Housing project brings trial and reward

By LAURA BEHENNA

Bigfork Eagle

Kyle Heinecke, his wife and 27 other families built their own homes at the Tiebucker Estates subdivision in Somers, completing their houses in June 2006 after 14 months of working almost every evening, weekend and holiday.

"It feels really good to be paying a mortgage and not paying rent," Heinecke said. "I think the whole neighborhood appreciates what they have, certainly no less than someone who purchased their home [without building it]."

Heinecke was a member of Phase II of the Mutual Self-Help Housing program's project to build dozens of affordable homes in Somers over several years. Phase III is scheduled to begin in August of this year, with 16 more owner-built homes.

Phase II was fraught with problems, however, some of which could have been avoided if people on the administrative side had taken more responsibility, Heinecke said.

"When it was good, it was really good; when it was bad, it was really bad," he said of the experience.

Mutual Self-Help Housing is a U.S. Department of Agriculture program that helps people living on low to moderate incomes learn the construction skills to build their homes and their neighbors' homes. Through contributing their time and effort, they earn their down payments, closing costs and equity, and end up with homes to call their own, a chance to build wealth, and an affordable mortgage instead of rental payments.

As commonly happens in construction projects, unforeseen events slowed things down and drove up the costs of project. Heinecke charged that poor management and unhelpful attitudes on the part of Northwest Montana Human Resources, the agency that administers Mutual Self-Help Housing in this region, aggravated some of the problems the homebuilders in his group had to cope with.

"There's some things that need to change," he said. "There were serious mistakes made that people who didn't have the money had to pay for."

Phase II homeowners had to pay $9,000 more for their lots than the Phase I owners did, Heinecke said, even though all the lots were purchased at the same time. He charged that the extra cost of repairing a poorly built road was unfairly passed on to the new homeowners by raising their lot prices. They found out what had happened through a contractor, not from Northwest Montana Human Resources, he said.

Doug Rauthe, executive director of Northwest Montana Human Resources, disputed Heinecke's claim. The budgets for the 28 homes were created nine months before building began, he said.

"The homes came in on budget, not one penny more," Rauthe said. "Costs went up, but that didn't cost the families one penny more."

Lot values went up between the time the Phase I homes were built and the time Phase II began, which shouldn't have surprised the Phase II homeowners because property values all over the valley went up in that interim, he added.

Other mishaps included delayed shipments of building materials because of Hurricane Katrina, roof trusses that arrived a month late, vandalism and foremen who quit before their jobs were done, Heinecke said. But their worst headache was mold growth that developed inside the crawl-spaces due to wet weather and inadequate ventilation in the crawl-spaces, he charged.

The fee for cleaning up the mold came to $5,200 per family, a cost none of them was prepared for, Heinecke said. In addition, the USDA never analyzed the building plans or methods for possible problems, such as the faulty crawl-spaces, he claimed.

Heinecke was president of the homeowner family group when he explained the situation to Doug Rauthe, executive director of Northwest Montana Human Resources, and asked for relief. Rauthe told him and the other homeowners to "suck it up" and pay the clean-up cost as part of the price of owning a home, Heinecke said.

"We were strong-armed into accepting to pay for it [the mold clean-up]" he said.

Rauthe denied the homeowners had to pay for the clean-up.

"There was never any money out of their pockets to pay for the remediation," he asserted. "I got them all full grant coverage" for the entire cost of the clean-up, he said.

Deborah Chorlton, housing programs director for the USDA Rural Development state office in Bozeman, confirmed that USDA was able to get a grant to pay for the mold clean-up.

The mold grew because of unusually wet weather during construction, Rauthe added. The house plans were designed for high energy efficiency, including electric fans to vent the crawl-spaces, but the houses weren't yet wired for electricity when heavy rains came, he said. Also, particle board used for construction no longer contained anti-mold chemicals when Phase II was built.

In addition, Tiebucker Estates wasn't the only construction site to suffer from mold, he continued. Eagle Bend, Kootenai Lodge and other high-end building sites nearby also had to contend with mold growth.

Rauthe also countered Heinecke's claim that the house plans and homes weren't inspected properly. A USDA state architect approved the designs for all the home models, he said, and independent inspectors checked the homes several times during construction.

"They got a certified clean home, certified by an independent third party," Rauthe said.

Heinecke said the homeowners found and reported the mold in late September 2005, but the crawl-spaces weren't cleaned up until late February 2006.

"Why did it take that long?" he said.

Before the clean-up, however, Heinecke and his wife received a stop-work order from Rauthe, who told the couple they would forfeit their new home if they didn't sign an agreement to pay for the mold remediation themselves, Heinecke said.

"There were people who did not sign who really could have lost their homes," he said. He added that no one at Northwest Montana Human Resources had told him or the other homeowners he knows that a grant had paid for the remediation.

The Phase II project took four more months to complete than it was scheduled to, putting some of the new owners in a difficult position because their rentals were being sold out from under them and they had to scramble to find someplace to stay, Heinecke added.

The lack of clear communication and support from Northwest Montana Human Resources eroded trust between the agency and the homeowners, some of whom disagreed among themselves about what to do, which created more interpersonal conflict, he said.

"Each and every homeowner out there deserves an apology and a 'thank you,'" Heinecke said. "I want a meaningful, true, heartfelt apology."

"It was a difficult build," Rauthe said. "We had difficult relations with all parties involved on that build. And the parties have changed."

The USDA Rural Development state director and local USDA director are both new this year, he explained, and all the Mutual Self-Help construction staff have been "replaced by experienced, qualified professionals."

Heinecke said all but one of the Phase II project foreman quit because of frustration with how the program was going, and that several Northwest Montana Human Resources employees resigned in protest.

The Phase II homeowners met some unexpected backlash from the community when they talked publicly about their situation, Heinecke said. Some people told them they should be grateful they got inexpensive homes and stop complaining. Some assumed they were getting free homes, which is completely false, he asserted.

"We worked for 14 months in trade for our down-payment," he said. "We pay our taxes, we pay a full mortgage at a market rate. We're not a burden on taxpayers by any means. They should be proud of us.

"This program is by definition the best provision I've seen for people to buy a house," he added. "The way it was executed was inefficient. That program needs to be giving homeowners confidence."

What would Heinecke like to see done differently in the Mutual Self-Help Housing program? He said the local program leadership needs to communicate more clearly with the homeowners and keep them informed about what's going on. Leaders could be more open to the homeowners' ideas, and be willing to learn themselves. He suggested that someone who had experienced living on a low income could be a more understanding program manager.

"They could help us figure out how to make the right decisions, [such as] whether to buy a home and how to buy a home," he added.

He admits the homeowners made some mistakes of their own, for which they accept responsibility. "There are things we could have done better by a long shot," he said.

In spite of the hardships, Heinecke insisted he would go the Mutual Self-Help Housing route all over again. He and his wife became closer, they forged close friendships with some of their neighbors, and the experience made him a stronger, smarter, wiser person, he said.

"I would do it again and again and again," he said. "I would recommend this [program] to anyone, still, instead of going to the bank and getting a loan. The program helps facilitate a sense of community. It is a dream come true to have a home, to know your neighbors, and most of all I think the biggest dream come true is that people didn't think we could do it.

"Bottom line is, we have a home and we're very grateful we have a home," he said. "We earned it and we're very grateful the opportunity is there."

His advice to future participants: "Do it. Do it to the best of your ability. Don't be afraid to express your concerns. Don't be afraid of backlash. Don't be discouraged by people who think they're better than you. This is your future, not theirs.

"Just stand up for what's right every day. Remember what it's for. Keep your eyes on the big picture."

Rauthe said his agency learned some important lessons from the Phase II troubles. In retrospect, Northwest Montana Human Resources took on too much when it signed a contract with USDA to build 48 homes in two years, he said. Only 20 homes were built in Phase I, therefore 28 homes had to go up the second year to fulfill the USDA contract, he said.

Since then, the agency has contracted with USDA to build only 16 homes a year, and the new homeowners are split into two groups of eight each. In addition, the Mutual Self-Help office is now located right on the building site rather than at Northwest Montana Human Resources' downtown Kalispell office.

"I think there's plenty of blame to go around, and we've accepted all of ours," Rauthe said.

"I certainly recommend the [Mutual Self-Help] program to anyone who's eligible and qualified [and who] would be willing to do something that's difficult but worthwhile," he said. He urged interested persons to contact the Mutual Self-Help office as soon as possible.

For more information, call at 752-6565 or see www.nmhr-dist10.org/mshh.htm.