Thrift stores for building materials ride the re-use wave

Frugal, environmentally conscious consumers are discovering a fourth "R" — reduce, reuse, recycle and rebuild.

With most of the nation's housing stock now 30 years or older, legions of homeowners are updating kitchens, remodeling bathrooms and updating lighting and floors. In Minneapolis, where the average age of homes is nearly 40 years, two nonprofits selling used building materials have recently opened a block away from each other — Habitat for Humanity ReStore and Better Futures Minnesota ReUse Warehouse.

"On the one hand we've got a person on Lake Minnetonka taking out hardwood floors and cabinetry and on the other is a millennial who wants to give new life to old things," said Nick Swaggert, vice president of business development and operations at Better Futures.

Many retailers are struggling to compete with the convenience and often lower prices online, but home improvement retailers like Menards, Home Depot and Lowe's are sheltered somewhat because their items are often too bulky or too "hands-on" to order online. "Home improvement retail is very much a bright spot in an otherwise weakish consumer environment," said Brian Nagel, a senior equity analyst at Oppenheimer.

With many homes over 30, trend experts expect homeowners to tackle remodeling projects as long as the economy remains strong. Thrift stores such as Habitat ReStores, now at 875 locations nationwide and 15 in Minnesota, are riding the wave too. Sales at the new location, which opened in September, are exceeding expectations. "Our New Brighton store is doing $1 million a year, and we hope the Minneapolis store will match that in two or three years," said Pete O'Keefe, senior manager of operations at Twin Cities Habitat for Humanity.

Simon Johnson, 27, of Minneapolis shopped the new store last week for a used washer and dryer. "Why pay new when there are some great older pieces of good quality?" he asked. "I believe in recycling instead of tossing."

Customers can find a hit or miss assortment of kitchen cabinets, paint, doors, lumber, appliances, lighting, furniture, windows, trim, plumbing and furniture at the home improvement thrift stores.

Prices on used goods are 50 percent to 90 percent less. New items show up too. Just as some clothing thrift stores augment their used items with new socks or jewelry, ReStore buys new goods such as prepackaged nuts and bolts.

They also network constantly for samples or overstocks. Valspar, Lowe's and kitchen remodelers have made recent contributions. Mark Lampman, a longtime customer in New Brighton who became a Habitat for Humanity volunteer, has purchased items for his home, rental property and his daughter's place. "I like to remodel, so I've added a deck, a second story on a house, a kitchen set, new appliances from a model home, a backyard greenhouse, slider doors and commercial skylights," he said. "I've spent $1,600 for stuff that would've cost $10,000 new."

The New Brighton ReStore was barely breaking even for several years after the recession, but O'Keefe attributes recent success to the quality of the donations. "When you get great stuff instead of average stuff, customers find you," he said. Seventy percent of revenue comes from contractors, he said.

Habitat can build six homes a year with revenue from the donations sold at ReStores.

O'Keefe said it's vital to get good donations to keep building new homes, which are built by volunteers with new materials. Habitat ReStore is one of the few charities that still picks up donations free at a resident's home. But it's an expensive perk, one that Habitat evaluates annually. Thirty percent of donations are picked up from residences with the rest dropped off.

Success is not a given. The ReUse Center closed Minneapolis and Maplewood locations in the last five years. The cost of deconstruction, a lack of grant support and spending too much money on a new warehouse have been given as reasons for the closures.

Better Futures Minnesota, which opened a building materials warehouse a block away from the new ReStore, uses demolition crews to remove reusable building materials in homes throughout the Twin Cities. Revenue from the sale of deconstruction materials has nearly doubled since the move to the new location nine months ago. The company provides housing and employment to men recently incarcerated. "We've saved 700 tons of building materials from going into the landfill," Swaggert said.

He said Better Futures evaluates all demolition jobs. "We look for value-added jobs that will generate revenue on the sales end," he said. Both Habitat ReStore and Better Futures Warehouse pick up donations at residences, but Better Futures charges $150.

Charities struggle with the decision to charge for picking up donations. Often they don't produce enough revenue to make it worth the trip. The company can try to weed out items such as entertainment centers and worn carpet but it's too expensive to send drivers out to collect items no one will buy.

Sometimes the rejects are items that owners weren't able to sell or give away on their own so they turn to charities. Angela Quale, co-founder of the Professional Rebuilding Outlet in Crystal, a for-profit business, said she works harder to get good merchandise compared to a few years ago. "A lot of homeowners want to sell it themselves on Craigslist, Facebook, eBay or apps like Letgo and OfferUp," she said.

Swaggert said deciding what will sell means continually looking at what the market wants. "We don't want to put it in the garbage," he said. "Recycling is better but repurposing is the ultimate."

John Ewoldt • 612-673-7633