Carter project worth $40M to Winnipeg

Hey there, time traveller!
This article was published 27/10/2017 (2959 days ago), so information in it may no longer be current.

HOSTING former U.S. president Jimmy Carter in July required hundreds of hours of preparation, solving “gut-wrenching” logistical problems and 3,000 volunteers, but a new report and statistics from Habitat for Humanity Manitoba suggest the Carter Work Project will spin off more than $40 million in benefits to Winnipeg.

“No question, it was a huge amount of work,” said Sandy Hopkins, chief executive officer of Habitat for Humanity Manitoba. “Goodness knows we couldn’t do it every year, but it was more than worth it. Absolutely.”

Hopkins’ comments come a day after the federal government said it is earmarking as much as $40 billion for a 10-year housing strategy. He hopes the results from Habitat’s study convince the federal government to include a home-ownership component.

“We’d be delighted to actually see the strategy,” he said. “It’s not clear how much money is available for home ownership.”

Ownership provides several benefits, he said, including taking pride in the property as well as freeing up rental and social housing to give others a place to stay. It directly benefits government coffers because it reduces costs for social services and health care, and generates increased income taxes as families improve their earnings through education.

Habitat recently studied the projected effect of the Carter project for a 50-year period. In 2017 dollars, the study found the 25 homes built that week in July:

• required an initial investment of $6.1 million

• will result in $15.1 million in mortgage payments

• contributes to another 48 new homes, including homes built during the final 15-year period, which are worth $4.5 million in ongoing mortgage payments

• returns $14.5 million in social return on investment (reduced welfare payments, health care costs, property taxes, etc.)

• leads to a total of 83 new homes by 2067 as the effect of each year’s projects snowballs (Habitat reinvests mortgage proceeds into new projects).

Hopkins said Canada Mortgage and Housing Corp. recently analyzed the effect Habitat’s model has on communities. Officials interviewed 1,000 Habitat homeowners and compared the results against Canadians of similar means who did not participate in a Habitat program.

Hopkins said the results for each question showed the majority (ranging from 75 to 95 per cent) of Habitat homeowners were healthier and required fewer hospital visits; had sent one or both parents back to school to upgrade skills and earnings; had children who did better in school and were more likely to continue education after high school, and families were less likely to require social services such as welfare, income assistance or food banks.

Habitat then engaged Boston Consulting Group, which did the work pro bono, to put numbers to those qualitative results. BCG calculated the $14.5 million figure that Habitat calls a social return on investment.

Hopkins said the BCG numbers don’t include the $500,000 a year Habitat pays in direct taxation — land-transfer taxes, provincial sales taxes and GST — generated during construction.

Nor do they include the money paid to tradespeople — drywallers, electricians, plumbers, etc. — to complete certain tasks on each home.

Hopkins said the Carter project brought increased exposure to Habitat’s business model, increased fundraising by, “conservatively, a half-million dollars more than we would have,” and brought on board new funding partners, some of which he hopes will remain with the program.

Habitat sells each house at fair-market value to participants and sets mortgage payments based on a family’s ability to pay. The payment is set at 27 per cent of household income and is a minimum $550 per month. From that, Habitat also pays property taxes on the family’s behalf.

For 15 years, the mortgage is interest-free and in the 16th year, families are expected to have sufficient equity to seek a conventional bank mortgage and use the proceeds to pay off the balance owing to Habitat.

Habitat borrows money to buy the land, but pays 100 per cent of the costs of construction through fundraising, he said.

All administrative costs, including salaries, are paid from revenue generated by the ReStore. Donations go straight to construction costs.

“We’re the only charity that has figured out how to pay for itself,” Hopkins said.

kelly.taylor@freepress.mb.ca