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Self-Help Builder News December 2012 Volume 5, Issue #4 >
A tale of three rehabs
By Harold Branch, RCAC rural development specialist
Three different organizations share one common theme – customers love their housing rehabilitation programs.
Self-help grantees throughout the country are considering housing rehabilitation more closely. This is especially evident in Arizona, where three self-help grantees operate self-help housing rehabilitation activities. Two of these self-help grantees are municipalities, and one is a nonprofit organization. An examination of each of these grantees highlights their activities, successes and challenges.
Town of Guadalupe
The Town of Guadalupe is primarily a Native American (Yaqui) and Hispanic community of about 5,500 residents. Located between Phoenix and Tempe in Maricopa County, Guadalupe is approximately one square mile in size. Founded by Yaqui Indians around the turn of the 20thcentury, the town proudly maintains a strong cultural and ethnic identity. It is named after the Virgin of Guadalupe, the patron saint of Mexico.
Seniors head a majority of the families that participate (65%) in the town’s self-help rehab program.
The Town of Guadalupe incorporated in 1975 and has been involved in some form of owner-occupied housing rehab activities since inception, with the majority of rehab activities taking place between the 1990s and 2003. However, it was not until recently that the town added rehab activities into its existing traditional self-help housing program. In 2009, the town met with USDA Rural Development officials and RCAC staff to explore the possibility of modifying its existing 523 grant to reduce the number of new self-help homes to be built, and also to include owner-occupied self-help housing rehab activities. The impetus for this request was the overall housing market decline, resulting in lower home appraisal values; making it difficult for self-help families to continue building new homes that would qualify for USDA Rural Development 502 loans (the appraisals being too low). USDA Rural Development officials approved the town’s request, and owner-occupied self-help rehab activities began in early 2010. Currently, the town’s 523 grant calls for assisting five families to construct traditional single family self-help homes, and 16 homeowners to rehab their homes using the self-help model. The technical assistance cost under the town’s 523 grant for its self-help rehabilitation activities is $9,895 per home.
Town of Guadalupe home before rehab
To date, 17 homes have been successfully rehabilitated using the self-help model. Although the families are not required to provide 65 percent of the needed labor, the town requires that they spend a minimum of 32 hours per week assisting in the rehab effort. Typical family duties include, but are not limited to, demolition assistance, insulation placement, sheet rock hanging, minor plumbing, painting, cabinet setting, floor preparation, floor tile installation and some roofing activities.
Seniors head a majority of the families that participate (65%) in the town’s self-help rehab program. Although these seniors are usually more willing than non-seniors to provide labor, they are often physically limited in carrying out their needed labor tasks. In these cases, other family members, volunteers and friends are allowed to provide labor. Additionally, the town has merged its’ YouthBuild USA program with its self-help rehab program. This merger currently allows a group of 12 young adults, ages 17 to 19, to assist the elderly and other families that need help in carrying out their labor responsibilities.
Town of Guadelupe home after rehab
Eligible homes must be at least 15 years old. As a result of this requirement and deferred maintenance issues, most homes in the program have been in need of major rehab. The rehab construction cost has averaged $33,000 – $35,000. The average number of participant labor hours per house is 300 – 500 hours. Funds to cover the construction cost of the town’s self-help rehab program comes totally from current U.S. Department of Housing and Urban Development (HUD) HOME funding and previous HUD HOME funding program income. The participant labor hours are used to satisfy the town’s HUD HOME matching funds requirement — $10 per participant labor hour is attributed toward this match. All HUD HOME funds used for rehab construction are provided to the families in the form of a recorded, forgivable loan, based on affordability periods consistent with HUD policies. Having HUD HOME funding for housing rehab activities is ideal, but having HUD HOME funding as the only construction cost source does cause the town some concern. The town is working toward bringing in additional funding to diversify its construction funding base.
The town also uses its self-help rehab program as a neighborhood beautification tool. As part of the rehab effort, homeowners are required to paint their homes, both inside and outside. Additionally, every home must have an initial property clean-up prior to the bidding process to rehab the house. If the initial clean-up is not completed within a three week period, the house is placed back on the self-help rehab waiting list and the program moves on to the next eligible participant. This initial clean-up includes removal of junk cars, litter, trash or any outside sheds that are in violation of the town’s building codes.
When asked what are the major challenges facing its self-help rehab program, town staff noted that temporary relocation housing during the rehab process has been necessary. Unfortunately, the town only has two temporary housing units available, which prevents the town’s program from undertaking more than two major rehab projects at any one time. The other challenge cited by town staff is the need to add more diversity to their rehab construction funding base.
Town staff said that the key to the program’s success is the trust in the community. In a small town like Guadalupe, people know each other, and the self-help participating families trust the town’s housing staff. The participating family’s involvement in the rehab construction also was cited as an important ingredient for its success, as well as the support of USDA Rural Development officials. Finally, town staff simply stated that they know what they have to do to help their families and they just get it done.
Whatever the recipe for success, the Town of Guadalupe’s self-help owner-occupied rehab program is certainly on the right track.
Campesinos Sin Fronteras
Campesinos Sin Fronteras (CSF) is a 501(C)3 nonprofit, grassroots organization serving migrant and seasonal farm workers and other members of low-income Hispanic communities in Yuma County (with a focus in the south Yuma County area). CSF staff members come from farm worker backgrounds, enabling them to understand and be sensitive to, the disadvantaged situations of the residents they serve. Since its inception in 1999, the organization has grown from a two-person movement to an agency that employs more than 30 dedicated individuals and many community volunteers. In addition to being the pioneer of the “Promotora” model in Arizona, CSF has offered programs in behavioral health, medical care, chronic disease prevention, education, housing counseling and, of course, self-help housing rehab.
CSF has consistently met or exceeded the self-help rehab goals in its USDA Rural Development 523 grant agreements.
CSF is the oldest self-help housing rehab program in Arizona; currently in its sixth USDA Rural Development 523 grant cycle (spanning 12-years). Unlike the other two Arizona self-help rehab grantees, CSF’s program model has been exclusively self-help rehab from the beginning. More than 300 homes have been successfully rehabilitated under this program. Even with the high number of homes already rehabilitated, the need for CSF’s self-help rehab program in the community continues to be overwhelming. The current wait list for this program includes 124 families. CSF staff members said that residents need a lot of maintenance education (which CSF now provides to each family it serves with RCAC counseling funding). CSF staff also stated that, due to the high level of poverty that exists in the community, the homes families can afford to buy are very often houses already in need of repair (homes assisted in the CSF rehab program are on average more than 20 years old). Additionally, families in the community often build their own home additions to address overcrowding situations that are poorly constructed, and add to the need for future rehab services.
CSF has consistently met or exceeded the self-help rehab goals in its USDA Rural Development 523 grant agreements. Currently, CSF’s grant calls for assisting 44 homeowners to rehab their homes. The technical assistance cost under CSF’s grant is $7,500 per home. Historically, 95 percent of the families assisted through the CSF self-help rehab program fall in the very low- income category. Similar to the Guadalupe program, the majority (70%) of homeowners CSF assists are elderly. For this population, the self-help rehab program is the only option available to address their home rehabilitation needs.
CSF’s program does not require families to contribute a specific minimum amount of hours per week in their rehab efforts. However, CSF staff members are quick to add that their families are more than happy to pitch in and help as much as possible. The family signs a participant labor agreement (as does the other Arizona self-help rehab programs), spelling out their tasks to complete. The usual CSF participant labor hours on a given rehab project range from 120 – 180 hours, but have also been as high as 380 hours. Extended family members provide labor as needed (especially to the elderly).
Family labor tasks, as with all self-help rehab projects, vary from house to house. Normally, CSF family labor tasks have included cleaning before and after rehab activities, painting, moving furniture and cabinets, removing old roof shingles, and removing old tiles in bathroom showers. CSF, similar to the Guadalupe program, ascribes a $10 per hour value to the family member’s labor participation. However, both CSF and Guadalupe realize that the actual value of the labor participation exceeds this $10 figure. Both CSF and Guadalupe are exploring processes and methods to calculate labor participation task based on industry standards.
The rehab construction cost per home has typically ranged from $12,500 – $40,000. Funding to cover construction costs has come from a variety of sources including HUD HOME, State of Arizona Housing Trust Funds, HUD Community Development Block Grant (CDBG), USDA Rural Development Housing Preservation (HPG), and USDA Rural Development 306c and 504 loans and grants. Part of the CSF program success has been the ability to diversify its rehab construction funding. Recorded, forgivable loans with appropriate affordability and occupancy periods are used to secure the rehab construction funds used.
As major challenges facing its self-help rehab program, CSF staff cited lack of funding to address all the needs in the community. CSF staff also stated that when they have had to rely on USDA Rural Development 306c or 504 funding alone, the maximum amount of funding investment per home often does not correct all the desired items; leaving the families better off than before but not totally happy. Unlike the Guadalupe program, CSF has no need to provide temporary housing during rehab construction—there has only been one case where a family moved out during rehab construction (staying at their daughter’s home). The families CSF serves usually find a way to stay during the rehab construction period.
When asked the secret to its program’s success, CSF staff stated that they love what they do. As a result of this motivation, CSF staff says that prompt service to families is important to them. CSF staff members also acknowledge that they have a good team and the support of USDA Rural Development officials. Finally, CSF acknowledged that the people in the community are very grateful for the services provided and, as a result, CSF has a good reputation in the community, which is spread primarily through word of mouth.
CSF’s reputation is well deserved. After completing more than 300 successful self-help rehab homes, there is no indication that CSF’s rehab activities will slow down any time in the near future.
City of Casa Grande
The City of Casa Grande is half way between Phoenix and Tucson, in Pinal County. Founded in 1879 and incorporated in 1915, Casa Grande now takes in 110 square miles. Casa Grande’s culturally diverse population has nearly doubled in size during the past 10 years.
Like its municipal counterpart (Guadalupe), the City of Casa Grande had a long history of providing owner-occupied housing rehabilitation activities, but on a much larger scale. Casa Grande’s (non self-help) owner occupied rehab program began 31 years ago and has rehabilitated 563 homes. During much of this same time, Casa Grande operated a successful traditional USDA self-help program and has assisted 389 families build new, self-help housing units.
Much like Guadalupe, Casa Grande also became the victim of the depressed housing market and dwindling appraisals. During 2008 – 2009, appraisals for new self-help housing units were approximately 25 percent less than the contract price to construct the new home. Additionally, the large number of vacant newly constructed homes in Casa Grande’s housing market, plus the large number of lender owned vacant homes made it difficult to sell the idea to families that they should commit to building their own self-help home during a 10 – 12 month period. As a result, Casa Grande began talks with USDA Rural Development and RCAC to reduce the number of proposed new self-help homes and add owner occupied self-help housing rehab activities to its USDA Rural Development 523 grant. At the same time, there were discussions that would allow for a self-help model of acquisition, rehab and resale activities. Although Rural Development approved the acquisition, rehab and resale concept this model was quickly abandoned as a result of timing and appraisal issues that surfaced. However, the addition of owner-occupied self-help housing rehab activities was approved and has proved to be successful.
City of Casa Grande home before rehab
Casa Grande’s current USDA Rural Development grant calls for assisting six families to construct traditional single-family self-help homes, and assisting 50 families to rehabilitate their homes using the self-help model. Casa Grande’s self-help rehab technical assistance cost under its current grant is $8,500 per unit. Having one of the most successful housing rehab programs in Arizona already in place, Casa Grande’s transition to self-help housing rehab activities was a relatively smooth process.
Casa Grande’s current 523 grant will expire at the end of March 2013. Already, the organization has completed 43 self-help rehab projects. The majority of the households fall under 50 percent of the area median income. Participating homeowners include the elderly, disabled individuals and families with children. The average age of the homes in Casa Grande’s self-help rehab program is 20 – 25 years. The normal rehab activity would be classified as a major rehab, although the program also will conduct emergency repairs as necessary. The standard range of rehab construction cost is from $18,000 – $60,000. Typical Casa Grande family labor includes cleaning up junk (also mandated by the program), painting, landscaping, demolition tasks, trimming trees and removing any obstacles that would impede the rehab process.
City of Casa Grande home after rehab
Participating families are not required to provide 65 percent of the needed labor but are required to participate as much as possible. Like the other self-help rehab programs, labor contribution commitments are captured in the labor commitment document and the hours that family members spend carrying out their labor tasks are also captured and documented. The average number of participant labor hours per house has ranged from 80 – 300 hours. Unlike CSF or Guadalupe, Casa Grande does not ascribe a $10 per hour value to family member’s labor participation. Instead, Casa Grande staff members determine what the industry value is of the specific tasks that family members complete. To accomplish this, staff estimates and a computer software program (Home Developer Pro) are used. Also, Casa Grande staff members touch bases with their industry contacts every three months to ensure that the value estimates being used are realistic. Casa Grande staff members go the extra mile to determine the value of the family’s labor, which presents a more accurate picture of construction savings using the self-help rehab model.
Like CSF, funding to cover the construction cost of Casa Grande’s self-help rehab program has come from a variety of sources; HUD HOME, HUD CDBG, State of Arizona Housing Trust Funds, previous HUD HOME and CDBG program income, USDA Rural Development Housing Preservation Grant, and USDA Rural Development 504 grants. In addition, the City of Casa Grande rebates back to the program any building permit fees originating from self-help rehab activities — a pretty neat way for local government to support affordable housing activities.
Casa Grande staff noted that some homeowners (disabled individuals, in particular) want to participate in the labor contribution but need other family members to help, which at times presents a coordination issue. Ensuring that families complete their labor contribution task and turn in timesheets was also mentioned as challenging.
When asked the secret to its program’s success, Casa Grande staff point to the participating families’ ownership of each project, stating that when families provide sweat equity it makes them feel good. Staff also pointed out that the program has encouraged pride of neighborhoods. Neighbors begin fixing up their homes once they see a self-help rehab on the block taking place. In this respect, Casa Grande’s self-help rehab program serves also as a tool for neighborhood revitalization.
Ironically, with all the success that the Casa Grande program is enjoying, its self-help rehab program will lose its USDA Rural Development 523 grant funding at the end of its current grant. Casa Grande’s population (currently in excess of 48,000) exploded between the years 2000 and 2010 and will no longer be eligible for USDA Rural Development funding. Without 523 funding, continuing a self-help rehab model in Casa Grande will be a challenge. However, the demand for the program remains high; currently 43 homes are on the programs wait list. Given the demand for the program and the commitment of the Casa Grande staff members, bets are that owner-occupied housing rehab efforts, either traditional or the self-help model, will remain a part of the Casa Grande landscape.
For more information on these three successful self-help rehab program, contact:
Town of Guadalupe
Nancy Holguin, Housing Coordinator (480) 505-5363
Jay Vermilion, Construction Supervisor (480) 682-8014
Campesinos Sin Fronteras
Emma Torres, Executive Director (928) 722-5735
Nancy Ramirez, Housing Program Manager (928) 627-5995
City of Casa Grande
Leila Demaree, Housing Manager (520) 421-8670
Rose Roy, Rehab Specialist (520) 421-8670
Harold Branch, RCAC, can be reached at hbranch@rcac.orgor (623) 393-0687