.A. for 14 condos, one in San Pedro for 16 duplex-style homes, and one in Santa Monica with five townhomes.

Habitat typically relies on sponsors, dedicated volunteers, and sweat equity. On what other resources do you rely before starting a build?

Habitat for Humanity comprises about seven different companies under one umbrella. We have real estate development, where we acquire the land and prepare it for development. We also have the construction aspect where we serve as the general contractor, and we oversee subcontractors and the volunteer builders. Then when we transfer the property to the homeowners, we handle the escrow and serve as the lender for these properties.

We extend them a zero-interest mortgage, and we sell the homes at our cost rather than at market value. So the families pay back their mortgage payments every month to Habitat, which helps us build future homes.

We have our family services programs, which helps to prepare the families for home ownership through a series of classes. We serve as the property manager after occupancy, setting up homeowners associations and handling maintenance and repairs.

We also have a retail division, called the Habitat for Humanity Home Improvement Store that accepts donations of building materials from developers, retailers, individuals and movie sets from the entertainment industry. Donated materials are evaluated for use in our Habitat houses. Any surplus materials are sold in our store to the public, and the proceeds from the retail store help us to build more houses.

How many houses has Habitat built in Los Angeles to date?

In greater Los Angeles we have built 200 homes, and those mortgages help us build more homes. Worldwide we have built over 200,000 homes. In the United States we are the largest nonprofit homebuilder. Of the top 200 homebuilders, we are the only nonprofit listed-right now we are ranked 15th out of all homebuilders in the United States. While it might seem like a whimsical program, Habitat for Humanity has significant ability to impact communities by adding homeownership opportunities for its residents.


In a built-out metropolitan area like Los Angeles, how do you acquire the land for projects?

We work closely with cities to identify the areas that they want to build. Habitat buys land from other developers. We work with realtors to find land that is listed. We also work with cities and the county to find land that is under-utilized or is on their property inventory that may be too small for other developers. Sometimes the city or the county donates the land; sometimes they give us the funds to acquire the land. We also use state CalHOME funds help us to acquire land. Like most developers we cast a wide net to find land.

One of the things that has changed with Habitat is that we used to primarily build single-family, residential housing. In the last seven years, we've been building more of a multi-family product. Most of our new construction is townhomes and condominiums, with a community play area or meeting space feature.

How much does it cost to build a habitat home? How much is the new owner's typical mortgage?

The mortgage is usually about $120,000. If that is spread over 30 years, with no interest, a family pays roughly $333 a month for their house. They also pay property tax, insurance, and in some cases, homeowner's association dues. So their monthly cost would total $600–$650 a month.

The actual cost of the house, including land and permits, is roughly $180,000–$200,000. The difference is made up in silent second trust deeds to the city or the state. Those trust deeds are usually due and payable only if the family sells on the open market, or stays in their home more than 30 years, so they don't factor into the families monthly payment.

What are Habitat for Humanity of Greater LA.'s goals for the next five years?

With the passage of Prop 1C, more money will come into home ownership. We're also going to see more green building and design around affordable housing. Habitat for Humanity wants to make all of our neighborhoods energy efficient and to make use of green design. We also want to look at the whole housing spectrum.

Habitat's model has typically been to build new housing. But we are hearing concerns from the cities that the existing housing stock is deteriorating. So, we're launching a new initiative to work with low-income homeowners whose houses are falling into disrepair. We are going to work with them to add safety features and help with painting, clean up and other repairs that they need.

Most of the cities we've talked to have lists of hundreds of people who have contacted them asking for these services because they can't afford market-rate contractors to do these repairs on their homes. Or maybe they hired one and that person left without doing the work. We are going to serve that role, so we're looking at not just building new housing but keeping the existing housing stock functional. Habitat for Humanity strives to be innovative and expand our services around our mission.

A decade ago, Habitat's annual 'blitz build' came to L.A. Hosted in different US cities each year, it is coming back to LA along with 3,000 volunteers, this fall. Describe this annual event, and share why it is returning to Los Angeles this year.

For the last 23 years, former President Jimmy Carter and his wife, Rosalynn, have traveled around the world with Habitat for Humanity. They donate a week of their lives every year to Habitat. They select a location where they are going to build. It alternates between a U.S. location and an international location. President and Mrs. Carter pick the location based on social and economic factors.

In 1995, after the civil unrest in 1992, the Carters wanted to come to South L.A. and rebuild that part of the city. Rarely do they come to the same place twice, but, given the housing crisis in Los Angeles right now, they felt it was an important message to underscore the fact that we can still create affordable homeownership in high-cost urban areas. So this year, President and Mrs. Carter are coming again to do a one-week ‘blitz build,' where 3,000 people from all over the world will come together to volunteer to help blitz-build 100 houses in one week.

Who is expected to join in this effort? What sort of volunteers do you hope to attract?

Mayor Villaraigosa and the Los Angeles City Council are big supporters, and several celebrity spokespeople have lent their support to Habitat for Humanity. They are not just lending their name; they have sponsored multiple houses and built with us. Jon Bon Jovi is a global ambassador for Habitat for Humanity and time permitting, he will be involved in this event. The governor and the first lady have also been invited to participate. Their whole family has built with us in the past.

The volunteers themselves are people from all walks of life, and that is the interesting thing about a Habitat site. You'll have CEOs, rabbis, high school students, Kiwanians, retired folks, and people of all ages and walks of life working together on a Habitat site for one common goal, and that is to complete the house by the end of the week. People come from all over the world to build these houses. It's a chance to showcase the city and our commitment to affordable home ownership.

If TPR readers want to be involved in October's blitz build, how do they volunteer?

We have a website, where you can sign up to volunteer. You don't have to wait until October, because we have organizing and planning committees meeting right now. If someone wanted to help with special events, selecting families, planning the opening ceremonies, or has particular construction expertise they would like to lend, then please contact us now and we will find ways to get them engaged.


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