Just a few hours after a groundbreaking ceremony for the first Habitat for Humanity project in Marin County, volunteers from Wells Fargo and PG&E joined a Habitat construction team to begin work on a home in Novato.

Habitat has been trying to build affordable housing in Marin for 15 years. In the 1990s, a local volunteer Habitat group disbanded because no practical prospects for projects existed in the county. Forays into communities met with cold stares meant to rebuff the organization, most known for building sweat-equity homes in parts of the world distinctly different from Novato and the rest of Marin.

But the concept of affordability is a sliding scale, and the need can be just as great on a relative basis in Marin as it is in less affluent areas of the world. Habitat has built homes in 88 countries and in more than 1,600 cities in this country using the sweat-equity model.

The work crews that began the job on a foreclosed home at 1674 Center Road will be removing elements of a duplex that don't meet the city's zoning and building requirements. "There is a lot of structure that was done without proper permitting," says Ed Lehmer, Habitat construction manager at the site. After removing nonconforming parts of the property and bringing it up to code, the crew will create a three-bedroom, one-bathroom single-family home with garage and landscaped yard--Habitat's preferred model.

The Novato project is a collaboration between Habitat and the Marin Community Foundation, which is providing substantial financial support. The two organizations have worked together in the past on a project in Strawberry that's still alive but in economic suspended animation. The foundation awarded $450,000 to Habitat to build four three-bedroom affordable homes in the unincorporated area of Strawberry as part of a project that includes three large market-rate homes on a 16.5-acre parcel. The Habitat homes would meet the county's requirement for the developer, Pan Pacific, to include 20 percent affordable housing in its project.

Some neighbors immediately didn't like the idea, saying they objected not to the Habitat homes but to the three "McMansions" that anchor the project. Opponents packed a Strawberry Design Review Board meeting in 2007 to say the project "just isn't right" for their neighborhood--a refrain Habitat has heard here for 15 years.

The Strawberry project is still alive, but on hold because of the economy. The Habitat element is tied to the Pan Pacific market-rate plan, and until Pan Pacific sees a break in the real estate market, the plan will remain on the shelf.

That's as close as Habitat had come to breaking ground until Oct. 27, when shovels hit the dirt in Novato. Unlike the earlier chilly forays into the county, the current project has met open-armed acceptance.

"Some of the changes in attitudes have to do with our approach," says Phillip Kilbridge, executive director at Habitat. "We tried to be more proactive and be on the ground in Novato, going door-to-door in advance of working on the property. We had staff and volunteers handing out leaflets, letting people know about the development, meeting them one-on-one." Kilbridge also says he thinks there's a shift underway in Marin toward a greater acceptance of affordable housing. "I think people are more open to it now."

The economic meltdown that hit last year and the real estate collapse are playing a role in that greater acceptance, although whether that will change when the economy rebounds is another story. For now, the sight of foreclosed homes dotting neighborhoods is disconcerting for banks and neighbors--even in Marin. When Habitat proposes to fully rehabilitate a property, the attraction is obvious. It's easier for many people to accept Habitat and an affordable housing program that rehabilitates existing property than it is to open their arms to a new project that adds housing to an area. Affordable-housing advocates hope the warmth with which Novato has welcomed the Habitat project may signal a breakthrough in the county.

"I'm over the moon," says Thomas Peters, president and CEO at the Marin Community Foundation. "The symbolism of cracking through some kind of concrete ceiling made up of all the objections and ridiculous excuses and prejudices" should be acknowledged. "To have the symbolism of Habitat for Humanity, with its national and international reputation, coming into Marin" to break ground is a milestone toward acceptance.

The foundation has pledged to spend $2 million a year for five years on an affordable-housing initiative. This is the first year of the plan, and about half of the allocated funds will be used to purchase foreclosed homes and rehabilitate them. The foundation, which is working with Habitat and North Bay Homes on this initiative, already has contributed funds as part of other initiatives to projects for about 700 homes and apartments in Marin.

Although that's a fine record, the Habitat project is breaking ground in a new area: cracking the NIMBY mind-set, says Peters. "Instead of neighbors' voices raising questions about who these people are and what the deal is and what will it mean to the neighborhood, the voices in Novato are saying, 'Thank goodness this is happening. They're going to rehabilitate the neighborhood. It's going to be better for the neighborhood.' That's the systemic community change that really is our dream."

The Novato project is part of Habitat's Neighborhood Revitalization Program, which is aimed at buying foreclosed homes, rehabilitating them using sweat equity and then allowing a family to purchase them with a zero-interest, zero down-payment mortgage and 500 hours of sweat equity. Habitat includes provisions to keep the properties affordable if a family decides to sell.

In the 20 years that Habitat has been working in the Bay Area, it has had no foreclosures on rehabilitated properties. The Neighborhood Revitalization program of the Habitat for Humanity Greater Bay Area affiliate got off the ground in Menlo Park in a partnership with that city. Habitat and the city each put up $500,000 to begin purchasing and rehabilitating four foreclosures this year.

"We stayed in touch with the foundation since the inception of the Strawberry project," says Kilbridge. During a conversation about the situation in Strawberry, Devon Richardson, the Habitat regional director of real estate development, mentioned to a foundation official that nothing was moving in Strawberry because of the economy. He mentioned the Menlo Park project, and got this response: "Why not here?"

Richardson pointed out that in Menlo Park, the partnership provided essential funding. The bell rang, the light bulb went on and the foundation and Habitat brainstormed to figure out how to use some of that $2 million a year, resulting in the first successful Habitat foray in Marin.

Habitat bought the Novato house for $215,000. Richardson said it had been on the market for $279,000, which he says was "terribly overpriced." The asking price dropped to $239,900, and Habitat offered $215,000. Richardson says Habitat generally likes to purchase properties at $350,000 or less. The Novato project will take about $150,000 in materials to complete, according to Richardson. That figure doesn't include volunteer time. Real estate agent Arundel Burrell rebated his commission on the Novato property, bringing the total purchase price to $215,000. The foundation contributed $250,000.

And another partnership is in the works. Habitat is in serious negotiations for a home "in central Marin," says Kilbridge. He refrains from giving any details about exact location, but he will say the property is in escrow, although Habitat might ask for a price reduction because it appears it will need considerable work to rehabilitate.

In addition to working with Habitat on the Novato property and the second project in central Marin, the foundation also is working with community banks in the county and possibly San Francisco to create a plan to buy more distressed homes. The foundation, according to Peters, is talking with the Suburban Alternative Land Trust and organizations like EAH to identify distressed homes and create projects to rehabilitate them and return them to local housing stock as affordable units.

The foundation considers its affordable housing programs as a kind of leverage--financial, philosophical and societal. The experience in Novato could be a real boost for future affordable housing projects. Not surprisingly, the reaction in Novato has people glowing.

"It was a wonderful groundbreaking ceremony," says Jeanne MacLeamy Novato mayor pro tem. "Novato is about to celebrate its 50th anniversary. In my opinion, Habitat strengthens what I call the small-town feeling of Novato. It does that by creating a partnership between nonprofits, business and community volunteers to help a deserving Marin working family."

Novato has a relatively large stock of affordable housing, says MacLeamy, and the path to getting that housing approved has played a role in getting people over the us-versus-them roadblock that so many affordable housing projects have faced. People are seeing a possible shift in long-held prejudices, and the Novato project, they hope, is a sign of that shift.

The recession may have contributed to that shift, as people who once felt above it all now see how close to the precipice they really are, and how important affordable housing is to a community--maybe even to their own families.

Richardson has seen the issues close up in his real estate development role for Habitat. He recalls a 1995 story about a proposed Habitat home in Marin that included negative comments from neighbors "that were just amazing." That didn't happen this time. "As more people become educated about affordable home ownership, and as they put a name to a face of a family," the stereotype drops. Improving a neighborhood by rehabilitating distressed property doesn't hurt.

Richardson says many people still don't understand the Habitat model. "They think we give away homes. They don't understand that these are real folks with a real mortgage."

To be eligible for the Habitat home in Novato, purchasers must be first-time homebuyers. They must be legal permanent residents or U.S. citizens. They must be a household of at least three members who have lived together for at least one year. The household must have an annual gross income in a range that falls between 40 and 60 percent of the average median household income in Marin. For a household with three people, that's between $34,840 and $52,260. Those numbers increase based on the number of people in a household. For instance, a seven-person household must have an income between $48,020 and $72,030.

To learn more about the Habitat project in Novato and its eligibility requirements, and to receive an application, interested people can attend an orientation meeting Saturday, Nov. 7, from 10am to noon at the old Novato Human Needs Center, 1907 Novato Boulevard. Habitat will choose a household for the Novato project by the end of the year. The home should be ready for occupation in the spring.

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