Gearing Up For More Change

“Whatever you did for one of the least brothers of mine, you did for me” (Matt 25:40)

Dear Supporters,

Not many would disagree that the first decade of the 21st century can be described as one of abnormal turbulence. It has come in the form of natural disasters, economic crisis, wars, and political strife and has affected us all in one form or another. Coupled with advancing technology we have experienced an unprecedented rate of change.

Every day we read or hear about “change” and how it has become a way of life in every organization that is striving to survive and grow. With all the “change” you have witnessed we wanted to share with you how it has impacted our homeowners, operations and facilities and how we are transforming our organization while remaining more faithful than ever to our mission. The Habitat you see today and will hopefully witness tomorrow will be different and the purpose of this brochure is to explain how and why.

Todd HeckmanChairman

Ten years ago Habitat for Humanity (HFH) was gaining recognition domestically and had made

serious penetration overseas in our mission to obtain affordable housing for the poor. HFH had completed 100,000 homes and our prospects for steady growth were certainly promising. Then a series of events blistered our landscape: Hurricane “Mitch” laid sections of Central America to waste, the Tsunami demolished the Asian coastline, and Katrina hammered the gulf region.

Not having a standard operating model that dealt with such catastrophes, our initial response was that we were not an emergency response organization (such as the Red Cross). Our supporters, the media, government leaders and the general public, not understanding our mission, were expecting more from us. The inevitable end result was change.

Habitat did not discard its core mission, but it was certainly redefined. Every calamity increased Habitat’s depth of knowledge and sense of purpose. Today we can candidly say that we have a wider mission and can be viewed as an organization that can be counted on in a natural disaster. We have proven this by aiding 23,000 families along the “tsunami” impacted coastline. Today, Habitat is the largest homebuilder in Louisiana and Mississippi and has erected 2,000 houses since Katrina. We have shipped 26,000 emergency shelter kits into Haiti and we are committed to building shelter for 50,000 families in Haiti over the next 5 years.

A remarkable objective when you consider we have had a presence in Haiti for 26 years

during which time we built only 1,000 homes. Habitat personnel and resources currently have a strong presence in northern China and Chile where earthquakes have made thousands homeless.

Reacting to natural disasters is important, but fundamentally Habitat has also faced the realization that shelter, although the key element, is not sufficient to enable families to overcome the effect of natural disaster or free them from the shackles of poverty.

Our initiatives are now broader than providing a tent or building a simple house. They encompass emergency shelters, community planning, infrastructure, training, scholastic assistance, sanitation, health programs and of course homebuilding. No, we are not capable of mounting such all-encompassing efforts by ourselves, but we are using our brand, size and leverage to form partnerships with governments and other organizations that can bring more resources to bear in areas of need.

Habitat for Humanity International has made necessary course adjustments and at this moment we can proudly say we have served 350,000 families throughout the world and our goal is to help 100,000 families annually by 2014.

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Gearing Up For More Change Globally

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External forces have also forced Habitat’s hand locally. Going back on our relatively short history Indian River Habitat for Humanity (IRHFH) was initially created to bring awareness to the large population of sub-standard dwellings that existed in our community, where more than 800 families live in deplorable conditions and another estimated 1,430 families live in overcrowded dwellings.

With only minimal resources we sought to create an example as to how we could assist poor working people obtain affordable houses. Gradually we grew from building one house a year, to four and then up to ten.

As the understanding of Habitat’s mission grew volunteers, supporters, local government and the community’s expectations of our organization increased and fortunately so did our resources. Our growth took us from just being a good example to an implementing organization. In a relatively short time span we grew from an all volunteer organization with limited capabilities to one staffed with employees that could take us to a higher level of house production.

As the decade progressed we faced obstacles which impeded our progress. It came first in the form of a construction boom that put land prices out of reach for Habitat housing. Needing the economies of scale we concentrated all our resources in the construction of sub-divisions. Many questioned our experience in managing developments of such size.

Then back to back hurricanes struck our community making hundreds of homes in our community uninhabitable. Fortunately for us, all Habitat built homes endured the elements with very little impact. But, the number of sub-standard homes in Indian River County increased. In seeming contradiction as affordable housing languished, speculative home construction and development persisted.

Indian River Habitat for Humanity

All photos taken in July, 2010 of substandard houses on one

street in SE Gifford.

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Real estate values continued to escalate and in tandem so did property taxes. The financial impact of the hurricanes was also reflected in soaring insurance premiums and stricter codes. Surcharges in electrical rates added to cost of living.

Finally the housing bubble burst and our community was among the national leaders in the decline of real estate values. With construction grinding to a halt the market eroded further and eventually resulted in a recession that took unemployment to 15% in our county. A flood of foreclosures ensued, a large number resulting from excessive speculation, but also many due to the recession and unemployment.

Most concerning to us was the effect on our homeowners as they dealt with lost jobs, cutbacks in work hours, raising children with declining disposable income and dealing with the responsibility of maintaining a home. The dramatic increase in gas prices a year ago for many became the straw that broke the camel’s back.

Choices were being made daily between paying for food, transportation or electricity. In the past we completed a house, turned over the keys to the new homeowner and relied on our warranty to take care of any problems. In our training classes we had prepared the homeowners for a lot of eventualities, but not to this degree.

Although we could document many success stories, we still faced an unacceptable number of families who could not meet the challenge of home ownership. The evidence came in abnormal resignations in the sweat equity phase where prospective homeowners put in jobsite hours to qualify for a house. But, we saw it also in mortgage delinquencies, deed-in-lieu’s and in a few cases, foreclosures. We too had to face the reality that our program was in need of revitalization to meet today’s challenges and ensure that every homeowner became a success story.

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Indian River Habitat Today

As we celebrate our 20th anniversary we can look back and see that our growing pains have made us a sound organization and

that is evidenced by our receiving “Habitat Affiliate of the Year” three times in the last five years. But, we know that there are things we can do better and will need to if we are to meet the expectations of our donors, volunteers and the community at large.

Our initiatives today are diverse, yet we do not stray from our fundamental role of helping to provide decent housing as a means

to fighting poverty. We have established an average running rate of 30 homes a year which compares favorably to the production of larger Habitat affiliates in Florida that have larger populations. Our activities continue to provide housing opportunities in every section of the county to accommodate the needs of homeowners. Depending on the location and economics we build sub-divisions, small neighborhoods or stand-alone dwellings. Nor are we restricted by stick or block construction, as we will employ the building methods that result in the most favorable insurance rates and economical maintenance scenarios for our homeowners.

With an average of 30 homes annually we would make a substantial impact on the low income

housing picture in our community. However, sensing that grants and contributions by themselves could not financially sustain our ambitions we speculated on the construction of a home center, whose revenue could supplement our financial resources. Today that business has reached $1,000,000 in annual sales, employs 12 people and funds the construction of eight homes annually.

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Foreclosures

We have been taking advantage of the availability of foreclosed homes that can be obtained on favorable terms. This year alone we purchased, refurbished and sold ten such houses. Some have needed little work (such as the one pictured on the right), but others were true rehabs that needed to be completely gutted.

Neighborhood Revitalization Initiative

Some of the housing in our community is for the better part structurally sound, but needs serious attention. IRHFH has been selected by Habitat International to participate in the “Neighborhood Revitalization Initiative,” a pilot program whereby we will assist 20 additional families this year in re-habilitating their homes to bring them up to community standard. The families selected are usually low income homeowners who for the most part are poor, elderly or disabled. We use donated materials and different volunteer groups from the community for this effort.

Tithing

Despite our numerous commitments locally we have been able to fulfill our tithe obligation to support the Habitat mission in underdeveloped countries. Our donations have helped build houses in Romania, Dominican Republic, Cote d’Ivoire, Madagascar, Chile and Haiti. Today we are funneling donations from non traditional sources in the county to our parent’s Haiti initiative.

The Habitat ProcessThe core of the Habitat program is to provide a decent affordable home to a working family. The process today is defined as engaging homeowner families that not only qualify, but have a sincere desire to improve their situation in life. It’s more than the house! We build houses that are economical to maintain to ease their financial burden. We sell the house with a no-interest mortgage to the homeowner who already has invested hours of

“sweat equity” in the house. Habitat increases the level of support to the families until they are in a position to sustain the ownership of their home. We train our staff to be a conduit for homeowner opportunities, be they career, day-today living or scholastic. Our staff manages homeowner associations until homeowner leadership and experience is evident. And, most of all we are pro-active in providing support whenever adversity strikes.

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Habitat Home Ownership

The Typical Prospective Homeowner

Most are single parents, primarily women.

They have limited education and work for low wages.

They have no financial expertise; some have never written a check.

They are renters; typically their families have never owned a home.

Budgeting or saving for a rainy day is completely foreign to virtually all.

Planning for their children’s future is usually

unheard of.

They have no knowledge of basic home maintenance.

Many do not know how to avail themselves of all the assistance that is available to them in the community.

Most feel they have no choice but to let their children fend for themselves when they are not in school.

Deep down, they have no hope for a better life for themselves or their children.

They are hardworking people who have jobs and are not looking for a handout.

But, as the “working poor” they have a fragile existence and limitations that impede their success as homeowners.

Our experience over the years has clearly demonstrated that we need to accept the above realities and be prepared to address them; otherwise, we can anticipate failed homeowner relationships, foreclosures and turmoil in our communities.

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Homeowner Sustainability - What does it entail?

It sustains that effort with scholarship applications and to some extent with scholarship support.

More training in the various aspects of homeownership is critical. From financial planning to home maintenance to perils of solicitations by predatory lenders, they need to be better equipped to face the challenges of homeownership.

It also involves the development of their homeowner associations and providing guidance to these organizations so that the appearance and security of their communities can be maintained and enhanced. This not only helps create a healthy environment to raise a family, but has a favorable impact on property values for themselves and their neighbors. Last, but certainly not least, is communicating and giving moral support. Be it providing vital information via the “Homeowners News,” giving job site support to applicants or being a “Family Support Partner.” Nothing is more important than knowing you have a friend in your corner who wants you to succeed.

It means investing in the time and the necessary resources to train and counsel homeowners until we reach the point where they are self-sustaining and we can cut the cord. By necessity it means rendering assistance when unprovoked misfortune occurs. If they are temporarily struck with adversity, be it unemployment, cutbacks in working hours, food, electric bills, etc. we are prepared to render temporary assistance to keep them whole and/or direct them to community resources that can help them.

In the case of unemployment it means getting involved and providing assistance by posting job listings, helping with resume preparation and interview coaching. It may mean drawing on our food pantry which we created last year to meet this crisis.

It means providing educational opportunities for their children in order to break the cycle of generational Habitat homeownership. This can only be accomplished by giving their children a vision of a better life through education.

It begins with facilitating and underwriting after-school and summer care. It progresses by providing a vision of a college education.

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What will we need to do to accomplish our goals?

Implementing a defined program of “Sustainable Homeownership” cannot be accomplished without investing in additional resources. We already have added a position to coordinate homeowner needs after they take possession of their home. Beyond that addition we are adequately staffed at the present time with a combination of full time employees, part-timers and AmeriCorps volunteers. The volunteers that staff our “Family Selection” and “Family Support” committees are also key players in this initiative.

Our major weakness lies in our facilities which are no longer adequate for carrying out our mission. Currently administrative, homeowner assistance and training are operating in the five trailers located on our US Hwy 1 property. These refurbished modular units which we leased six years ago have since survived three hurricanes, but have served us well. Unfortunately, despite the efforts of our construction supervisors they are reaching the end of their life cycle. Their deficiencies are evidenced in sagging floors, patched roofs, poor ventilation and insufficient insulation.

Further repairs would not address the issue of additional space needed for training. Nor would it improve the poor energy efficiency of these trailers.To meet the needs of our program for the next decade and beyond we need to build a dual purpose facility: An Office and a Training Center. The office part is self explanatory as it will house the existing staff, consolidating those employees that are presently housed in the trailer that is adjoining the four that are interlocked.

The second part is the “Training Center” that is key to our program for the future. Habitat families are now given 11 classes to help them become homeowners. Not so long ago only six classes were given. In hindsight even 11 is not adequate to prepare these families for such a big responsibility as being a homeowner.

Handing over the keys, “cutting the cake,” offering congratulations and fielding phone calls during the one-year warranty period is far removed from the support these families really need.

Current Office Facility

Training Class Fall 2009

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We need a facility that maximizes utilization by providing meeting rooms during the day and serving as classroom, Home Owner’s Association meeting space and counseling offices in the evening.

Another major consideration is security. In our present trailers our receptionist cannot restrict access to offices by visitors and their children. Our auxiliary trailer must be kept locked for safety reasons. We are ever cognizant of the fact that we only have 10% of our visiting applicants that qualify for our program and the balance are strangers that we know little about.

Additionally nearly all our homeowners come and pay their mortgage at the office. It’s not required, but it’s their practice which generates a lot of traffic.

The last issue is not having secure record storage capability, which is of major concern as we presently manage almost 250 mortgages and that number increases by approximately 30 every year.

By law we are required to keep sensitive records on our homeowners in addition to the hundreds who have applied and been rejected or resigned for one reason or another.

We have learned that they cannot break the cycle of poverty by just getting a house. The majority have been brought up in dire circumstances and unless their life patterns are altered, that will continue to be their destiny. And, it is not likely their offspring will be different. Greater depth of training and support is what is required as are accommodations to house such activities.

Beyond the needs for an expanded classroom schedule, space is needed for private conferences on job searches, resume writing, computer access, writing wills (a service which our volunteer attorneys provide) etc.

Current Record Storage in HallwaysTop: Receptionist Viola Field with Home Owner, Bottom: Happy New Home Buyer

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Our aim is to build a facility using as much of our human resources as possible and making sure that it can be accomplished without adversely impacting our construction program. That means using the time and talent of our supervisors and volunteers to do as much of the work as we can and minimizing the utilization of outside labor as much as possible. The biggest challenge will be funding for professional services (architects, infrastructure, HVAC etc.) and for materials which we will purchase from local suppliers.

We are planning a most functional layout that will provide for offices, meeting space and storage in a secure environment. The adjoining rendering provides a good overview of our intentions in space utilization. We are fortunate that several years ago our board of directors had the foresight to acquire more land then needed when they purchased our US Hwy #1 property. So, we are planning to locate this new building immediately to the east of our present offices. Eventually when the facility is completed the trailers would be returned and the available space landscaped or possibly turned into a community garden.

What can we do ourselves?

We have already obtained design input from a local architect. Site clearance, engineering and concrete work would be done with existing suppliers to Habitat. Once the walls are erected our staff and volunteers can do a great deal to finish off the building. Areas that we do not usually address such as HVAC would again be handled by current vendors. All contracted work would be done by local labor as is our practice with our home construction. We feel the present time is appropriate as the organization and its program are stable. IRHFH is current in all its obligations and our immediate infrastructure costs for development are reserved. We have approximately 370 building lots in our “Land Bank” which can cover our needs for the next 10-12 years. Most importantly, we are free of long term debt.

We will have some restrictions on scheduling due to the participation of staff and volunteers in the project while keeping home construction on schedule. However, we feel that occupancy in late 2011 is a realistic timetable. Obviously the funding for this project will have some bearing on the completion date.

Indian River Habitat for Humanity

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Office and Training Center

Rendered Floor Plan

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How will we finance the Office and Training Center?

This project is currently estimated at $1,000,000, which takes into consideration Habitat labor. We therefore propose to fund the OTC through five means:

The first is “Deconstruction.” After experimenting for a year our home center team has formally identified home deconstruction as an opportunity to generate revenue. Major renovation and remodeling is taking place continuously in our community. The opportunity lies in getting the attention of the homeowner and/or contractor and volunteering to be involved in the removal of building components (doors, windows, cabinets, sinks, commodes etc.). The process translates into less work for the contractor, fewer dumping fees and a charitable tax deduction for the homeowner. Habitat then can sell these items to the public at the home center. We estimate that this can generate $100,000 in revenue in the first year.

The second part will be funded through a bequest. We have been blessed that IRHFH has received an inheritance of which $250,000 can be earmarked for the improvement of our facilities. Besides the immediate benefit that we will realize from this generous donation from the Cary estate, hopefully it will also serve as an example to others to remember Habitat in their estate planning.

Our research indicates that we have reasonable chance to secure grant money for this purpose and accordingly have made several applications.

The fourth is the estimated value of our in-house labor that was described on the previous page.

Finally we must resort to donations, and do so without adversely impacting our major endeavors. We realize that raising capital funds at this time is less than an ideal situation. However we view this project to be of paramount importance to the success of our mission. While $250,000 in donations is a substantial amount of money it represents 25% of the total cost if you quantify the value of our volunteer labor.

Indian River Habitat for HumanityOffice & Training Center

Construction Funding

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Dear Friends,

We hope that this brochure presented you with a good perspective of the role Habitat International plays globally and likewise, provided visibility into the direction IRHFH has taken to address sub-standard housing locally. If we have been successful in the past, it is only as a result of your generous contributions as donors and volunteers.

Hopefully our past performance merits your continued confidence in supporting our future initiatives. The “Office & Training Center” is essential and will make a major difference in our ability to help build the lives of those in need.

To complete this project, we are appealing to individuals who have a strong interest in seeing IRHFH broaden its mission to assist additional families. Naming opportunities for this project are available for contributors who wish to be remembered or as a lasting memorial for a loved one. Please contact Peggy Gibbs at 772-562-9860 ext. 209 for a full listing of available opportunities.

Donations of all sizes are welcome and may be made in the form of a pledge, cash, or a gift of stock. Please make checks payable to “Indian River Habitat for Humanity OTC.” To arrange a gift of stock or to make a gift using your credit card, please contact Peggy Gibbs at the number above. IRHFH is a 501(c)(3) non-profit organization. Your contribution is tax-deductible to the full extent allowed by law.

Should you have further questions regarding this project, please contact me at 772-562-9860 ext. 208 or ask any member of our Board of Directors or Board Advisors. Any of us will be more than happy to fully answer your questions.

As always, we value your friendship and know that the success of our mission is in your hands. Thank you for your thoughtful consideration of this request.

Sincerely yours,

Andrew R. Bowler

Thank You