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Economy 'profoundly' affects ICCF
The poor economy has had a profound affect on the work the Inner City Christian Federation is trying to do, which is to reconstruct and newly construct homes for home ownership purposes, as well as provide affordable rental units and rental assistance.
In his 28 years as ICCF president and CEO, Jonathan Bradford said he has never seen the collection of circumstances that the ICCF is dealing with now.
First, the demand for houses and the ability to buy houses both are down and that affects the ICCF just as it does any other builder, he noted. Second, public sector contracting — the purchase of service contracts the ICCF has with city, county, state or federal government — are all over the map: Some are up and some are down, so it’s really unpredictable and that makes cash flow management really, really hard, Bradford said.
Third, the tightness in the credit market makes it difficult for the ICCF to finance anything it does, and credit is similarly tight for the rental housing and rental assistance help that the ICCF provides to about 500 families a year under a contract with the state, Bradford pointed out.
The fourth component is the charitable dollar — and that’s the one bright spot.
Approximately 32 percent of ICCF budget is supported by businesses, individuals, churches and foundations, about 45 percent is supported by purchase of service contracts, and the rest comes from revenue the ICCF collects from people who use its services, Bradford explained.
“Our charitable gifts have remained constant: We have not seen the decline that others have seen,” he said. “We are actually around 3 percent above where we were last year,” Bradford said. “We are grateful for the support and respectfully optimistic that it can continue at this level because the demands are huge.”
From its inception in 1974, ICCF has brought 490 affordable housing units to the Grand Rapids market, both single family homes and rental apartments. That’s just the real estate side of it: ICCF also does an extensive amount of housing counseling through its 11-member counseling staff, who Bradford says are particularly gifted at opening homeownership up to a vast array of families for whom it would otherwise be difficult. Counseling includes credit remediation, financial literacy training, and all kinds of home buying preparation, from home maintenance and family budgeting. The staff counsels not only people who move into ICCF housing but also for a host of other agencies.
“Perhaps one of the most profound observations about the impact the economy and the general housing crisis is having on us right now is this: Our housing counseling staff are doing almost no homeownership preparation. The collective capacity of our counseling department has been ‘hijacked’ and is now almost completely committed to foreclosure prevention,” Bradford said.
During the last fiscal year we served 541 families with foreclosure prevention. This year, the projection is that, for the balance of the year, ICCF counselors will surpass the 760 mark, Bradford added. ICCF counselors serve as an informed advocate for a family and as the intermediary with a family’s bank to negotiate a loan modification, Bradford explained.
“We’re successful in about 70 percent of the cases, and in the other 30 percent of cases we help the family ease out of the house with as little impact on their credit report as possible,” he explained.
Bradford said the ICCF typically builds or reconstructs 12 to 15 homes per year, but the last two to three years it’s been closer to 10 or 11. He anticipates the ICCF will build seven this year.
ICCF also operates Family Haven, an emergency shelter consisting of five efficiency apartments that can accommodate homeless families free of charge for up to 30 days. Bradford said that since Family Haven opened in April 1990, it has provided 1,825 shelter nights per year. Only two shelter nights have been vacant in Family Haven’s 19 years, he noted.
“Emergency shelter is a critical challenge right now, and because of this whole housing meltdown, it’s a bigger issue now than ever before,” Bradford added.
Pam Doty-Nation, executive director of Habitat for Humanity of Kent County, said the poor economy hasn’t affected Habitat very much, the reason being that Habitat serves people in slightly lower income categories — families who make 30 to 50 percent of the area median income, or approximately $18,500 to $31,050 per year based on income guidelines for a family of four. Prior to building a home, Habitat finds a homeowner and raises the money to build them a home.
Doty-Nation said Habitat also has some built-in ways to help sustain it, such as its ReStore and the mortgagee payments that Habitat collects on 200 mortgages it holds on houses it has built in the past. ReStore sells gently used home improvement materials, fixtures, appliances and furniture to the general public at prices 50 to 70 percent below average retail costs.
Doty-Notion said Habitat really hasn’t seen much change in its donations and is still trying to build at least 20 houses a year. Habitat hasn’t had to cut back on the number of homes it builds, but it is changing its focus next year from building new homes to rehabbing existing homes. Bradford said ICCF is also planning to concentrate more on rehabbing vacant foreclosed homes.
“There are so many foreclosed homes that it doesn’t make sense for us to put a lot of new homes up if we can get ahold of some of these foreclosed homes and then work in partnership with the city and county to rehab some of them.
“Because of stimulus money that’s coming down, there are going to be some extra funds available to do rehabs. We’ll probably take advantage of the stimulus money in order to help preserve neighborhoods.”
Of the 1,700 national affiliates, Habitat for Humanity of Kent County has the distinction of having built the first LEED-certified affordable home in the nation. In 2007, the local affiliate committed to building all future Habitat homes to LEED certifications.