Dive Brief:
-
Nonprofit homebuilder Habitat for Humanity has shifted its focus from building new homes to renovating existing structures.
-
The Georgia-based big builder is a charitable organization that enlists the support of volunteers and homeowners to build and rehab homes for low-income families. The organization built 3,233 new affordable homes and renovated 1,435 during its last fiscal year. Over six years, its renovation work has doubled and its new construction projects have decreased by approximately 30%, according to The Wall Street Journal.
-
Many of the fixer-uppers the builder rehabs are homes in foreclosure, often located in blighted neighborhoods. The builder said it will continue to erect new homes while expanding renovations.
Dive Insight:
"The biggest part is land,” Habitat CEO Jonathan Reckford told The Journal of the charity’s decision to take a step back from building. “If we can’t get it donated, we have to buy land. And that becomes a big part of the cost.”
Like Habitat, many homebuilders have been squeezed by land prices since the start of the recession, when land development slowed severely. If the builder pays too much for the land, it has to increase the price of the home it builds there. That doesn’t work for Habitat, whose business model requires it to build affordable homes without losing money.