It’s easy for me to attack organizations like the United Way because of their bloated staff which keeps the underlying charities from getting much of your donation.  I’ll even criticize a charity that gives away money or food for not going after the actual underlying problem.  They are needed of course, but I’d rather give my money to a charity treating the problem instead of unknowingly supporting it.  Don’t cite your local charity that helps those in need in emergencies, I know they exist.

But it pains me to give a cocked eyebrow to Habitat for Humanity (HFH).  We all know how fantastic their program is.  They build houses for people who really need them.  In their vetting process applicants get a thourough check of finances and have to take classes to learn more about money management.  The most fascinating thing I learned is that the home is not simply given away.  The new owner instead receives an interest free mortgage on the house.  This is fantastic!  What a great program to promote fiscal responsibility!

However my fellow Americans we live in tough times.  Unemployment is high, morale is low, and the vacancy rates on homes in the US are twice what they were just a decade ago.  With spiking foreclosures and banks sitting on homes not even on the market yet, this real estate thing has a ways to go yet.  There are unfinished neighborhoods within a mile of my home and all the houses in there have “for sale” signs so this is something I’ve watched myself.  Habitat for Humanity just keeps on trucking though, building homes in bubble states like Arizona and an entire neighborhood in Florida!

Habitat for Humanity is showing a classic problem with charities and non-profits.  They keep their eyes on the prize and don’t adapt to changing times.  They’re no different from for-profit companies in that respect, it’s why the NY Times is the poster child for the failure of the newspaper industry.  It’s not that HFH is doing anything wrong, it’s just the continuation of the program in their current form is a bit insensitive to the times.  This isn’t a call to stop their homebuilding perhaps a suggestion for a new “pilot program”.

Let’s look at some of the problems we have today.  We can break them down into two categories and HFH can help with both.  First is the large number of unsold homes on the market.  Granted, many of these are probably larger than the homes HFH usually builds but I’m sure there is an abundance of their typical style of home as well.  They could even team up with banks sitting on many of these houses.  Habitat for Humanity could provide broker services, as well as do inspections, and continue with their interest free financing.  Maybe even throw in an extra tax write-off to the bank for selling the home through a charity.  I’d be happy to offer my services to help inspect homes or comb the bank portfolios for potential deals.

Then we’ve got people that are so broke their homes are falling apart.  Where’s the Fixing Homes for Families charity?  I’ve got a good friend who is carpenter for HFH, he’s just as good at replacing cabinets as he is at putting them in.  This would allow volunteers to continue to do their normal tasks with home building, only this time they are repairing a home for a deserving family.  Again, it could act like a 0% equity loan that they pay off over a few years.  There are more than enough experience house-flippers and unemployed contractors that might be interested in participating in a program like this.

I’m not hating on Habitat for Humanity so much as I’m suggesting they act somewhat sensitive to the times.  We don’t need any new houses for a while, but this isn’t damnation for continuing their awesome program.  Just do a little side project so your public appearance isn’t bulldozed like the home I want knocked down in the back of my neighborhood.

Photo: Brandon Cirillo

Update: It seems this post may have been a bit premature.  As a commenter below points out, programs like I suggested exist.  I was also fortunate enough to receive a tweet from the head of Habitat for Humanity in Los Angeles.  You can follow her on Twitter as @erinirish

The program is called Brush With Kindness and other programs.  Please HFH promote these more.  Thanks to Erin for the tweets.

By The Weakonomist

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categories: economics, loans