The analysis here doesn't apply to Habitat for Humanity's disaster work, or work outside of San Francisco.
Ignoring commercial space, in San Francsico, if land is available it will have housing built upon it. Additionaly, the primary cost of a house is the land it is built on, not the building supplies or labor. Consider first the situation without Habitat for Humanity. A potential donor owns a plot on which they pay a commercial builder to build a house, which they then sell to a buyer. Now imagine instead a donation of the original land and materials to Habitat for Humanity. The new owners of the house have effectively displaced the previously mentioned buyer. Suppose for the sake of argument this buyer is wealthy. This buyer will then buy a home that might have been bought by someone who is middle class. Who in turns displaces someone who is poor. A lot of fuss is made of the poor Habitat for Humanity home buyer, but relatively little is made of the other poor person that has been displaced. In reality the two have simply swapped places. At best the impact of Habitat for Humanity is thus neutral.
This analysis is of course only valid when land is scarce, and Habitat for Humanity isn't increasing the density of housing by more than what would a commercial builder. Since Habitat for Humanity doesn't appear to build high rise housing overall this will typically be the case.
Note that Habitat for Humanity Greater San Francisco doesn't attempt to reach the poorest of the poor. A family of four needs an income of at least $47k, and a credit score of 650 to qualify. Also note there are a number of complaints against Habitat for Humanity by home owners.
Lastly note that Habitat for Humanity doesn't provide free housing, but offers the house to the prospective owner using an interest free loan for financing (as best we can tell). The upside of this approach is it provides additional capital to grow their work (much like microcredit). The downside is it makes the housing inaccessible to the poorest of the poor.
| Project | Cost | Real world outcome | Outcome estimates | Economic value in Western terms |
|---|---|---|---|---|
| Build a house | donated land + donated material + (free labor) | house for low income family | Value of free labor is equivalent to say 10% of the donated land and materials; according to Habitat for Humanity Greater San Francisco's 2008 form 990 35% of total expenses were used up by fundraising and management and 65% were used up by program expenses (including 23% in interest foregone on loans); 1.10 x (donated land + donated materials) / (donated land + donated materials) - 35% = 75%. | donated land + donated material + equivalent paid labor |
Consider now the displacement issue described above.
0 - 0.8