Tuesday, October 11, 2011

H.F.H.

Today's speaker was straight up awesome. I've worked with Habitat for Humanity before, but I was one of those people who "work for a day, get the good bumps, feel good, and don't change anything fundamental." Because "when you do a deep philosophical humanity work, you'll find out that this is very complicated." His words offended me a bit, but it is true. Renovating a house in a heavily distressed neighborhood is not necessarily an enlightening answer to the community. Unless there is already a resident in that house, the project could be nothing but a money waster.

His new idea of reviving neighborhoods by streets really intrigued me. Given the fact that the real estate in Michigan is speculated to decrease in price in the future and that "the gap" would be immense when constructing houses in distressed neighborhoods, it is unlikely that this project would financially profit the organization. His explanation of relatively inexpensive renovation in return of great increase in equity can only be applied in two conditions.

1. If the neighborhood does not lower the home value.
One of the core issues for HFH was working hard for nothing. If they start this project in places of need (distressed neighborhood), I don't believe that changing a street would all of a sudden attract many "partner families". He mentioned that it would be more effective if he chooses the path of clustered renovation. I believe that, but that would be investing in the future.. how scary.

2. If the resident of the house is willing to leave after the renovation.
If HFH does not won the property, the service they provide will be paid by the resident, but that only breaks the cost evenly.. If they could buy the property for a relatively cheap price, renovate it, then sell it for a price that is greater than the original price of the house plus the cost of renovation, it could be somewhat profiting. But that would go against their motto: "We're don't make money from people in need." So the equity must sky rock after the renovation in order to get some cash to cover their losses.

In short, I admire people like Don who dedicate their time, money, and life to change communities. Rather than blaming the president for not changing the whole country (#American Culture) it is important for us to exercise our capabilities to make an impact in "our" country.

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