Habitat finding new ways to help

The vintage Tudor house in Seattle's Central Area had severe dry rot and a hole in the roof. Stench from mold was so strong that workers readying the place for a stripped-to-the-studs remodel could barely breathe and had to cover their mouths.

It's a common occurrence in the Puget Sound housing market: A new buyer comes in to transform a fixer into a treasure. But this remodel is being done by an unlikely purchaser — Habitat for Humanity.

Habitat is gradually moving away from the affordable-house model upon which it earned its reputation — the modest one-story bungalow, built from the ground up on a single lot. Land in King and Snohomish counties is just too expensive to make that kind of house pencil out anymore, Habitat officials say.

"Over the past 10 years, the land we have purchased has gone up in price by 400 percent and our costs of construction have gone up 300 percent, but the incomes of the families we serve are staying relatively flat," said Dorothy Bullitt, executive director for the Habitat affiliate in Seattle and South King County.

In order for Habitat to continue to create housing that its low-income clients can afford to buy, local chapters are taking a host of different tacks.

They are renovating houses and building multiplexes. More than ever, Habitat is counting on cities, housing authorities and even private developers to donate land or space where it can build.

In a major departure, some Habitat homeowners are buying only the house itself, not the land beneath it. As a result, a key benefit of Habitat homeownership — earning equity through rising property values — is being reduced.

The Habitat affiliate in Seattle and South King County expects to build 40 homes this year and next. Bullitt said only three of them will follow the classic Habitat model of a single-family home on a single lot in which the homeowner purchases both the house and the land.

Ten years ago, that was Habitat's entire local portfolio.

"We're having to learn a lot of new things," Bullitt said.

Two constants remain: Habitat continues to rely on mostly volunteer labor, and homeowners still are required to contribute a set number of those volunteer hours. Using volunteers helps keep the price of the house down, and within reach for the low-income buyer.

But even the tradition of using volunteer labor is becoming difficult to sustain. Building multiplexes and remodeling houses are more complicated than constructing a kit house from scratch. The work involved sometimes goes beyond the skills of volunteers.

"Another difficulty in remodeling is in projecting and controlling costs because they are so unpredictable," said Tom Gaylord, who is supervising a different Habitat project in the Central Area.

On that job, Habitat had to learn something else new — the art of moving an existing house to a new lot. Gaylord coordinated the relocation of three 1940s-era cottages that otherwise would have been demolished, part of a deal Habitat cut with the city of Seattle, which provided the houses and the lots.

"Moving houses is a huge logistical challenge," he said.

Yet another departure from Habitat's traditional way of doing business can be seen in Federal Way. Within the Westway subdivision, Habitat is repairing decaying homes owned by low-income people.

"Since we're not able to build enough new housing because of land costs, it makes sense for us to serve people in this way," said Diane Gallegos, Habitat's associate director overseeing the Westway project.

Westway was built in the 1960s as a subsidized-housing project of mostly duplexes. It evolved into a market-rate subdivision that offers some of the least expensive, yet poorest quality, housing in the region. Over the next three years, Habitat plans to renovate about 36 of Westway's 136 homes.

The first remodel is of a duplex that requires about $60,000 of work per unit, Gallegos said. "Why would we invest so much into these homes? Because the only other option is to do nothing."

Local Habitat chapters are partnering with cities and housing authorities as a means to obtain land cheaply. Habitat is building homes, almost all of them multiplexes, in three Seattle Housing Authority mixed-income communities — NewHolly, Rainier Vista and High Point — as well as at Greenbridge, a similar King County Housing Authority redevelopment in White Center.

Trying another new approach, Bullitt is negotiating with three private developers in hopes that they will set aside entire floors within their market-rate condominium projects for Habitat homeowners. The developers may bite because doing so puts them in the good graces of cities and housing authorities, which could reward them later with contracts.

"Finding these big partners is vital to our future," Bullitt said.

The situation is no different on the Eastside and in Snohomish County, where the price of land also has shot up.

"We haven't looked at land in South County for a long, long time, and the only way we would consider it is if someone donated the land to us," said Mary Fears, executive director of Habitat's Snohomish County affiliate. "We're doing more townhouses and condos as opposed to single-family homes."

To help navigate the learning curve, Fears plans to pick the brain of a Habitat affiliate that has experience in acquiring old apartment buildings and rehabbing them — in Brooklyn, N.Y.

On the Eastside, Habitat is building 50 single-family houses within the Snoqualmie Ridge subdivision, a concession that developer Weyerhaeuser gave the city of Snoqualmie in order to obtain permits. Habitat, which has completed 26 of the 50, is selling the three-bedroom houses in the range of $85,000 each, a fraction of what an equivalent Snoqualmie Ridge house might have sold on the open market, said Tom Granger, executive director of Habitat's East King County affiliate.

Each of Habitat's Snoqualmie Ridge houses was sold as a condominium, with the low-income buyer owning only the house while Habitat held onto ownership of the land through a trust.

A land trust is similar to a long-term lease. It ensures that when a house is resold, its price will be lower than that of a comparable home. As a result, that house remains affordable for lower-income buyers who otherwise might be left out of the market.

While not yet the norm at Habitat, land-trust arrangements are becoming more common.

The future owner of the Central Area Tudor that Habitat is remodeling also is buying just the house. The land is held by the Homestead Community Land Trust, an arrangement that the property owner — the city of Seattle — insisted upon before selling the Tudor to Habitat for $1.

Nurri Omer is philosophical about owning only the dwelling.

"As long I live here, no one can take the land out from under me," he said. "It's like it's mine, for as long as I live here."

Omer and his wife, Ayalnesh Gesese, figure to pay about $150,000 for the 1920s-era two-level Tudor, which features antique flourishes and other amenities, such as a fireplace, not usually associated with Habitat houses. At five bedrooms and about 2,500 square feet, it also is bigger than a typical Habitat house.

"Whatever Habitat for Humanity was going to build for me, I was going to take it," said Omer, whose family includes four children. "I didn't care what kind of home it was."

Renovation costs for the Tudor have ended up higher than Habitat anticipated.

"Nothing about this place was normal," said Kathleen Croston, Habitat's site supervisor. "It had crazy old systems. All the plumbing, wiring and heating had to be redone. The stairs leading into the basement were not built to code so we had to figure out how to totally change the design."

As it turns out, a new single-family house could have been built there for less money.

Plot another point on Habitat's learning curve.

Stuart Eskenazi: 206-464-2293 or seskenazi@seattletimes.com