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Sonoma County Habitat for Humanity suspending homebuilding because of cash crunch

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Niko Flores on Monday laid gray plank flooring in a room on the second floor of his “sweat equity” home on Edison Street in Graton.

It’s the kind of work Flores, 30, does at The Floor Store on Santa Rosa Avenue, and his labor on his own house helps reduce the overall cost of his 1,037-square-foot home, which is being built by Sonoma County Habitat for Humanity.

“This is a dream come true,” said Flores, whose wife and two boys plan on moving in early next year. “We wouldn’t be able to do it without Habitat.”

But there’s still significant work to be done on his family’s house, along with another Habitat home adjacent to it, and the nonprofit homebuilder is running out of money. The two homes will be the last ones Habitat builds in Sonoma County — at least for a while as the group retrenches and decides how to proceed with a viable operation.

Habitat announced Monday that it was suspending homebuilding after 35 years in the county and plans to lay off about a dozen staff at the end of November, including its CEO, because of severe financial trouble.

“This is just such a tragedy,” said Tim Leach, Habitat’s board president. “But I am adamant this is not a fold up the tent and go home. This is a suspension of our building operation, while we try to regroup and figure out how best to relaunch, how to best serve low-income families in Sonoma County.”

The move to suspend operations comes after a brief but rapid expansion of home construction projects and a staffing increase made possible by significant gifts and donations following the 2017 North Bay wildfires.

But that cash infusion has slowed to a trickle and the county Habitat organization now finds itself unable to cover its expenses, Leach said.

The local Habitat, part of a global nonprofit housing organization with affiliates in 50 U.S. states about 70 countries, has been operating in Sonoma County since 1984. Leach said that during the first 30 years here, the nonprofit built one home every 12 to 18 months.

By comparison, the organization has completed 12 homes in the past year and is nearing completion of Flores’ house and neighboring home in Graton. To build that many homes, he said, Habitat had to hire more people with expertise in construction, real estate, administration and homeowner services.

Habitat was able to sustain its staff increase with the windfall that came in just after the 2017 Tubbs fire.

For the fiscal year ending June 30, 2017 — just before the Tubbs fire — the local Habitat received $865,917 in donations, gifts and fundraising, according to the organization’s federal tax filings. The following year after the blaze, the organization received more than $4.8 million in contributions.

Leach said donations have sharply decreased since then.

Habitat’s suspension will include two of its three major operations. They include its homebuilding and “family selection” services, in which staff work directly with candidate families to make their dream of homeownership come true.

The only operation that will continue will be the Habitat ReStore in Santa Rosa, which resells donated home appliances, tools and furnishings at discounted prices.

David Rabbitt, chairman of the Sonoma County Board of Supervisors, called Habitat’s retrenchment “sad” but not surprising given the challenges of building housing in Sonoma County and the Bay Area.

“They’ve done such a great job over the years,” he said. “Their model works well, although it’s challenging in high-priced areas in California and Sonoma County in particular.”

Ethan Brown, director of business development for the Sonoma County Economic Development Board, agreed. “Construction can be a tough business, even with as much work available as we have here currently,” he said.

One of Habitat’s biggest and most recent investments was opening its Habitat Center at SOMO Village in Rohnert Park.

The ambitious project was supposed to be a training ground for local students in the construction trades, as well as a prefabrication center for home panels or walls. It also was to house the organization’s administrative offices, now on Airway Drive in Santa Rosa.

The group’s overall goal had been to build more houses on a much larger scale, Leach said.

Reversing course and making the decision to lay off many positions was difficult, especially with the holiday approaching, he said.

“Most of the staff beyond ReStore is being laid off effective Nov. 30,” Leach said. “It’s so very unfortunate this is happening right now” with Thanksgiving approaching.

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