Rising Costs Hit Habitat Hard

06/28/2021
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    This home in Greenville, South Carolina, is one of many constructed by Habitat for Humanity. (Habitat for Humanity of Greenville County via AP)

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Habitat for Humanity has helped provide decent, modest homes for families in need for decades. The philanthropic organization’s mission is stated as “Seeking to put God’s love into action, Habitat for Humanity brings people together to build homes, communities, and hope.” The vision: “A world where everyone has a decent place to live.” Today, Habitat’s leaders admit they’re struggling to reach their goals.

The group works largely with volunteers. But that changed during the pandemic. People weren’t able to gather to offer their skills and labor on construction sites like they had in the past. The group had to hire contractors to complete some work that normally could be provided by its volunteers. Habitat ReStores—which sell used furniture and fixtures to fund operations—were closed for weeks. But coming out of the pandemic’s restrictions, there’s yet another challenge: skyrocketing costs on construction materials, especially lumber.

According to the National Association of Home Builders, lumber prices increased by more than 300% since April 2020. That means a single 2x4 building stud that cost about $2 in 2020 will now run about $6. You do the math: A typical 1200-square-foot, one-story ranch house will need about 200 of those studs for its interior walls. And that doesn’t take into account the larger exterior wall studs, floor and ceiling joists, roof trusses, and all the finishes, which have also increased in cost.

Morgan Pfaff is the executive director of Habitat for Humanity of Wisconsin River Area. She says the group had to cancel the second house it was going to build this year because it just can’t afford it. The one house they are planning to complete is “going to be, at least, an additional $13,000 of contracted labor that we hadn’t budgeted for,” Pfaff says. “Then you add in the cost of materials, and it’s really upside down.”

Local chapters in the Habitat network are trying everything they can think of to cope with the increases. They are taking out loans, increasing fundraising, and using alternative construction materials. Some had stockpiled materials at local supply stores before the pandemic. In those cases, many of the providers are honoring pre-pandemic pricing. And officials say that donors are stepping up to contribute too.

In each of the past three years, the nonprofit organization has built an average of 3,000 new homes in the United States. It continues to be one of the top affordable homebuilders in the country. But experts say Habitat’s work can’t solve the current shortage of nearly seven million affordable homes in America.

Habitat for Humanity works with the families who need housing. Able-bodied family members learn to build alongside volunteers so that they put in “sweat equity” to the homes they will one day own. They pay for the new constructions through a no-interest mortgage program that is crafted to fit within the family budget.

“One of the challenges facing Habitat is . . . working with families who were previously approved for a finance package that did not account for these increased costs,” says Nancy Lee, executive director of Habitat for Humanity South Carolina.

(This home in Greenville, South Carolina, is one of many constructed by Habitat for Humanity. Habitat for Humanity of Greenville County via AP)