A new direction for affordable homes
The nonprofit best known for helping people in need build their own homes in low-income areas has joined investors in buying dozens of foreclosed houses in more mid-level communities.
“We’ve been able to go into nontraditional neighborhoods,” said Penny Seater, executive director of Habitat for Humanity of Seminole County and Greater Apopka. “Our families have gotten access to housing in neighborhoods with really good schools and safety — those were the two big things.”
Because many foreclosures are in more desirable neighborhoods, the nonprofit was able to pick up financially distressed houses and provide a better environment for its buyers, she added.
Habitat for Humanity’s move beyond historically low-income areas and into more mainstream neighborhoods reflects a new direction for affordable housing. In June, the U.S. Supreme Court ruled that housing agencies may no longer place families exclusively in low-income pockets and must instead allow them to locate in areas with high-performing schools and promising job opportunities.
Seater said she occasionally gets pushback from homeowners in Habitat’s expanding geographic footprint. She said she has “heard rumblings” of complaints from Maitland-area homeowners, for instance, about plans for a new Habitat house there.
Complaints usually die down, she added, when people realize the nonprofit scrutinizes prospective buyers and the buying families must invest 500 hours of “sweat equity” in renovating the home.
“These houses are nicer than anything around them,” she added.
In Orange County, Habitat for Humanity of Greater Orlando is rehabbing its 38th foreclosure since starting near the bottom of the market in 2009.
“Certainly this was a different
direction, but it made a lot of sense,” said Greg Allen-Anderson, chief program officer for the Orlando-based housing group. “Why build new when there are so many distressed properties on the market?”
When Orlando’s Habitat group started working with Orange County on the foreclosure reclamations, the focus was on the Pine Hills area, but then it expanded to Azalea Park and areas of east Orange County, Allen-Anderson said.
In addition to Pine Hills, much of Orange County’s foreclosure-reclamation money has been spent in the Meadow Woods area in south Orange, said county housing manager Mitchell Glasser, who has overseen what’s called the federal Neighborhood Stabilization Program.
Orange County, together with Habitat and other nonprofits, has purchased 259 homes throughout the county since 2009. Those foreclosures might otherwise have been purchased by investors and turned into rentals, which does little to help restore a neighborhood, he added.
Habitat’s reach is likely to expand in the next few years as the Orange County Commission looks at partnering more fully with it in an effort to spend the last $8 million from a $40 million federal fund aimed at stabilizing foreclosure-wracked neighborhoods. The county is also working with the federal government to be able to
In Orange County, Habitat for Humanity of Greater Orlando is rehabbing its 38th foreclosure since 2009.
spend those housing dollars on parks, community centers and other uses.
Through the county’s program, Habitat for Humanity groups in Central Florida have sold 41 of the foreclosed houses to very low-income buyers. Habitat has purchased the homes for an average of $41,700, then spent an average of $49,800 rehabbing them before selling them for an average of $83,000. Despite losing an average of $8,200 per property, Orlando’s Habitat benefits by holding the mortgage. The new owners’ monthly payments average $491, which includes mortgage, property taxes, insurance and a termite bond.
Prices are so affordable that some neighbors have raised concerns that their own property values will decline, said Seminole County resident Deanna Yarizadeh. She said homeowners in the Casselberry area have been vocal on neighborhood message boards about opposing plans for a nearby Habitat house.
“I think it’s important for them to do a little bit of research before getting out their pitchforks and petitions,” Yarizadeh said. “It’s important to bring people out of poverty and into really good schools with access to services. It’s not going to lower the value of homes.”
Seater said she “guarantees” the houses her Habitat group builds are better housing stock and more energy efficient than houses surrounding them. And because they sell for appraised value, she added, they reflect home prices in the neighborhood.