Habitat for Humanity Snaps Up Land
From the Portland Business Journal 1/15/10
By Wendy Culverwell
As prices continue to plummet, Habitat for Humanity and other housing agencies are rushing to buy land for future home sites.
Habitat for Humanity Portland/Metro East has launched a campaign to build a four-year inventory of buildable lots, or about 135 construction sites.
The average price paid for residential land in the Portland area has dropped 44 percent in the past three years, to about $166,000, according to the Regional Multiple Listing Service. The organization also notes a sharp drop in the number of transactions – 432 in 2009 compared to 1,240 in 2005.
That makes it a prime time to buy suitable land for Habitat homes.The organization builds simple homes for low-income families.
The Housing Authority of Clackamas County and other housing organizations, including Portland-based Proud Ground, hope to do the same.
Land-banking, as it’s called, is not a new strategy for the Portland chapter of Habitat for Humanity, one of 33 in the state. Five years ago, it committed to doubling its capacity to build plain, low-cost homes to about 40 per year.
It received applications from 400 families in 2009, a 60 percent increase from the 250 it normally receives.
Soaring real estate prices in the middle of the decade kept Habitat from banking much land, but now that costs are falling, it is actively looking for suitable sites, soliciting financial support from donors and applying for government grants.
“Right now, the dollars raised can go a lot further,” said Steve Messinetti, executive director of the chapter, which serves Multnomah and Clackamas counties.
Habitat pays below-average prices by targeting affordable neighborhoods and working with sellers willing to sell at below-market prices to support its mission.
Habitat has about 50 buildable sites, enough to meet need for the next two years.
In recent months, Habitat has identified a handful of prospects, many of them stalled subdivisions.
Messinetti said land-banking saves money by giving the organization time to recruit volunteer designers and engineers, services it generally has to pay for. By lining up land four years in advance, Habitat could cut its development costs by half.
It costs about $30,000 to prepare a site for construction – money that goes into the price of the home.
Statewide, Habitat for Humanity expects to construct its 1,000th home soon.
Like Habitat, the Housing Authority of Clackamas County is in the market for sites, but Trell Anderson, executive director, said progress has been stymied by sellers who don’t believe real estate prices have fallen.
The Clackamas Housing Authority administers federal Section 8 housing vouchers and manages a portfolio of public and affordable housing. Its 920 units of housing are among the oldest in the state. The agency’s long-term goal is to sell many of its single-family residences.
The housing authority strives to locate its units close to shopping, services and transit. It has a six-year wait for Section 8 vouchers and a three-year wait for housing.
Proud Ground, formerly Community Land Trust, is also interested in land banking, though it also places an emphasis on rehabilitating existing housing.
Jesse Beason, executive director, said lack of credit is the main barrier to banking future sites.
“Everybody wants to take advantage of it, but if banks aren’t lending, nobody can take advantage of it,” he said.
Proud Ground has developed or rehabilitated 116 homes in the Portland area. It sells them to buyers under terms designed to keep the homes affordable when they’re resold.
In an ironic twist, the recession and downward pressure on prices have made home ownership more accessible to buyers who in the past might have needed help from agencies such as Proud Ground.
“Our families are able to seize on the downturn and take advantage of more affordable home prices (on their own),” Beason said.
email@example.com | 503-219-3415
Habitat for Humanity Snaps Up Land