At the Monterey County Luncheon on June 14th at Tarpys, guests were asked to write questions down on index cards at their tables. We unfortunately ran out of time to answer all the burning questions that day. So, we asked Satish Rishi, Habitat CEO, to take a moment to answer them here.
1. What legislation helps? Are there any funds from the state/federal government since housing is a crisis need?
There are many different programs from the State that fund affordable housing. However, almost all of them are focused on housing built for rental units, and not for ownership. At Habitat, we believe that homeownership provides stability, safety, a sense of security and an engagement in community. Habitat has been advocating, at the State level, for additional funds to be allocated towards homes for ownership.
2. What is the maximum income to qualify?
Our program is for families who are low income, defined as families whose AMI (Area Median Income) is below 80% AMI. For a family of four, that would translate to an annual income of $$132,100 in Santa Cruz County and $96,350 in Monterey County, respectively.
3. How many people are on the list to get a home? What is the waiting period to get a home?
We open applications when we have a home that is ready to be built, or becomes available. We do not maintain a waiting list. When we have opened the application period, we’ve had as few as ten applicants to as many as sixty applicants, per home, who complete the pre-application. If their pre-application shows them to be eligible, we invite them to complete a full application.
4. Marty Cavanaugh mentioned HfH’s ability to cut through red tape. What are the most challenging local complaints - governmental or otherwise - that slow or prevent Habitat projects from reaching completion?
It's the whole process that encompasses building. There are many parties involved in the approval or installation process, be it obtaining permits, seeking clearances or variances, or services from PG&E. We may wish to believe that we are a priority, because we are trying to solve a social issue, but in truth, we are treated just like all others, in the queue awaiting our turn. I don’t see many local government bodies seeking feedback on their performance, Net Promoter Service (NPS) or other customer service metrics, but if they did, they might be able to identify bottlenecks and improve their customer experience.
5. What are the financial arrangements when a homeowner allows an ADU to be built on their land? Rent? Financing for elderly retired homeowners? Tenants in common?
To build an ADU, under our current program, we ask that the homeowner put down around 20% of the estimated cost of building the ADU. Since we want to encourage the homeowner to rent the unit to a low income person/family, we also place a forgivable lien on the property for approximately 20% of the cost of the ADU, for a twenty year period. For every year that the ADU is rented to a low income person, 1/20th of the lien is forgiven. If the homeowner prefers to rent at market rate, then they pay down that lien, using cash from the rent they receive. In other words, if they rent to a low income person/family for 20 years, there is no payment due. Either way, the rent goes to the homeowner, to supplement their income.
6. What is the turnover rate or resale of homes you have built?
The turnover rate is very low. Of the sixty plus homes we have built, around five of them have been purchased and resold.
7. What is your criteria for seeking homeowners?
We choose homeowners based on affordability, willingness to partner and need for housing. Every homeowner has to be able to qualify for and afford a mortgage. The mortgage amount is dependent on their annual income. We cap the mortgage payments to an amount such that their housing costs, which include mortgage payment, property taxes, insurance and HOA, do not exceed 30% of their monthly income. We also require that every homeowner contribute 500 hours of sweat equity at the construction site. This requires a commitment of almost two years of weekends. We conduct home visits and check the current living conditions of the families we are reviewing. We check for crowded conditions, unsafe environments, other poor living conditions etc. So, all three of these attributes - affordability, willingness to partner, and need - go into our family selection process. There is more detailed information available on our website.
8. Why has Monterey County been so difficult for Habitat to expand production?
That is hard for us to say, because none of us were involved in the early years, so we do not know what obstacles the early pioneers faced. We merged in 2017, and since then we have been involved in large back to back projects in Santa Cruz, and we haven't had the bandwidth or resources to expand into Monterey. We see that changing, as we have grown our resources and also have more supporters and advocates for expansion into Monterey on our Board and donor base.