US Housing Bust a Boon for Habitat Efforts Kirk Johnson - New York Times
go to original May 13, 2012

PORTLAND, Ore. – John Gray, 92, got wind about three years ago, near the bottom of the recession, that Habitat for Humanity was doing something pretty interesting in Oregon's largest city. In a depressed real estate market, Habitat, the nonprofit housing group, was betting big: trying to buy vacant land on the cheap, shopping from banks in repossession and foreclosure sales to squirrel away for housing projects years in the future.

Gray knows a thing or two about business cycles and buying opportunities. He made his fortune after World War II selling chain-saw equipment for a once-burly timber industry in the Pacific Northwest, riding the crest of America's first real housing boom. So he called a friend, who set up a meeting with Habitat's local chief executive in east Portland. Would $1 million in cash help out in the effort? Gray asked.

His philanthropy in turn opened doors to other donors, including a lumber company heir who had never given to Habitat but who was inspired to chip in $250,000. Gray then upped the ante, adding another $1 million to the statewide Habitat for Humanity office.

This spring, the first 22 homes in the largest Habitat project in Oregon history – a 65-unit subdivision left partly built by a private developer who abandoned it when the market crashed – is rising on Portland's east side. Habitat, meanwhile, has become the 10th-largest home builder in the Portland metropolitan area by housing volume, according to a local building trades association, and even more dominant on the lower-income east side through the $10 million land-bank fund that Gray helped anchor.

The 150 lots bought by the fund will keep the group busy for five years or more, even as it has increased its home building output by 50 percent, to 30 homes a year from 20.

"Recirculation," Gray said in describing his money's new path, from the old lumber and construction scene of the 1950s and 1960s – the GI Bill, suburbia on the rise, America in its lion phase on the world stage – to the new era of wounded, postcrash housing economics. "What they were doing seemed like a smart idea," he said.

Other Habitat branches have also pivoted in the recession, trying different angles in a dark time. In Nevada and Florida, for example, some Habitat groups stopped new construction entirely and shifted to renovation, buying abandoned properties in cities racked by high foreclosure rates.

Across most of the nation, one-at-a-time houses, financed by church suppers and staffed by volunteer hammer-swingers, are still the norm for Habitat, an ecumenical Christian group that was founded in 1976 in Georgia.

But business leaders and housing experts said that Portland – partly through Habitat's timing in betting big in a down market, partly through a donor network led by Gray that stepped up to help even as corporate support mostly collapsed – is creating something that will resonate long after the recession: Habitat neighborhoods.

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