After building more than 120 houses for low-income area families, Habitat for Humanity of Metro Denver is suddenly facing a tough lot: No lots.
The group is being out-run, out-bid and out-maneuvered by private developers whooping it up in one of the biggest residential booms ever seen on the Front Range. Two years ago Habitat acquired lots to build nine new homes within the city of Denver. So far this year, it has none. Says Habitat staffer Lynne Brown, "We're affected by the market like everybody else."
But unlike everybody else, Habitat for Humanity International is not out for profit. The Christian ecumenical group, whose Denver affiliate celebrates its twentieth anniversary this year, is dedicated to building "simple, decent housing" with volunteer labor for qualified families. Mortgages are interest-free and based on 25 percent of a family's income; in exchange for its modest but pleasant new home, the family must come up with a $1,000 down payment and put in 500 hours of its own "sweat equity" labor on a building site.
Habitat raises construction money through volunteer efforts, donations and in-kind gifts. It accepts government grants only to purchase land or to develop needed infrastructure such as water or sewer lines. But it still operates on a shoestring: The organization generally can't spend more than $10,000 for a single buildable lot; frequently that sum is paid partly with cash and partly with a generous tax break for the property owner/donor.
Habitat has traditionally found Denver properties via contacts among the ten real-estate agents, attorneys and others who serve on its site-selection committee or simply by having members drive up and down streets in areas with potential. In the past, citizens have alerted the group to vacant properties in their neighborhoods, or landowners themselves--or their heirs--have called Habitat headquarters about a possible sale or donation.
But the current building boom seems have to have driven local generosity into the basement. "We have fewer people calling in to offer donations," says Scott Clark, an attorney and chairman of the all-volunteer committee that targets and purchases land for building houses. "It's more difficult for us to find property that's priced at a level that's affordable and within our limitations. It's a real concern."
The group generally zeroes in on lots that are a good socioeconomic and aesthetic fit for the typical 1,100-square-foot Habitat home. Many families would like to live in Denver because they have jobs in the city; other recent building sites have included Lakewood, Aurora, Arvada and Thornton. "We try to find neighborhoods that are appropriate," says volunteer coordinator Pandora Reagan. "We haven't built in Castle Rock, for example."
Although it prefers a group of lots--so several houses can be built at once, cutting expenses--Habitat often buys "in-fill" lots, the odd vacancies between houses in an established neighborhood. In the past, most commercial builders didn't bother with in-fills because they were not cost-effective. In the current building climate, however, even these empty spots are being snatched up for a pretty price.
"What we see is that formerly overlooked second-tier areas are being picked up and built on for affordable housing," says Mike Rinner, senior analyst for the Genesis Group, a private company that analyzes area real-estate trends. Efforts to improve Denver public schools and a decrease in urban crime are making older Denver neighborhoods "that nobody would have looked at five years ago" more attractive to builders and buyers, he says.
Close to 2,000 building permits for single-family homes were issued in Denver last year; according to the Homebuilders Association of Metro Denver, that's a steep increase from the 1,220 that were issued in 1997. In the seven-county metro area, 19,642 permits were issued for single-family housing construction in 1998, up from 17,662 the previous year. Over the last ten years, the number of housing permits issued in the metro area has increased 400 percent.
As a rule, developers in the Denver area spend 16 to 20 percent of the finished cost of a house on the lot alone. A modest single-family detached home comparable to a Habitat design, built on a 40-by-100-foot lot with no basement, runs about $100,000 to $110,000 on the open market, Rinner says. By contrast, the three- and four-bedroom Habitat houses cost about $40,000 to $60,000 to build. All of the labor is free, supervised by a crew of AmeriCorps volunteers and a handful of Habitat staffers.
The building boom has also hammered Habitat's volunteer labor force. With such demand for their labor in the marketplace, volunteers with construction skills are hard to find. Last year close to 8,000 volunteers worked on Habitat houses in the metro area, but many were one-time helpers or members of a church or school group. The organization has fewer than 500 "regulars" who show up frequently and have--or develop--solid building skills. "When you have thirty schoolkids on the site," says Reagan, "you need a few skilled carpenters, too."
Last week two dozen students from Golden High School, clad in fleece and jeans, watched as a pump truck poured concrete into the wooden foundation forms they had built the day before. Over the next few months the foundations will be topped by two more Habitat homes, part of a block of nineteen being built in Lakewood between Chase and Benton streets, just off Colfax Avenue and Sheridan Boulevard.
Four of the houses--one- and two-story, some with porches, all sided in yellow, beige, aqua or light-blue pastels--are already occupied by Habitat families. For years this block stood empty, zoned for commercial development but with no buyer, scattered with piles of litter and a few mattresses used at night by the neighborhood homeless.
Habitat has nearly doubled its own building rates in the past four years. The Denver affiliate, one of the ten oldest in the U.S. and the largest of the 21 Habitat chapters in Colorado, rarely renovates houses, because the older buildings can cost more than $60,000, making it cheaper to build anew. But with the scarcity of empty lots, the group "would certainly look at a rehab offer," Reagan says.
In the meantime, Habitat plans to build six houses in Aurora during its annual "blitz build" this summer and hopes to "learn to adapt better to the market," says Clark. As a rule, nonprofits don't move as fast as private companies "because a lot of work is done by committee," he says. "We'll have to act more quickly. When we see a lot, we'll have to put an offer on it immediately before we lose it to a higher bidder.