Housing,” Ian Ransley

“People believe they know what Habitat for Humanity is,” says Karen Haycox, CEO of Habitat for Humanity New York City (Habitat NYC), which has operated for 35 years and whose work now extends into nearby Westchester County. The strength of the Habitat for Humanity brand, Haycox, notes, is a “both a blessing and a challenge.” Founded in 1984 on the Lower East Side of Manhattan, just eight years after the international organization began, to date Habitat NYC has helped provide housing to over 1,800 families. Its annual revenues last year exceeded $9.6 million.

One thing everyone “knows” is that Habitat mobilizes volunteers and future homeowners, who employ sweat equity to build modest detached single-family homes. Haycox readily acknowledges that, “When you think of Habitat for Humanity, people can’t help but think of a single-family home with happy shiny volunteers raising walls. That’s the image we all get in our minds.” But how would you do that in a market where land is at a premium like New York City?

Well, while Habitat NYC does help build or renovate some single-family homes, by and large the answer is that you don’t. As Haycox observes, “We morph the model in the context where we get our boots dirty.” The beauty of the model, Haycox says, is its flexibility. As Chris Illum, Habitat NYC’s vice president of housing services, points out, every Habitat chapter is unique.

Last month, I spoke with Haycox, Illum, and Habitat NYC’s vice president of external affairs Matt Dunbar about the nonprofit’s evolution. Not every Habitat chapter has developed its own community development financial institution (CDFI) or joined a community land trust, but Habitat NYC has. The reasons are informative, as the organization has sought to pursue its mission of affordable housing amid a very complicated and expensive US housing market.

From “Housing Is Housing” to “Access, Equity, and Justice”

As Haycox explains, “The initial vision of Habitat was that any housing is good housing. Any opportunity is an opportunity. The ability to get a family in the home was really our initial focus. It was a very simple clear focus: Put a family in a home and allow them to accrue the wealth in that house over time.” In New York City, because of limited land, condo ownership was more common, but it was still a pretty traditional model.

Illum elaborates on what drove that to change: “It comes back to access, equity, and justice.” Building home ownership, he notes, is different in a world where land is plentiful and cheap than in a place like the Bronx, where a home that once sold for $100,000 now fetches $800,000. That equity gain is great for the family who gets in, but once it is sold, that house is no longer affordable. In that model, Habitat’s investment benefits one family once.

With a community land trust, or other forms of permanently or near-permanently affordable housing—like limited equity cooperatives, a form of housing in which a nonprofit co-op association holds the majority of the equity but individual member-owners build equity through their ownership of limited shares—any appreciation of equity value is shared between the homeowner and the nonprofit through a specified formula. This formula allows the family to build wealth but caps the equity gain. A common formula in a community land trust, for example, might specify that the family gets 25 percent of the equity gain, while the nonprofit keeps the remainder. Deed restrictions typically enforce this by specifying that on resale the buyer must income-qualify and abide by the same rules.

Dunbar refers to this approach as adopting a generational, or preservationist, mindset. As Dunbar puts it, the goal is to ensure multiple generations of households can be served with Habitat NYC’s limited investment, “so we are properly stewarding our donor dollars and our government-funded dollars and volunteers and sweat equity for the long term.” Central to this idea is the notion that a home is not just an investment for individual households to build wealth, but also “a community asset.”

That said, while community land trusts and limited equity cooperatives focus on building community wealth, individual families benefit too. As Dunbar explains, even though individual equity accumulation is restricted, it is still substantial. The limit