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Habitat can’t pay taxes, but will keep building

Springfield housing blitz strains local nonprofit.

When hammers and nail guns fell largely silent in Clark County in 2010 because of the recession, Habitat for Humanity kept right on building.

In fact, Clark County Community Habitat for Humanity, the local affiliate of the well-known international Christian nonprofit, seized an opportunity then to build 16 new houses in a two year-period using more than $1.45 million in federal grants, easily becoming the largest homebuilder in the county.

The job got done — 16 new houses were constructed on Springfield’s south side by the end of 2012 — but it came at a price to a local organization that will celebrate its 25th anniversary next year.

The organization, which typically only builds three houses annually with mostly volunteer labor, spent so much money trying to finish those 16 houses in time under the threat of having to pay back the entire grant that cash is now in seriously short supply, according to Matt Wilson, the group’s executive director.

Wilson is quick to brush off the notion that things are at crisis level, saying it’s “not doom and gloom on my end,” but Clark County Community Habitat for Humanity ended up multiple times recently on the county auditor’s list of property owners delinquent in property taxes.

The total amount owed is relatively small — Habitat owes $2,058 on nine delinquent properties — but it’s frustrating for Wilson that he can’t just cut a check.

Habitat will go on building houses, he said, because donations of money, materials and labor aren’t the issue.

“If I get a donation for $20,000 and they say it’s to be used for building materials, I can’t use it to pay the tax bill,” Wilson said.

Being delinquent in taxes subjects a property to sale at public auction, said Clark County Auditor John Federer, and he’s seen foreclosures occur over the kinds of seemingly nominal amounts owed by Habitat, including $83.66 and $32.05.

“You just don’t pop up on that list,” Federer said. “You’re notified a number of times.”

One of the delinquent properties, a vacant lot at 332 Galewood Drive in New Carlisle, looks to factor in prominently in Habitat’s long-term plans.

It’s hoped that construction on a new house will start there in the spring, Wilson said, which would make for the first local Habitat home to be built outside of Springfield.

Currently, though, Habitat doesn’t even have the $189.47 it owes in taxes on the lot.

“We do not have cash reserves on hand,” Wilson said.

Most of the delinquent properties owned by Habitat are empty lots to be used for future building, Wilson said.

One, at 1639 Allison Ave. in Springfield, is the site of an older, vacant house that Habitat now can’t afford to demolish, he said.

The most Habitat owes is $700.66 for a house at 1107 W. Perrin Ave.

Built by Habitat in 2003 and valued at $65,560, the 1,160-square-foot home was surrendered back to the organization by its partner family.

“And Habitat has never been able to resell it,” Wilson said.

To date, Clark County’s Habitat for Humanity has built 57 houses in Springfield since its formation, emerging in recent years as the county’s top builder.

“They’re a major player,” said Kent Sherry, executive officer of the Building Industry Association of Clark County. “Habitat’s been the leader for at least a couple of years.”

Nationally, Habitat for Humanity was the sixth-largest homebuilder in fiscal-year 2012, building 3,951 new homes in the U.S. and Canada, according to the international organization’s most recent annual report.

The fact that Habitat never stopped building when the sour economy effectively ended most other types of new construction speaks volumes about Clark County.

“It tells us we’re depressed economically,” Sherry said. “Miami County is going great guns. They’re fighting over lots there.”

The $8.5 million in grants awarded to the city of Springfield in two phases beginning in 2009 as part of the Neighborhood Stabilization Program — a federal program intended to beat back the local effects of foreclosures — marked the largest grant per capita of any community in the U.S.

The city went to work renovating scores of foreclosures, and Habitat, according to Wilson, entered into agreements with the city to take more than $1.45 million of grant money to build 16 new houses in the area between Grand Avenue and Catherine Street.

“Free money is never free,” said Shannon Meadows, community development director for the city of Springfield.

The deadline to get the work done — Dec. 31, 2012 — proved to be challenging for everyone involved, Meadows said, and the city spent extra money as well to finish in time.

“There was not a concern that Habitat was taking on too much,” she said, adding that the city doesn’t leave its partners “out to dry.”

She said city money was available to help Habitat complete its work on time.

Given the timing and what they knew then, Wilson said, the local Habitat board opted to finance the work on its own.

“We had to get them done,” he said. “To get them done, it cost us more money than anticipated.”

Delays in construction had snowballed, he said, and work that typically would have been done by volunteers — roofing, siding and finish work — had to be hired out.

Work finished the last week of December, he said.

The fact that the local Habitat’s ReStore — a thrift store of sorts for building supplies — also was closed longer than anticipated during its recent relocation from North Street to Wittenberg Avenue created “a perfect storm of things that could have gone wrong all at the same time,” Wilson said.

In addition, the local organization has had to file foreclosure proceedings on two of its properties for the first time in its history, he said.

Because partner families make their mortgage payments directly to the local Habitat affiliate, less money has been coming in as a result, Wilson said.

Of those 16 new houses, five are still without occupants, Wilson said, meaning Habitat is paying for their upkeep. Taxes were, however, paid on them, he said.

But, if they’re still unoccupied into the new year, when a new tax bill comes due, it could be a potential concern, Wilson said.

Their upkeep is a “small drain” on the organization, he said.

Overall, the building blitz runs counter to how Habitat generally operates.

Typically, a family will first be approved, he said, and then construction begins on their home, with the partner family putting in hundreds of hours worth of sweat equity to qualify for the no-profit, no-interest loan.

Even though Habitat’s 3 full-time staff members’ salaries had to be slashed 20 percent this past summer as a result, Wilson still thinks it was a sound decision to commit to building 16 new houses in two years.

“It gave us the funding to help 16 additional families,” he said. “It was most advantageous to our mission.”

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