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Jonathan Reckford jokes that he couldn’t actually hold a job before becoming CEO of Habitat for Humanity International.
In the two decades after graduating from the University of North Carolina-Chapel Hill, Reckford had been a financial analyst. Goldman Sachscoach of Korean rowing team for the 1988 Olympics, and held executive and managerial positions marriotDisney and Best Buy. He was the executive pastor of Christ Presbyterian Church. minneapolisWhen he was recruited to lead Habitat in 2005.
What Reckford didn’t expect was how the dual disasters would play out. Indian Ocean The Tsunami and Hurricane Katrina would force the global housing nonprofit to expand its work so rapidly. Or that they would make building affordable housing such a high priority.
“It was a turning point,” Reckford, 63, told The Associated Press in an interview. “Those two huge disasters forced Habitat to change in some ways, which I think led to long-term benefits. We were designed as a grassroots movement to build a few houses in thousands of places. Suddenly, we needed to do massive things in some countries in Asia and then on the Gulf Coast. I’m really proud of these huge efforts.”
Reckford talked about other lessons he’s learned in his 20 years of Habitat leadership as he prepares for the annual Jimmy and Rosalynn Carter Work Project — the first since the death of Reckford’s “hero and role model” President Carter in December — which will build 25 sustainable homes in Austin, Texas, starting Oct. 26. The interview was edited for clarity and length.
I was in New Orleans in June and some areas are still not what they used to be. But a lot of it has come back.
Absolutely. One thing we certainly see everywhere in the world – global North or global South – is that it is 5 to 7 times cheaper to invest in mitigation than to fix things after a disaster. Another thing for the public to know is that after a major disaster, approximately 80% of the funds are spent on relief efforts. You definitely need all that relief effort. But then there is little time left for long-term recovery. And the practical reality after these major disasters is that there’s actually a 10-year cycle, 15-year cycle to come back.
The Trump administration has changed funding of its Federal Emergency Management Agency and refused to provide mitigation funding for states. Does this worry you?
This happens because we are seeing more extreme weather. This is not about politics. We have more incidents of floods here and from the affordability point of view we have an insurance crisis. We are investing in healthy housing. We always want to build commensurate with the risks in the sector and our track record has been really good. We’re trying to convince the insurance industry that families should get lower insurance payments because we’ve created safer housing. It’s just cost effective. It makes more sense to invest to reduce risk as it is incredibly expensive to hedge later.
What accomplishment are you most proud of in the last 20 years?
The day after my announcement, we moved and built the 200,000th Habitat home in Knoxville, Tennessee, and that meant Habitat had helped nearly a million people around the world. As of last year, we’ve helped another 61 million people. I’d say a big part of it is our framing question is “How many houses can we build?” Was changing from. Which was actually a good question, “What will it actually take to meet the housing need?”
Your microbuild fund is part of that.
We found, especially in middle- and low-income countries, only 5-10% of the population has access to bank loans for housing. We started lending money to microfinance banks and training them on how to give home improvement loans.
Those experiments went so well that 12 years ago we launched the Microbuild Fund. We raised $100 million – borrowed $90 million of that, which was the first time we’d ever taken on debt – and now, 12 years later, we’re closing that fund and getting ready to launch an even bigger fund.
The fund has provided loans worth $230 million to 56 microfinance banks in 36 countries. Those banks found that their home loan repayment rates were as good or better than their small business loans, so it created a new business channel for them. This has directly helped one million people make home improvements.
And those banks have now deployed $1.1 billion of their capital, so we’ve really started to show evidence that there is a market opportunity to make small unsecured home improvement loans to very low-income families for home upgrades. It’s scalable at a level we can’t match. This is a much larger number than we could ever create.
In the US, over the past 15 years since the housing bubble burst, it seems that what Habitat does and the importance of affordable housing has become more widely known. But it also seems like it’s still a long way off for most people.
Yes, I’m sad to say, you are right. I’ll give you an oversimplified, quick version of how I’ve seen it happen. The challenge of affordability has always been before us. But what’s really shocking is how much worse it has become over the last six years.
If you go back to the housing crisis, a lot has been written about what went wrong and how the entire housing value chain got corrupted in that way. But I think what really happened, if you look at small builders or big builders after the housing crisis, the big builders recapitalized and came back. Small builders did not do this. And they represented 50-60% of the housing supply, depending on the market.
As soon as we started under-building, initially, there was a lot of housing there. But we had under-building by hundreds of thousands of units per year for ten, 12 years. Its cumulative effect starts increasing. We need an “all of the above” approach to address this.
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