Habitat Detroit originally rehabbed houses versus building new. Once the houses’ infrastructure was brought up to code by rewiring, replacing the plumbing and heating system, water heater, drywall and insulation, we realized that the cost to rehab was more expensive than new construction. Today, health regulations require that mold, asbestos and lead paint (used in homes built before 1978) be abated. These can add additional cost as well. Another recent regulation is that any rehabbed house where federal funds are used to subsidize the rehabilitation process, the house must meet Energy Star standards.
Probably the most important deterrent to making the decision to rehab a house is its condition. Many homes once foreclosed are abandoned. Once abandoned, these houses are targets for thieves. Brick veneer homes are stripped of their brick. Windows are typically removed or destroyed. The electrical wiring and water pipes are also popular items to strip for their salvage/scrap value. Lastly, water heaters and furnaces are typically removed and sold for their salvage value. Since the housing values have plummeted in the current economic downturn, most houses repair costs far exceed the appraised value.
Habitat Detroit is currently working with Wayne County and city of Detroit officials to identify those structures that can be rehabilitated and those that require demolition.