After a six-year, voluntary building suspension, Greater Cleveland Habitat for Humanity is back to constructing new homes from the ground up. The nonprofit organization, with its mission of “a world where everyone has a decent place to live,” was hardly idle during the time off. Its hammers and saws rehabbed 105 homes during the past few years, and it continues that work.
“But we halted new construction to focus exclusively on rehabbing abandoned, vacant homes in Cleveland,” says John Habat, president and CEO of the organization. “The foreclosure crisis was a great opportunity to acquire clusters of houses that could be fully rehabbed at a fraction of the cost of new construction. Working on clusters also allowed us to launch other revitalization activities, such as helping existing residents with exterior repairs. Now the large clusters of vacant houses are gone, but thousands of vacant lots remain.”
New construction costs twice as much as a rehab, according to Habat, so “the ability to help more families is lessened” when there is only so much in the piggy bank. The average rehab costs $60,000 to $80,000 compared to $170,000 to $200,000 to build a new house, Habat says. But rebab has its own financial challenges as well.
“When you are working on a 130-year-old house and start knocking down walls, sometimes you can find yourself in a pickle because of the unexpected,” says Habat. “But every house — newly constructed and rehabs — has a budget with us.”
In addition to returning to new construction, Habitat’s new five-year strategic plan includes concentrating its efforts on Cleveland’s Metro West area and Buckeye Woodhill neighborhood, where it has an established presence. Habat says clusters of improved housing on adjacent streets leads to local pride, a decrease in crime and an increase in market values. Homeownership also contributes to growing generational wealth in a way that renting does not, according to Habat. He believes “unstable housing is a key reason for unstable families and the poor economic, educational and health outcomes they endure.”
“We can’t impact the city as a whole. But certainly we can impact a neighborhood. And neighborhoods impact cities,” says Habat.
During the past 31 years, Habitat boasts support from 250 sponsor teams and 80,000 volunteers. But costs continue to escalate.
“The bulk of Habitat’s funds come from private philanthropy and proceeds from our ReStore retail operation,” explains Habat. “Although Habitat has received some government aid, it pales in comparison to the significant tax credits and HUD subsidies that support lower income affordable rental housing. Most of these lower income rental projects receive $150,000 or more per unit in tax credits and HUD subsides. Some of the more recently announced rental projects advertise a one bedroom for $1,200 a month. That’s affordable?”
The average monthly payment for principal, taxes and insurance of a Habitat house here with a 15-year mortgage is $378. Habat also believes what makes his organization unique is that fact that clients are engaged, committed and community-minded homeowners “from day one.” Nine out of 10 people pay their monthly mortgage every month and completely pay off their mortgage, he says.
The third component of Habitat’s strategic plan is to raise the $16 million needed to fund 75 newly constructed houses and 50 full rehabs in the Metro West area and Buckeye Woodhill neighborhood. Eight million dollars has already been pledged, and the organization is currently taking donations.
The new plan has an ultimate goal.
“We will be the leader in providing affordable homeownership opportunities to families shut out of the market-rate housing options in Cleveland,” proclaims Habat, adding “almost half of Clevelanders are considered housing burdened, which means they pay more than 30 percent of their monthly income for rent.”
“Incredibly, 26 percent pay 50 percent or more. What they are renting for a disproportionate share of their income is often unsafe and unsanitary, if not hazardous,” says Habat. “Habitat’s ambitious strategic plan expands on our recent work to champion homeownership opportunities for as many Clevelanders as possible.”
Those who are homebuyers of a Habitat newly constructed or rehabbed home range “from singles, to moms and dads with eight kids, to single moms with two or three children,” according to Habat. Applicants must meet income eligibility guidelines and be willing to participate in the process. Future Habitat homeowners take financial educational classes and can participate in other programs that include college financial aid help and home maintenance.
Habat acknowledges the overwhelming joy he sees in all homeowners when they receive their keys to a safe, healthy home and the dreams and opportunities that go with it. But, he admits to a special place in his heart for a particular refugee family that arrived in the U.S. after living in a tent city for 11 years.
“They had no bathroom, no stove during that time,” says Habat. “You can’t imagine their joy and appreciation. I love and respect the refugee families we serve.” (2110 W. 110th St., 216-429-1299, clevelandhabitat.org)