Habitat for Humanity struggles with high construction costs

Reeling from massive cutbacks in volunteers during the COVID-19 pandemic, and grappling with high construction costs, Habitat for Humanity leaders would be the first to admit they’re struggling.

The past year has felt like one punch after the other, they say. First hit: Habitat's local affiliates had to limit volunteers over virus concerns, forcing them to fork over more money to hire contractors. Second hit: Revenue was dented by temporary closures of ReStores, the reuse stores operated by local Habitat organizations. The third: Construction delays caused by pandemic-induced kinks in the supply chain, which make affiliates wait longer for supplies.

What could have been the knockout blow was the spike in construction costs. Lumber prices, according to the National Association of Home Builders, increased by more than 300% since April 2020. Demand for new homes, as well as demand for supplies for renovation projects and other factors, also kept costs high, experts say. Prices have come down in recent weeks, but they are still significantly higher than before the pandemic.

Morgan Pfaff, the executive director of Habitat for Humanity of Wisconsin River Area, which operates in rural Baraboo, Wisconsin, said the group had to cancel the second house it was going to build this year because it just can't afford it. The one house they are building is costing more because it doesn't have enough volunteers. “It’s going to be, at least, an additional $13,000 of contracted labor that we hadn’t budgeted for," Pfaff said. "Then you add in the cost of materials, and it’s really upside down.”

Faced with challenges on all sides, Habitat's network of independent, locally run affiliates are trying to cope with increased costs by taking out loans, increasing fundraising and using alternative construction materials, among other things....