Calculating The Cost of an ABWK Project

Figuring out material and supply cost for a project is fairly simple and straight forward if you understand the work scope. Arriving at a cost for staff, transportation and warehouse expenses are a more complicated formula.

At Twin Cities Habitat for Humanity, we have decided to create a per day cost for our projects to simplify the process for how we pass on these costs to the homeowners we serve.

For projects that cost $3,500 or more, we put a forgiveable mortgage on the home so that we have a way to secure our investment into the home and community. The mortgage stays on the property between 7 - 10 years depending on the value of the project. We used to calculate costs based on the materials used and 50% of the retail value (which historically would come close to our organizational cost of a project.

However, as our projects have grown in depth and expense this model is less accurate. So we have decided to calculate our average project expenses based on days onsite including prep work. Twin Cities Habitat for Humanity

You can see how we calculate exterior and interior projects here: ABWK Project Calculator

Family Partner Agreement (Sweat Equity)

Twin Cities Habitat for Humanity recognizes the value homeowners place on their home and the hard work that it has taken to acquire and maintain it.  As the head of their household and responsible for the upkeep of their property, we are honored to be invited to come alongside families in helping to restore their home.

As a partner with homeowners in helping to improve their home, we have a variety of options to help complete the necessary work.  We also know that every homeowner situation is different and want to give them some flexibility in working with us.  That's why we give homeowners a couple of options to partner with us:

1. Do It Yourself Support:  This is where you provide the labor for all the work needed and we would provide the materials and/or expertise to complete the project.
2. Work alongside ABWK staff and volunteers during the project to complete the work.  The homeowner and all able-bodied adults are required to work on their home each day with the assistance of staff and/or volunteers.

Homeowners are required to choose one of the options above.  However, if their circumstances do not allow for the above options they can choose one of the options below with A Brush with Kindness staff approval.

1. The homeowner will perform designated tasks on their own according to their ability and with materials supplied by A Brush with Kindness to complete the work on their home. ABWK staff and/or volunteers will complete the remaining tasks.
2. Family host – share or write your story, thank and be positive toward staff and volunteers while work is being performed.
3. Volunteer on another ABWK project or Habitat home build because your work schedule does not allow you to participate in completing the work on your own home.

We ask homeowners to explain why they need to choose one of the three options above.  Then it is reviewed by ABWK staff for approval.  Here is our Family Partnership Agreement.

Cost Recovery Assessment

While it's obvious to many that Habitat is an organization built on serving "the least of these."  Is it possible we may have lost our way as we shift from serving under-resourced families needing an affordable home to serving families looking to preserve their home?

Have we misapplied our hand up philosophy as we shift to serving families who didn't need our hand up program acquiring their home?  Yet, now find themselves struggling to maintain their hard earned investment.

We have interviewed thousands of struggling families and vetted their financial circumstances as we have looked for partner families for A Brush with Kindness.  Ninety percent of the time they are either under 30% of AMI or have housing expenses over 30% of their gross income or pay more than 50% of their gross income on household expenses.  These are not families who have much in the way of disposable income.

However, to help give some objectivity to these compelling family stories, I have created a tool to assess a families ability to financially partner with Habitat.  If a family does not meet the income percentages above, they will not be required to pay back our investment in their home unless the investment exceeds $3,000.  Thereby, the family will be required to sign a 0% forgivable mortgage and note payable when the home is sold or refinanced.  This finance tool protects our investment for a set period of time based on the value of the work completed.

Here is the link to my Cost Recovery Form.