Affordable Housing Project

This is an internal Better For Our Children project to explore the possibility of developing a large scale Public/ Private initiative to produce, assemble and sell large numbers of affordable apartments, townhouses and individual houses.

The following is a more detailed presentation of our Affordable Housing Project.

Overview Summary
Details Steps for Communities
Steps for Manufacturers Reduce Costs
Make Connections HGTV Hosts

Overview

This whitepaper describes ideas for public driven initiatives to spur the creation of new housing.  The US urgently needs housing that is affordable, clean and safe for those who are not in the top income brackets. It appears the housing that builders can make money building are no longer affordable for most Americans, which has resulted in far too few houses being created.  The mechanisms being proposed here are primarily public / private cooperation to develop and build affordable housing using local community driven policies and legislation in combination with encouraging further innovation with standardized prefabrication technology. If a community is unable to inspire a public / private partnership, then it may be left to that community to build and own the new housing.  The goals are to:

This whitepaper has been developed by the Better For Our Children (BFOC) organization, which is a New York State based policy institute working to provide solutions for the many major challenges facing our planet in the 21st Century. 


Summary

This section presents a summary of the key concepts and talking points for the large-scale affordable housing initiative (AHI).  Please refer to the Details section for a fuller description of the AHI.

The AHI has been motivated by the evolving housing crisis that exists across most, if not all, of the US. All types of housing are becoming so expensive and so limited in quantity, as to disrupt economic growth and disrupt the lives of countless Americans. Common factors driving this crisis are; the high cost of custom-built houses, the inadequate number of housing units being created for either lease (rent) or purchase, and the ever-increasing percentage of the average American’s income that must be spent on housing. That, in turn, takes away the funds available to the average American for basic necessities, education, and savings. The goal of the AHI is to reestablish the governmental sector as the primary engine for creating new and lower cost housing; primarily through public/ private initiatives, but where necessary via housing created by local government investment. The following sections of this document propose a series of complimentary policies and manufacturing innovations to dramatically increase the inventory of affordable rental and owned housing units.

The steps covered by this white paper include some for local communities to allow them to build prefabricated houses, some for the support of local builders, and others for the manufacturers of prefabricated houses to reduce manufacturing costs, assembly times and costs, and to support sustainable climate features. An optional step is to attempt an outreach to home renovation hosts and influencers to build support for this initiative with the public and the hosts’ local communities. Once these steps have been taken further steps are recommended to raise public awareness and interest in the AHI, which may in turn help encourage local communities to engage and support affordable prefabricated housing.

It is necessary to highlight the retreat of traditional private housing development to the high-end, or luxury, housing segment. This has been most obvious since the financial crisis of 2007/ 2008, following which there has been dramatically decline in housing created for the non-luxury segments needed for those in the US not in the top 5% of annual income. This startling fact, and the observation that this trend has been developing for decades, may mean that the best approach going forward is to have government at all levels take a hand in spurring innovation and funding of urgently needed affordable housing. Ideally, once a new model is established the model will be adopted by private developers as well. 

The following sections go into more detail with regard to the specific steps being suggested for implementing the AHI.

Steps In Detail

This section provides more detail on the steps being suggested for implementing the AHI.

Preparation

This section includes steps for preparing to meet with the communities and prefab manufacturers.

Steps for Local Communities

One of the most important parties needed for the AHI to get off the ground are local communities.  These are the places at which the pain and dislocation of insufficient housing is felt the most. While it is fine to promote support, and funding, for affordable housing at the Federal and State levels, it is at the local level where everything needs to come together. To successfully add meaningful amounts of affordable housing, communities need to; allow these types of structures, need to secure the support and participation of local builders and workers, need to make sure they are protected, need the support of local business leaders and communities, need to connect funding to builders and owners, and most importantly need to locate and make available land for affordable housing. Another important objective for reaching out to local communities is to identify and grow the potential market for the prefab manufacturers, which will be useful when they are contacted.
Work with community leaders to explore ways to repurpose existing residential properties to become higher density affordable housing. Possible methods might include reduced property taxes in exchange for agreeing to see the property to the community for affordable housing, or promoting civic minded property owners to voluntarily sell their properties.
It might be useful to search for communities which have been able to create meaningful numbers of affordable housing units, and if any are found then look for common factors behind their success.  A second tier of research might be to survey other groups seeking to promote affordable housing and again look for common ideas and approaches. Any positive findings can be folded into the recommendations in this white paper.

Working with Communities

Initial proposals to local communities might go to town or community governments, including both elected leaders as well as any departments or groups tasked with either affordable housing per se, or housing and property development in general. The proposals would include something like this white paper to present the overall concept of the AHI, as well as an addendum that might be tailored to that specific community in terms of what may already be in place, or may be blocking support of affordable housing.  If there is an organization in place to promote the AHI, it might try to arrange meetings with local leaders, local community groups and local businesses.
To identify those communities an initial outreach it might be helpful to identify communities which either are already have, or are actively introducing, policies and legislation to support the building of prefabricated affordable housing, or who have openly discussed both the consideration and need for affordable housing. 
The following is a checklist of items that could help the local community promote and successfully create meaningful amounts of affordable housing.

Identify Communities

The recommended approach would be to:

Contact Communities

With a list of communities in hand the next step for the AHI would be to reach out to communities across the country to share the approach outlined in this white paper and seek to establish a relationship to learn in more detail about the status of their efforts to develop new affordable housing capacity. After understanding their status try to offer support for the implementation of existing policies or to begin a process to propose new policies for affordable housing.

Items to Propose to Communities

This section includes specific policies and approaches that communities might consider for creating affordable housing initiatives.

Identify Sources of Funding

Following the initial contacts with communities try to get a handle on the funding needs and existing options identified by the communities.  In parallel with this activity search for and research additional public and private funding options.  Given how pressing the lack of affordable housing across the US there may be organizations and groups who have, or will be setting up, ways to financially support communities who are ready to address this issue.  Catalog the sources of funding and the eligibility criteria for each, so this information can be shared with the communities.

Revenue Models

This section discusses some possible models for how to manage the revenue generated by renting (and if allowed selling) the affordable housing units. Some options are:

Steps for Prefab Manufacturers

This section covers the steps being proposed for engaging with the companies who make prefabricated homes, and investors (governmental and private). The key steps include: assessing their overall interest in participating in a program such as AHI, current product offerings for manufacturers, incentives to make and/or attract stable long-term investment, ways to reduce the total costs of materials and manufacturing, interest in using public domain/ standard house designs and plans for promoting AHI and their engagement.

Overall Interest

Put the key question to a prefab manufacturer right away – would they be interested in participating in a program like AHI. If the answer is possibly or no, then review the AHI program and answer questions to try to persuade them. Otherwise move ahead to discuss steps which they might want to participate in, and define next steps. If the community outreach is far enough along, include a list of participating and potential communities to show the amount of interest in the AHI.
Approach and identify potential investors or entrepreneurs who are interested in establishing new ventures for creating modular and prefabricated housing.

Review Current Offerings and In Other Countries

Look over the manufacturer’s current housing products to compare their costs against both the average current costs and target costs. Also review the total budget for the end product to allow the manufacturer to get the whole picture required to end up with housing that is affordable.
Look at modular housing companies in Japan and Sweden, and other countries for guidance and best practices.

Research Ways to Reduce Housing Costs

Discuss with the manufacturer their willingness to adopt, and/or do their own research into, techniques for reducing the cost of housing products within the scope of AHI.

Interest in Common AHI Designs

Review the concept of using common designs for the AHI that will be made available free of charge to participating manufacturers, and the efforts that will be made to promote these standard designs via influencers and any AHI promotions that may be undertaken.  Also, the use of common designs will allow higher volumes for sub-component suppliers.

Research Ways to Support Sustainable Tech

Discuss any products or ideas the manufacturer has for supporting solar, wind, and geothermal energy sources with an eye towards adding these to the AHI catalogues, programs and promotions.

Connect Communities to Companies

Once there are communities and prefab manufacturers willing to participate in the AHI the next step is to get them working together, so the community builders can get presentations from the suppliers and request bids for their initial projects. This may be as straightforward as providing lists the appropriate groups, or perhaps holding some introductory conference calls to get the interactions started.  After this process begins there needs to be follow-up to track progress, identify issues and provide assistance when it would be helpful.

Steps for Renovation Hosts and Influencers

This section describes and idea to try to interest some well-known home renovation TV show hosts and influencers in supporting the AHI.  Their participation could include developing public domain housing designs for affordable, and comfortable, houses, promoting the AHI program and helping to engage their local communities in AHI.

Public Domain Housing Designs

One aspect of the AHI is to create numerous desirable designs which would be made available to the mass prefabricated housing manufacturing companies, royalty free.  The benefits of this approach are:

Promoting the AHI

See if the Home and Garden TV network (HGTV) can be persuaded to create a TV series using their experienced housing renovation experts to create and test out designs during the course of the series. 

Helping Engage Their Communities

Reach out to specific HGTV hosts about potentially leveraging contact within their home communities to see if they already support affordable housing or can be persuaded to participate in the AHI.