NJ affordable home builders overcome COVID obstacles. Here’s how they manage to survive

Rebecca Picciotto
NorthJersey.com

The past year has stacked the odds against charities that build affordable housing. 

Material costs saw record highs, while pandemic restrictions created widespread labor shortages.

But despite obstacles for their budgets, timelines and volunteer supply, many have beaten the odds. Habitat for Humanity chapters of Paterson, Bergen County and Morris County all report that they were able to sustain — and in some cases even expand — their construction throughout the pandemic.

How did they manage it? Partly luck and partly being in the right state.

The lumber frenzy

Building material prices shot up through the pandemic, most notably lumber.

“Your most common piece of plywood was retailing pre-pandemic for, roughly, let’s say $22 or less, depending on the buy. At the height of all this, it was about $65,” said Steve Harrison, the manager of Morristown Lumber.

Matt Kuiken, the vice president of operations at the Kuiken Brothers supply company, explained that the nationwide shortage resulted from a confluence of problems that spanned from the start of the supply chain (with West Coast wildfires) to the end (not enough truck drivers to deliver the freight).

Plus, COVID restrictions dictated smaller crews in the lumber mills.

It all meant that when it came to lumber, “You could have paid anything you wanted — the materials just weren’t available,” said Scott Millard, CEO of Paterson Habitat for Humanity.

Fortunately, Paterson Habitat had homes already framed pre-pandemic, so its lumber needs had been mostly met.

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Habitat for Humanity of Bergen County similarly got “fairly lucky,” said Director of Construction Gary Kuhl.

“A lot of the things that we [needed] were secured prior to COVID,” he said. In fact, Bergen Habitat’s build even came in under budget. Morris Habitat for Humanity had a 12-unit project that was already “three-quarters of the way finished,” CEO Blair Schleicher Wilson said.

But not all nonprofits had such good luck. At the start of the pandemic, the New Jersey Community Development Corp. had just begun a 52-unit affordable housing project. When lumber prices spiked, it had to modify its contract with its supplier. So far, CEO Bob Guarasci said, the project is on time, but the price hikes do “have the potential to impact the project’s cost.”

Lumber prices have since come down, but suppliers are reserving their optimism. Harrison said his suppliers “are all saying, ‘Be cautious about what you’re doing; don’t wait too long to buy, because prices may go back up once everybody comes back to market to purchase.’ ”

That precarity has put some nonprofit building in flux. Paterson Habitat is set to start 14 new homes, but Millard and his team are left wondering how to predict their budget: “It’s an unfolding picture day by day, which makes it hard to plan and manage,” he said.

It wasn’t just lumber

Kuiken cited supply shortages for any manufactured goods that had a lumber, steel, aluminum or vinyl component — meaning windows, doors, framing materials and more. Harrison recalled the February snowstorms in Texas, which froze up the supply of resin, bringing a “huge shortage” for fiberglass doors or “anything that uses a fiberglass resin.”

Consequently, Paterson Habitat has struggled to get kitchen cabinets, doors and windows, causing projects that were supposed to be done in March to be delayed until June. Bergen Habitat has come up short on appliances like microwaves, stoves, washers and dryers. 

A lack of volunteers

But the shortage that has affected nonprofit affordable home builders the most is volunteers.

Morris Habitat is used to getting 13,000 to 14,000 volunteer visits each year to help with construction. In 2020, it had fewer than 1,000. The Paterson and Bergen chapters also saw substantially fewer volunteers. In 2019, Bergen Habitat had 1,156 volunteers, and in 2020 it had just 424. 

All have older volunteers (Bergen’s volunteers affectionately refer to themselves as the “Greyheads”), which puts them in an at-risk demographic for COVID. As such, many volunteers stayed home, and the Habitat organizations had to rely on paid staff and outsourced subcontractors, which, Millard said, “put on a lot of cost pressure.”

Bergen Habitat "Greyhead" volunteer Mike Masiello helps put the finishing touches on the organization's Westwood home.

Vic Pedalino, one of Bergen Habitat’s Greyhead volunteers, paused volunteering from March to May 2020. At 73, he is “one of the younger people” on the team.

“I can honestly say that the several months that we were not able to go and work on Wednesday, it affected everybody. [It was as if] you weren’t seeing members of your own family,” Pedalino said.

Beating the odds

Nevertheless, housing is getting built and rehabilitated in North Jersey. In the 15-month period from March 2019 to June 2021, Paterson's Habitat completed 15 homes. It has  20 projects — 13 new homes and seven renovations — planned over the next year.

The Habitat chapter of Bergen County operates on a smaller scale, averaging about a home per year, a pace it has maintained through the pandemic. It's now building a wheelchair-accessible home in Westwood for a veteran and their family. 

Bergen Habitat Executive Director Teri Capparelli said materials for the Westwood home were secured before pandemic price increases, but the next home planned, in Hillsdale, will be a different story. "It will affect us on the next build," she said. 

Habitat for Humanity of Bergen County is set to complete its build at 95 Sand Road in Westwood by the end of October, despite setbacks imposed by the pandemic.

Habitat homes are generally built for families, veterans or anyone who lacks access to stable and affordable housing, a population that has grown during the pandemic.

Millard said, “Despite all the work [of nonprofits], our development doesn’t come close collectively to addressing the affordable housing needs in the state, which I think is why we see that as much as we are able to accelerate our work, it’s not keeping pace, so New Jersey is still becoming more unaffordable.”

How New Jersey did it better

The stability of North Jersey’s nonprofit construction runs counter to national trends, which saw many organizations stalling or canceling projects. How did some New Jersey nonprofits get out with just a couple of scratches?

Part of it goes back to New Jersey law. The state Supreme Court mandates that municipalities meet a quota, or "fair share," of new affordable housing units.

Certain cities, including Paterson and Passaic, have no quotas because they already have a large amount of affordable housing. As a result, Paterson Habitat has to compete for land with for-profit developers. Still, Paterson Habitat has been able to expand its construction with increased government support.

“Our current governor and administration had made a commitment to affordable housing that previous administrations did not. So there are more resources that are coming into play for affordable housing,” Millard said. “Now, how long will that last? I don’t know.”