Habitat For Humanity Struggling Under Weight of Material Costs, COVID

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Rob Wells

Habitat for Humanity, the charity organization that builds homes for the disadvantaged, faces financial trials. The first blow came from the virus; safety precautions severely reduced the number of volunteers they could have onsite. The second came from the lack of revenue from closed ReStores, a chain of reuse stores Habitat for Humanity runs to partially fund their projects. The third blow came from supply chain issues—the same issues faced by all residential contractors.

According to one executive director for Habitat for Humanity in Wisconsin, Morgan Pfaff, they had to cancel one house entirely because they couldn’t afford the $13,000 extra in materials.

The charity seeks to change its situation with increased fundraising, loans, and alternative construction materials. In an act of goodwill, some lumber yards prioritized materials for the Habitat for Humanity.

The charity has built more than 3,000 homes in each of the past three years. In that time, they have received $1.5 billion in contributions and in-kind gifts. That money, along with federal grants, subsidizes mortgages for homes built by recipient families and volunteers.

“One of the challenges facing Habitat is that a lot of affiliates are working with families who were previously approved for a finance package that did not account for these increased costs,” said Nancy Lee, the executive director of Habitat for Humanity South Carolina. The increase is “going to cost us, as a non-profit, to relook at our whole portfolio and how we conduct business. With all of these increasing costs, how do we continue to maintain the same quality of service that we provide to our clients without placing ourselves in financial hardship? Those are hard questions.”

Despite being one of the top affordable homebuilders in the country, experts say that a shortage of nearly 7 million affordable homes exists. As a result, other solutions will be needed to solve that problem.

Habitat for Humanity, in the face of financial hardships, seeks solutions to continue serving their customers in the face of construction industry issues brought on by the pandemic.

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