Banking on KC – Lindsay Hicks of Habitat for Humanity of Kansas City
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Full Transcript:
Kelly Scanlon:
Welcome to Banking on KC. I'm your host, Kelly Scanlon. Thank you for joining us. With us on this episode is Lindsay Hicks, the president and CEO of Habitat for Humanity of Kansas City. Welcome, Lindsay.
Lindsay Hicks:
Thanks, Kelly.
Kelly Scanlon:
Most people probably know that your mission is to ensure that people have a safe and affordable place to live, but they may not know how you approach that. What do you do in order to fulfill that promise, to fulfill that mission?
Lindsay Hicks:
Yeah, so each and every year we partner with thousands of families to understand how we can support them in living in safe, decent, and affordable housing. So that looks different for all different families, as you can assume. But first and what people are most likely familiar with is our affordable homeownership program where we actually build the homes and then sell them to families with a zero-interest mortgage provided by Habitat.
And then second, we have our financial education and one-on-one HUD counseling. So we work with families individually to understand the pathway to homeownership for them and provide them support in that counseling along the way.
We also have our Home Preservation program, which is where we do minor in critical home repairs for existing homeowners that are not Habitat homeowners. And then we also have our Restore operations, which is our social entrepreneurial branch of the organization. Their stores open to the public where we sell new and used building materials, which generates unrestricted revenue to support our other programs.
Kelly Scanlon:
The other thing that you haven't mentioned yet is that Kansas City is a thriving Habitat for Humanity affiliate of a much larger international program. Tell us about how you work together.
Lindsay Hicks:
We're actually the seventh-oldest affiliate out of more than 1,300 in the world. So we partner with Habitat International in many ways. Obviously, there's funding partnerships that we participate in. But actually one of the great things is that we tithe some of our program revenue to Habitat International, which then is supporting home development and home building in other parts of the world. So currently, Habitat KC, our tithe affiliates that we're partnering with are Haiti, Nepal, and Uganda. Those are our three that we get to build homes in outside of what we're doing here in Kansas City.
Kelly Scanlon:
So this money that this tithe that you make, are there actual Habitat affiliates in those countries or are you working with other organizations in those countries to do similar work as Habitat is doing?
Lindsay Hicks:
Those are actual Habitat affiliates that are in those countries. It's so much fun. I get to talk with the executive directors and the CEOs of those particular affiliates and just learning how they're adapting to the housing crisis, the things that they're needing on a day-to-day basis, and just the ways that we can support them. To build a house over in Nepal, it's costing them about 40,000. Whereas for us here, it's obviously much more than that. So it takes less of a program donation from us, but they're seeing just as many houses built over there.
Kelly Scanlon:
So in many ways, there's lots of differences between the countries, but the lack of affordable housing is a lack of affordable housing no matter where you are?
Lindsay Hicks:
1000%. There still is policy changes that need to be put in place, and that's very different depending on which affiliate you're looking at and how they're trying to drive policy. But it's a fascinating network that we are so incredibly lucky to be a part of. I mean, to have 1,300 peers that you can turn to and glean from and learn from, it's just an incredible network.
Kelly Scanlon:
Yeah, it's quite a sounding board that you have there. What are some of the biggest challenges that you face in your efforts to provide affordable housing? And what are some of the ways that you're overcoming those challenges?
Lindsay Hicks:
Yeah, I think the two biggest challenges that we're facing right now would be obviously funding. You're not really a developer if you can't say that funding for affordable housing is certainly a challenge. It definitely is.
And so we're just looking at innovative ways that we can generate revenue to support and to subsidize some of those gaps. Our resource has obviously been very successful for us. And they generate about 1.2 million per year to support our programs, which is huge for us, but also looking at other ways that we can find innovative subsidies and advocate for those subsidies.
The second thing that we face in the work that we do is NIMBYism, depending on where we're building and what we're building. Specifically with certain projects that we've had over the past year, we certainly have learned and we've grown from some of those individuals who didn't have a full understanding for what it was we were trying to accomplish. Once we started partnering with them and educating them a little bit more, our projects were much better received. But it also took a lot of... It took political will and it took those that 110% supporter of our project to stand alongside us and to echo what we were trying to share, which is housing is needed everywhere. And this isn't just affordable housing, it's housing. It's just housing in general, and we need to have different types of housing to create a thriving community.
Kelly Scanlon:
You mentioned some recent projects, and one of those is the Pathway at Heritage Park in Olathe. Tell us about that and how it really does represent your approach to affordable housing.
Lindsay Hicks:
The Pathway at Heritage Park project has been one that we're really proud of. Certainly took a lot of effort and a lot of people to make this project come to fruition. But that started with the church who so generously decided that they believed wholeheartedly that we need affordable housing right here and we need it in Johnson County. And so they partnered with us. They sold us the land for pennies of what it was worth, and that allowed us to really dream what do we want to do with this land.
So we're doing 14 single-family homes on that particular piece of land. It's at the corner of 159th and Blackbob. But those houses will then go through Habitat's program. So all of our families that we select will partner with us through their homeownership journey. They'll do their homeowner education classes, their homeowner preparedness courses through Habitat. And then they'll also purchase their home through Habitat. So they'll have a zero interest loan, which creates the affordability factor for many families. The great thing about this project too is that the land itself is actually going to be put into a land trust.
Kelly Scanlon:
You let me right into my next question. Talk to me about land trusts and how they into your work.
Lindsay Hicks:
So the land trust is going to allow this particular piece of land and these houses to stay affordable into perpetuity. So how the model works, and there's different variations of it, but how we're doing our particular and trust model with the Olathe Pathways project is that the owners, the homeowners will own the house itself, but the land, they will do a 99-year ground lease on. And so they'll still pay taxes for their house. But essentially what happens is when they sign that ground lease, they're agreeing that this house will then be sold to another family That falls within the low-to-moderate income guidelines that we've set forth. But also too, the sales, there's a sales calculation, and so the homeowners will earn back all of their equity, but what we do is we cap the market appreciation at 25%. So they'll get equity, plus 25%. And then that allows us to keep the sales price affordable into perpetuity.
Kelly Scanlon:
So anybody who-
Lindsay Hicks:
And what we've seen with a lot of our other affiliates in the country have utilized the land trust model is that ensuring that there are units that are affordable forever is incredibly important because otherwise, we're just going to continue on this downhill of not having enough units. It's just going to continue to grow. So ensuring that is incredibly important. But also too, so many of the families that we partner with, this is a stepping stone for them. This is really just the opportunity for them to safely own a home, to affordably own a home. And their careers, it's just a trajectory of what happens with the families that we get to partner with. It's just inspiring and it's just unreal. And so it's life changing.
Kelly Scanlon:
It is important to note that even in more affluent areas, there are housing needs. You have service providers and people who want to live in the community they work in, but they can't afford. Sometimes they can't even take the job because if they have to live in a community far away, then the transportation becomes an issue. So it's not just a convenience, it's not just... It is truly life-changing.
Lindsay Hicks:
It really is. We have had so many people who have reached out to us since the Olathe project became public knowledge. We've had so many people reach out to us just telling us their stories and telling us why they really want to be a homeowner in the community that they've been renting in, but they couldn't find anything to purchase because there was nothing within their price range. And so just hearing some of those stories and knowing that we have the privilege to be able to partner with some of those families on their journey to homeownership is just something that we're incredibly excited about.
Kelly Scanlon:
One of the things that has been problematic since... Well, it was really exasperated during Covid, but it was beginning to happen even before Covid, and that was the rising cost of materials. And of course then there was a shortage of them as well, contributing to it during Covid. How has that caused you to adapt your strategy to still be able to affordably build these homes?
Lindsay Hicks:
It's a great question. So throughout the time of the pandemic, obviously yes, the rising cost of materials has been challenging, especially for a nonprofit affordable housing developer. We saw that the average house increased cost was $40,000 per house. So when you add all of that up for a nonprofit to take that on, it's quite expensive when you're building 15 plus homes per year. So there were a lot of things that we looked at as an organization to figure out how we could subsidize some of those gaps or be more strategic with how we were approaching housing.
First and foremost, our restore operations, having that branch and having that unrestricted revenue really helps to cover some of those gaps. And so we just continued to figure out ways that we could increase the merchandise that we had there, increase the donations that we were getting to restore just to help offset some of those costs.
Second, we looked at the way that we were building our homes. And typically, if you have volunteered with Habitat before, since so much of our house is built volunteer labor, we didn't have a lot of volunteers during Covid. So we looked at what can we do to be more efficient in getting our homes built. And so we began building walls and building some of the nuts and bolts of what we need to build these houses in our warehouses so that we didn't have weather delays and we didn't have things along those lines. So that really helped to cut the cost down too.
And then lastly, we just looked at different subsidies that we could begin to advocate for. Obviously, with Covid came a lot of ARPA funds, and so we really partnered with our local jurisdictions to understand, "Can housing fit in this? And if so, it's needed and it's needed here." Especially on the home repair side too. We have more than doubled the amount of families that we're working with with home repair. This past year we finished 332 projects for 140 families. So recognizing that we needed some subsidies there as well.
Kelly Scanlon:
So 330 some repairs on 140 some homes, are these homes that Habitat has built in the past or is it a program that any homeowner that fits a certain income level can apply?
Lindsay Hicks:
It's a program that any homeowner, as long as they fit within our income guidelines, can apply for. Almost all of the homeowners that we partnered with were not Habitat homeowners. And so that was afforded by, again, many jurisdictions recognizing that there are a lot of individuals, especially some of our aging residents that are on a fixed income and they need the support to have a new roof put over their head.
We had a veteran who was strategically placing Orange Home Depot buckets around his house because his roof wasn't working, but he knew he needed something to collect the raindrops. We can't have our veterans living like that. So we partner with these families and we go in and we look at what are the health critical safety needs that need to happen in the form of a home repair that we can do and that we can partner with them on, and then we complete the repair.
Kelly Scanlon:
I know one of the other areas that you work at is advocacy. Talk to us about those efforts.
Lindsay Hicks:
We're really fortunate. We talk about our partnership with Habitat International. We have a really strong advocacy presence as a Habitat organization. Every February we go in and do what's called Habitat on the Hill. And so we had more than 400 different Habitat representatives from all over the country that we're advocating for affordable housing funding resources or policy changes to impact the families that we partner with. So that's more on the national level.
On the local level, especially over the past couple of years, we've been spending a lot of time looking at what are different ways that we can create change within policy to impact how quickly we can get homes built, how cost effectively we can get homes built. And then also too, what funding can we advocate for to subsidize some of these costs? So we're looking at about a 35,000 to $40,000 gap right now in each of these homes. And so we definitely recognize that there is opportunity if we can advocate for it.
Kelly Scanlon:
But I know there are other larger partnerships and collaborations that have been very vital to your work there at Habitat. What are some of those partnerships and how do you work together to create even bigger impact?
Lindsay Hicks:
Yeah, I think the most important partnerships that we have are those with our fellow nonprofit organizations that we get to work with. We receive so many calls, I mean thousands and thousands and thousands of calls each and every year for affordable housing solutions. And what we recognize is that some of the families that are reaching out to us, there's barriers beyond housing. And so we're really fortunate that we have partner agencies that we can refer them to so that we are holistically addressing some of the root causes for some of these families to be living in the circumstances that they are.
So first and foremost, our fellow nonprofits are huge partners of what we do. The other is just being involved with other housing organizations. We're all in this together. We really are. And we all provide different expertise and different services. And so partnering with other developers and with other folks who are focused on home repairs, we have the greater Kansas City Home Repair Coalition that Habitat gets to co-backbone. But partnerships like that really enable us to serve more families and to serve them more intentionally.
It's a wide variety. Certainly our banking partners too are huge partners with our financial education, our financial literacy, and really listening to the advocating that we're doing for lending products that work for the families that we get to partner with. There is a whole entire wheel of partners that we are really fortunate to be able to work alongside.
Kelly Scanlon:
And another huge group of partnerships, and sometimes they might just be one-off encounters, but it's your volunteers. Talk about a network. The volunteer network that Habitat has is just incredible. Talk to us about some of the different things the volunteers do.
Lindsay Hicks:
Our volunteers are amazing. We had over 4,500 volunteers last year alone. They help us to build our houses. They help us to do the financial education courses for our home buyers, for our financial education clients. We have committees, we have board members, we have volunteers in our resource. There's pretty much every single touch point and every single program within our organization. That's one of the pillars that we stand on, is our volunteers to support them. So there's many ways to get involved. It would not be right of me to not put in a plug that if you want to volunteer, go to habitatkc.org. We're always looking for volunteers. You do not have to have the skill set at all. We have a team that will help you get to where you need to be.
Kelly Scanlon:
It's habitatkc.org?
Lindsay Hicks:
Yep.
Kelly Scanlon:
So you talk about these restores. How many do you have throughout the metro area?
Lindsay Hicks:
So we have five restores in the metro, and they pretty much are in all of the quadrants of the metro area. Our restores are where we sell new and used building materials to the public. Those materials, some of them are new, a lot of them are donated. 85% of our product in our restores is donated product. So you can donate to any restorer. They're all on our website as well. But again, those just help create that unrestricted revenue to support our programs.
Kelly Scanlon:
Looking ahead, what are some of your longer-term goals for Habitat here in Kansas City?
Lindsay Hicks:
Our goal over the next 10 years is to impact 125,000 lives through affordable housing solutions offered through Habitat for Humanity. That's really what we're working toward, and that's through the different aspects that we've talked about today. Some of the bigger projects around the horizon is to really partner with developers.
Kelly Scanlon:
For-profit developers?
Lindsay Hicks:
Yes. Yep, to do bigger, much more larger-in-scale projects so that we can have different income levels and really mixed income, mixed use, mixed community projects. So that certainly is on the horizon. We would love to become a CDFI so that we can lend outside of just lending to our home buyers who are purchasing through our program. So that's something that we're currently looking at right now.
The other thing is just continuing to expand our programming and the housing that we're building. We currently are actively looking for land so we can develop 50 to a hundred home neighborhoods. Now that we have some of these 15 to 25 home developments, they're in production and they're almost completed or are about to break ground on. We're looking for that larger in scale. We visited a lot of other Habitat affiliates in the country and have learned from them. We feel like Kansas City is ready. We've had such a great year in terms of our city, and now we're kind of ready to take off as an organization too.
Kelly Scanlon:
So when you talk about the various types of housing, so you're talking about multi-family. In the latter there, you're talking about building whole subdivisions then?
Lindsay Hicks:
Yes. Yeah, definitely. Building whole subdivisions, if not us being the only developer, which might make sense for some of the developments that we're looking at doing. But other developments we're hoping it makes sense, and we have some partners that we've talked to bring in other developers. There's a multi-family, there's townhomes, there's single family, and it just is a master plan that really works and makes sense for that particular piece of land.
Kelly Scanlon:
How does Kansas City compare in terms of it's unhoused and also to the opportunities that you have for providing the solution to that?
Lindsay Hicks:
We certainly are one of the rising markets. And so in learning from other affiliates, what we've seen is that the response is that we have to be proactive about our response, especially as an affiliate with Habitat for Humanity. And right now, there is some opportunity for land acquisition, and so we need to be more strategic about going about that so that we can continue to utilize that space intentionally so that we're serving families that have a need for that affordable housing.
We've really learned from the Habitat affiliate in Denver, obviously you've watched their housing market and seen a lot of what's happened there. And they have just continued to be more strategic and to be more innovative with the type of housing that they're doing. All of their housing is going into a land trust that they're developing there, and most of it is that more townhome, duplex style Omaha. They're doing a hundred home development right now. Some affiliates are on the East coast just learning with some of the work that they're doing. That's the great thing, is that we have all these different models that we can look at and just really have the opportunity to look at the land that is available and figure out what makes sense for our community.
Kelly Scanlon:
Lindsay, thank you for all the work that you and your team do here in Kansas City to help make housing more affordable and give people more opportunity. And also, just thank you for taking time out of your busy schedule to be here today. We really appreciate that. And for anybody who is interested in getting involved, go out to habitatkc.org.
Lindsay Hicks:
Yeah, thank you for having us and for learning more about Habitat.
Joe Close:
This is Joe Close, president of Country Club Bank. Thank you to Lindsay Hicks for being our guest on this episode of Banking on KC.
Habitat KC is transforming lives by addressing affordable housing challenges through innovative solutions like their affordable homeownership program and financial education initiatives. Habitat KC's efforts in developing projects like Pathway at Heritage Park demonstrate their commitment to creating inclusive communities. Through partnerships and advocacy, they're breaking down barriers and ensuring that housing remains accessible for all income levels.
As Lindsay noted, community support and volunteerism is important in achieving Habitat's mission and underscores how everyone can contribute to making a difference.
Country Club Bank is proud to support organizations like Habitat for Humanity that strengthen our community and enrich lives. Together, we're building a better Kansas City.
Thanks for tuning in this week. We're banking on you, Kansas City. Country Club Bank, member FDIC.