Habitat for Humanity International has been known for its mission to provide new homes for the poor ever since former President Carter, its most famous volunteer, grabbed work gloves and hammer in the 1980s to help build dwellings in struggling communities.
These days, Habitat is renovating the way it does business because of the mortgage meltdown, in which loose lending standards left thousands of foreclosed properties sitting vacant in the very neighborhoods the group aims to revitalize. Habitat is increasingly acquiring foreclosures, renovating them and selling them to needy families, providing zero-interest loans when they don't qualify for a mortgage. Called the Neighborhood Revitalization Initiative, the program is Habitat's attempt to address the national foreclosure crisis.
"We have, for most of our existence, really focused on new construction," said Mark Andrews, Habitat's senior director of U.S. operations. "But it's becoming more and more clear to us on a national scale that new construction isn't always the best fit."
In the Los Angeles area, the new strategy has become a way for Habitat to keep from losing money on the homes it builds given the precipitous decline in property values.
Although building a new home may cost the group $250,000 to $300,000 -- including the price of land, permits, streets, sidewalks, utilities and construction -- the finished product might appraise for considerably less, said Erin Rank, president and chief executive of Habitat for Humanity, Greater Los Angeles. On the other hand, the group can buy a home for less than $200,000 and break even after putting about $40,000 worth of repairs into it.
The program has brought Claudia Maria Velasquez, 34, and her truck-driver husband, Jose Javier Velasquez, 36, to the threshold of homeownership. The couple now live in a cramped, one-bedroom apartment that they share with their sons Brian Javier, 6, and Michael Alexander, 5, who is autistic.
The crowding makes life difficult, Claudia Velasquez said. There is little space for the two boys. Michael escapes and tries to run into the busy street. A Mexican bar across from the apartment hosts mariachi groups that wail loudly well into the night, waking the family. Until recently, squatters in an abandoned home near them stole electricity from the couple's apartment building. That ended when the home burned.
Their new life will be a substantial change, Claudia said.
