It is not a secret that the construction industry is riddled with inefficiencies. It is the nature of the business when you are building, you always need to plan to have a little more instead of a little less when creating buildings. With that in mind, have you ever wondered what happens to for-profit housing providers' excess building materials at the end of projects? What happens to building materials when manufacturers create a product that can't be sold due to defects?
This article is aimed at discussing the process of diverting excess building materials from the landfill and into the deserving hands of not-for-profit affordable housing providers, and how the Future of Housing Alliance is well-positioned to help in creating this marketplace.
The Concept: Donate Excess Building Materials in Canada
With our current research completed, we have yet to find a company that has effectively created a supply chain from developers and home builders to not-for-profit housing providers in Canada (if anyone reading this can point us to an organization doing this we will be happy to review). If this theory is true and there is no effective supply chain between for-profit and not-for-profit housing providers we believe there is a huge opportunity to create one. The idea is to give for-profit housing providers to donate excess building materials in Canada.
The concept is simple but effective, as outlined in the below list:
For-profit Builder or Developer has excess building materials that would otherwise be brought back to a warehouse to sit around or will be thrown out.
For-Profit Builder or Developer takes inventory of the excess materials (i.e. extra tile, extra flooring, etc.) and sends the amount to a not-for-profit organization aiming at creating a marketplace for excess building materials (i.e. FHA or another not-for-profit organization).
Since there is a value associated with the excess building materials, the for-profit builder can donate the materials and collect a donation receipt for the value of the material (assuming that the organization they are donating to is a registered charity).
The registered charity then identifies not-for-profit housing providers who are in need of discounted building materials.
The registered charity then sells the excess building materials to the not-for-profit housing provider at a discount or for free plus delivery charges.
Benefits for a for-profit housing provider to enter this program
There are a few benefits for a for-profit housing provider to enter into a program like this, namely:
Public Relations and Media Exposure by doing the right thing and becoming a more sustainable company
Offsetting the company's carbon footprint by avoiding sending building materials to the landfill
Directly benefiting local or national affordable housing projects and being part of the housing affordability solution
Donation receipts for the excess building materials will help the company's balance sheet and financials
Benefits for a not-for-profit housing provider to enter this program
For a not-for profit housing provider, the main benefit of joining this program is they will get access to low-cost building materials in order to lower the overall cost of construction. This will allow more affordable housing projects to start and hopefully increase the stock of affordable houses across Canada. This may also allow for better living situations because if it costs less to remodel existing units then more updates can be made to existing units.
This Concept Versus Habitat For Humanity Restore
It is important to highlight the differences between this concept and the already-established concept of Habitat for Humanity Restores. The Restores are a great concept but their target audience is a little different than this concept. Their concept is more of a Business to Consumer or Consumer to Consumer concept, whereby businesses and Consumers can donate their tools, building materials, and home goods to the Restore and any consumer or business can buy what is available.
The concept explained above is a strictly Business to Business circular economy concept, whereby the for-profit businesses are donating excess building materials to not-for-profit businesses, and the broker is the charitable organization (FHA or otherwise) that can help facilitate the transaction through a charitable donation receipt.
Conclusion
This concept at this point is more of a theory than an actual business model but it is something that the Future of Housing Alliance is looking to get feedback about from both the for-profit and not-for-profit housing providers. If you have any questions or would like to offer feedback about this concept to us you can reach out to ryan@fhacanada.org or contact us through our contact form!