By Susan Bond

This week’s blog post takes a fun look at manufactured housing in media:

One Week is a 1920 silent film by Buster Keaton. Keaton was a vaudeville actor turned silent film star and comic genius. It was the first film released by Keaton on his own without Roscoe “Fatty” Arbuckle.

A still shot of One Week.

The 1920s saw the peak of many technologies, including film and housing. At this time, prefabricated homes had reached a high point and were sold through Sears, Roebuck and Co. Ford’s innovation process for factory assembly lines helped make prefabricated housing more efficient, and the model is still used today.

One Week was a parody inspired by the industrial documentary Homemade by the Ford Motor Co., which explained what a prefabricated house was and how a buyer can assemble the home themselves with instructions.

One Week tells the story of a young couple coming home from their wedding to build their own DIY prefab house in, you guessed, one week’s time. A rival tries to thwart their marital bliss by renumbering the crates and altering the homebuilding instructions. As a result of this jealousy, and the amateur carpentry skills of the groom, the prefabricated home suffers from serious engineering blunders.

Watch “One Week” starring Buster Keaton.

By Susan Bond

We’d like to put our Network Member, Primavera Foundation, in the spotlight this week.

Primavera Foundation is a nonprofit based in Tucson, Arizona, whose mission is to provide pathways out of poverty through safe, affordable housing, workforce development and neighborhood revitalization. They have an interesting history that begins with their founding in the early 1980s as St. Martin’s Soup Kitchen. The neighborhood filed a lawsuit against the soup kitchen, and the organization fought all the way to the Arizona Supreme Court, but ultimately lost and had to close down. From there, Primavera morphed into an organization whose work addresses all aspects of social justice for the poor. In spite of their obstacles, all the hard work and persistence has paid off, as Primavera recently celebrated their 30 year anniversary.

Mural in Primavera’s office. Source: Next Step

Their mission to provide affordable housing stems from working to fight homelessness, but also includes working with individuals and families to achieve economic self-sufficiency through programs focusing on survival, stability, security and sustainability. Primavera brought this vision to the network when they joined as one of Next Step’s founding members in 2010. Since them, they have helped lay the foundation for the growth of the network while supporting families in their community to become homeowners with quality, energy-efficient Next Step Homes. We recently shared the inspiring story of one such family, the Ortiz Family.

Peggy Hutchison, Primavera’s Executive Director, said of the value of being in the Next Step Network:

“Our membership in the Next Step Network has had a tremendous impact on Primavera’s capacity to develop high quality, affordable, accessible, sustainable homes for hard working families in our community. Next Step has provided us with top-notch technical assistance, training, and brokering with the factory building industry while also responding to the needs and assets of our regional market and local neighborhoods. Our partnership with Next Step has enabled Primavera to make a difference in the lives of families while adding value to neighborhoods.”

We’d like to thank Primavera for their contribution to our network, and to applaud them as they celebrate 30 years of serving their community. Keep up the amazing work!

To connect with Primavera, visit their Facebook page at https://www.facebook.com/PrimaveraFoundation?fref=ts

Since it’s National Volunteer Week, we’d like to highlight Susan Bond, Next Step AmeriCorps VISTA, and get her take on the value of volunteering.

Susan Bond, Next Step AmeriCorps VISTA

Susan comes from Kingsport, Tennessee. She received a full tuition scholarship from Berea College and graduated in 2008 with a B.A. in Theatre. As a student, she participated in an undergraduate research project studying Bunraku puppetry in Japan and dramaturgy research on gender in Elizabethan theatre in England. Susan received several grants to pursue further academic research, travel and present at conferences. She was a member of honor societies that promote the arts and education, and she co-founded a community service organization for women in theatre. She participated in over 15 productions in the theatre lab in positions ranging from director, stage manager and actor to playwright, design and scenic construction. Susan was a student manager at Media Studies, and was involved in media design, video production and managing equipment.

After graduation she collaborated with Sustainable Berea doing grant research and marketing, and then worked for the Kentucky Environmental Foundation doing fundraising and energy education. Susan then lived abroad for a year, working in Paris, France as an au pair and attending the Institut de Langue Française. Susan moved to Louisville in September 2010 to serve in AmeriCorps with a program called REACH Corps that mentors students in Jefferson County Public Schools and began grad school. She is currently earning her M.A. in English at the University of Louisville and is expected to graduate in spring 2013. While in Louisville, she held an internship with the Democratic Party Reelection Campaign doing social media, research and recruiting volunteers. She has also worked as both a private and public school tutor, and volunteers with Actors Theatre and the English Conversation Club for English learners at the Louisville Free Public Library.

At Next Step, Susan is an invaluable member of our team building capacity around communications, fundraising, marketing and training. She has helped to grow Next Step’s social media presence, expand our resource development strategy with research and grant writing, and will provide support through market research and training development for our Network Members.

Here’s Susan’s perspective on the importance of volunteering and the AmeriCorps program:

This is my second year as an AmeriCorps volunteer. I worked with another AmeriCorps program doing direct service, mentoring elementary school kids. My AmeriCorps VISTA position at Next Step has helped me see the administrative side of a nonprofit. I get to learn about the infrastructure of running an organization, and even better, since Next Step is a startup, I get to see that play out as well. Since Next Step is a national network, I’ve gotten to learn about other nonprofits, travel, attend conferences and meet some very exciting people who share the same values I hope to live up to as well. Next Step works for affordable housing solutions, so I’ve gotten to learn specifically about what it takes to build and finance homes, which is a lot of work. Studying theatre, I had a job constructing sets. One of our sets was a rather ambitious front of a two story home with a roof and porch. That experience helps my imagination and gives me a practical appreciation of the work that goes into it when I see our projects in development. Other parts of my work with Next Step are social media, writing blogs and grant proposals. I’m also going to start working on our marketing and training materials this summer.

AmeriCorps provides nonprofits will lots of support that they otherwise couldn’t afford. Due to budget issues, AmeriCorps programs are probably going to undergo a cut soon, and I think that would be a mistake. Apart from helping nonprofits, I’ve learned so much in my terms, and gotten a lot out of it in experience, skills and benefits. As a student with some debt, AmeriCorps has helped me pay off my loan and have a steady job without the pressures of wage labor. I work in a highly-skilled environment with access to networks, training opportunities and a foot in the door for a job at a nonprofit. One of the biggest benefits offered to AmeriCorps volunteers is the Education Award, so I feel like the program is geared towards students in that sense.

I think some people are turned off to volunteering or to AmeriCorps because it doesn’t pay much. Some people want to do some sort of service before taking a higher-paying job. I try to internalize all the values from volunteering. I know what civic engagement and fighting poverty really entails, which means looking at the job I have now in that context as well. Because AmeriCorps are paid a stipend equal to the poverty level, it’s hard sometimes to see this job as volunteer work. Often “volunteer” work happens part-time on the side for free. On a basic level, people can only volunteer insomuch as they have the extra time and energy to work without pay, so it would be impossible to be a full-time volunteer under those conditions. Still, I think AmeriCorps helps you challenge the assumptions about what you really need and want out of life. Even though I could be lumped into the poverty category in the 10th percentile of earners, I get health benefits, Next Step offers housing assistance, all AmeriCorps qualify for SNAP, and I just finished my M.A. with which the Education Award will be applied. I know that I have some things that people who are forced to live at the poverty level all their life don’t have. Still, since I’ve graduated with my B.A., this is the best job I’ve had in terms of benefits and work conditions in the U.S., which is indicative of the student debt, education and work crisis unfolding from the recession.

Being an AmeriCorps volunteer had really helped solidify the ideals I want to live up to. Your level of profits or personal salary is often associated with your value, because money is how we measure our worth. On the flip side of that equation is how we “rationalize” labor value, or compensation. We tell ourselves that some people work harder, so we “deserve” to buy more things. Our work and reward system is skewed. It also poses the questions of whether or not people really love their work as it benefits the community or the paycheck. We can’t raise everyone’s income and buy our way out of an unsustainable economy. We have to change the things we buy as much as how much we buy. The “standard of living” couldn’t be supported if everyone in the world lived an American middle class life. By using a phrase like distributed consumption rather than distributed income you have to take a look at what the earth’s resources can support, and what humans need to be healthy. That part of the economic equation is overlooked.

That’s the part I love best working at a nonprofit, there is intrinsic value in the work because we look at economic solutions that prioritize the reality of basic needs and rights of the community as well as the individuals who make it up. By taking a vow of poverty while working on skilled projects, the AmeriCorps program embodies that complex system of values that I think is part of the solution. You give what you can to create a sound, sustainable system and challenge yourself to take only what you need. It also promotes creativity and resourcefulness rather than buying so-called solutions. To me, being a volunteer or having a low income isn’t a sacrifice, the alternative is the sacrifice.

By Susan Bond

For millions of American families, factory-built housing is the least costly alternative to purchase quality homes. At Next Step, we embrace the advantages of the factory-built process that drive down time and cost to deliver homes that balance quality with affordability. Our homes are built to meet or exceed ENERGY STAR standards and placed on engineer-designed FHA Title II permanent foundations.

Unfortunately, manufactured homeowners are discriminated against in many ways. Their mortgage financing is harder, their choice in where they reside is harder, and they find themselves outside an efficient real estate market system that discriminates when they sell their home. Federal, state and local programs that are designed to help families buy homes make it more difficult for manufactured housing to be an affordable housing solution.

Modular home crane-lifted onto foundation. Source: CRHDC

We made the decision to focus on quality because we know that by making upgrades like ENERGY STAR construction and permanent foundations, the likelihood of appreciation increases, thus building wealth in addition to saving a substantial amount in energy costs. The homeowner is also eligible for preferred real estate mortgages and can save money over the life of the loan; and when the homebuyer decides to sell their home, the next buyer qualifies for the same government-backed financing.

Today, our homes can be financed for 30 years at 4% versus the current industry chattel loan product of 20 years at 12%. The up-front cost of the permanent foundation adds approximately $5,000 to the cost of the home, but the payback through interest savings over the life of the loan can range from $60,000 to $115,000. Furthermore, the up-front cost for an ENERGY STAR upgrade is between $2,000-4,000. However, energy cost savings will pay for this upgrade within 5-10 years. When replacing pre-HUD Code mobile homes, an ENERGY STAR certified home is typically 65% more efficient than the home it is replacing. With the factory cost at $32,000 and total development at $65,000, the combined energy and $60,000 in interest savings over 30 years nearly pays for the initial cost of the home.

Modular home crane-lifted onto foundation. Source: CRHDC

While the foundation is central to the appreciation of factory-built housing values in terms of guaranteeing fair, fixed-rate financing, it is also central to important aspects of environmental and financial sustainability. A high-quality permanent foundation improves the lifetime performance of the home, its energy-efficiency, longevity, durability and aesthetic appeal. Permanent foundations also provide comparable safety features as site-built homes, such as protection from uplift during severe weather.

At its core, this principle ensures that Next Step Homes can open the door to homeownership for more families, and once in the door, rest assured that their home is well-built and will provide a safe place for them to grow.

Stay tuned for the next post in our Next Step System Series: Life-cycle pricing that is transparent to the nonprofit and to the homebuyer.

By Megan Neff

Since the end of last year, our Network Member in Eatontown, NJ, Affordable Housing Alliance, has been rebuilding their community after Hurricane Sandy stormed through. As you know from our previous update, part of this rebuilding is taking place in the Pine Tree Manufactured Home Park. Here, 17 lots were designated as sites for emergency housing, with AHA and the Robin Hood Foundation rising to the task of filling them with homes. From Robin Hood’s $1 million donation, AHA purchased 17 new Next Step Homes, two of which are the SAGAN prototypes we discussed in an earlier blog post.

Due to the speed of the factory-built construction process, the project is moving ahead full-steam and several families displaced by Sandy are already in their new homes. Here are two videos of new homeowners:

• Kaneisha Wilson – read the full story HERE. Source: Robin Hood Foundation
• Mary Brooks – read the full story HERE. Source: NJ Today

Our President and CEO, Stacey Epperson, visited last month to see the new homes and meet with funders, other organizations working in the area, AHA staff and Board Members. During her visit, she learned a few things that the videos above don’t discuss. Pine Tree is deed restricted in perpetuity for affordable housing, which increases the value for resale of homes, and to date AHA has invested $1.5 million in infrastructure improvements. Along with community partners, they have built a new playground, upgraded the electric and water systems, and made sure all homes were sprinkled.

Due to the high-cost of renting in AHA’s service area and the numerous properties destroyed by Sandy, Pine Tree is a valuable source of affordable rental housing. However, renting is not the only option for potential residents of the community. AHA’s program allows a choice between renting or owning.

As with all Next Step Homes, the homes in Pine Tree have been built to meet ENERGY STAR certification and high-standard specifications.  As Donna Rose-Blaze, CEO of Affordable Housing Alliance, told the group on Stacey’s visit, there was virtually no cost for these upgrades that will result in huge energy savings for the residents, “That’s the beauty, because of Next Step, it didn’t cost any more. The network negotiated the best price for us.”

By Susan Bond

When a potential homebuyer comes through the door of one of our Network Members, we want to make sure they are thoroughly prepared for such an important purchase. To do this, we require each Network Member that sells a Next Step home to use homebuyer education programs that meet the National Industry Standards for Homeowners Education and Counseling, such as NeighborWorks America’s Realizing the American Dream and eHome America.

Our Network Members are well-prepared for this, as many have homeownership centers that provide oversight to in-house construction, lending and homebuyer education services. This is what a typical process might look like:

• When the homebuyer enters the center, they receive support from counseling and lending staff.
• Once pre-approved for a loan, the buyer can make the choice of purchasing a factory built home, site-built home or existing home. Network Members provide the basics on manufactured housing, help determine if a manufactured home is right for the client and explain who’s who in the manufactured home purchase process. Our education principles also ensure that homebuyers know the proper siting and foundation system for the best loan.
• Once the loan is approved, the construction managers typically order the home and subcontract the installation. Homebuyers are educated to understanding the process of how the home is built, and who is in charge of what link in the chain until the home is finished and the client is handed the key.

Josh Trent of Frontier Housing with Next Step Homebuyer, Phyllis Kelley. Source: Frontier

Access to fair, fixed-rate home financing is essential to healthy housing markets and the capacity to build wealth through homeownership. At Next Step, we work to ensure that homeowners served by our Network receive fair, fixed-rate financing by designing our homes to meet lender requirements, allowing for a better initial mortgage and increasing the potential for successful resale of the home.

Comprehensive homebuyer education and support for the homeowner over the life of the loan reinforces this access to responsible financing. A recent study from NeighborWorks America discovered that homebuyer counseling significantly lowers default rates, and that borrowers who went through counseling were a third less likely to fall behind on payments in the first two years after closing. In this study, and in stories throughout our Network, it is clear that homebuyer education programs help lower-income clients build up the skills needed to successfully purchase a home and sustain it financially.

Look out for the next blog in this series that will address our second principle: Quality, ENERGY STAR homes on permanent foundations – FHA Title II permanent foundations required for real estate mortgages.

By Susan Bond

Factory-built housing is becoming increasingly popular on a global level both for its efficiency and ability to reach remote areas, and as a response to the increasing cost of homeownership, lack of available space and persistent poverty despite technological advancement.

China

China is a great example of a country that is dealing with a large population and high rates of poverty alongside fast-paced development and strides to become a global leader. They have embraced innovations in factory-built housing in recent years, most notably in the Broad Group’s plan to build the world’s tallest building in 90 days using modular construction.

Netherlands

With new technology, even 3D printing may have an effect on home design and development world-wide. This is being explored by a few countries, one being the Netherlands. 3D printing allows users to print off plans, so that one only needs the materials. The components can be built without skilled or paid labor, and the cost of the materials would be the only expense. 3D printing uses layers to create an object, so the limits of traditional shapes are no longer a construction problem. This saves on waste as well, since the components are intentionally made rather than being cut from wood.

India

The Block House, a modular home designed specifically for slums in India, is built to be mobile so that families can carry the panels and build it themselves when and where they want it. You can recycle the panels, add more rooms, or disable the home and transport it if needed.

Sweden and the United Kingdom

Factory-built housing is also gaining popularity in Sweden, where most recently IKEA partnered with BoKlok to manufacture flat-packed factory-built homes, along with IKEA’s flat-packed modular furniture that has provided affordable options for interior design. These BoKlok homes might also become a solution for the United Kingdom, which is experiencing a housing shortage. This wouldn’t be the first time factory-built housing would be used to fill housing gaps in the UK. After World War II, factory-built housing was used to meet the demands of veterans, replace buildings damaged by bombing, and address the issue of slums.

Third World Countries

The third world has a unique set of challenges because they often lack any social and economic stability. In light of famine and AIDS, housing is often temporary, under sourced, and not designed with long-term relief and infrastructure in mind. There are many concepts for quick, factory-built housing solutions like this and Engineers Without Borders is one group that tries to foster such solutions. Some of their projects include building sanitation infrastructure for water, building school houses for children, and using precast concrete panels to build bridges. The Arial Foundation was an International EWB member whose project was to create micro-factories employing locals to make modular panels of steel, fiberglass and insulating foam. With these prefab panels, the homes could be constructed in less than one day. Their project had to close, but they have all their designs here.

Refugees and Natural Disasters

Factory-built housing is also often used for displaced persons in the midst of turmoil, economic and natural disasters, and Global Village Shelters is one such example. Global Village Shelters is a new response to using the innovation of factory-built housing for social good, most directly addressing slums in third-world countries. Global Village Shelters are currently used in Haiti, one of the poorest countries in the world and affected by recent severe natural disasters. Although factory-built homes are often used after natural disasters, the challenge is to find investors willing to build higher-quality, permanent housing that provides an opportunity for long-term wealth building.

There is a great opportunity for factory-built housing to ignite community development. Removing slums, and rebuilding homes and business with speed and efficiency, has the potential to transform communities. While it’s important to take into account local knowledge and local materials, these examples and many more demonstrate how the organizational design of the factory-built process can be applied to a struggling community to change lives by making housing more flexible, affordable and accessible.

A new study from CFED, Toward a Sustainable and Responsible Expansion of Affordable Mortgages for Manufactured Homes, reports findings from analyzing actual loan performance data —accounting for more than $1.7 billion in manufactured home mortgages – from a number of state Housing Finance Agencies, credit unions and other sources. Download the Executive Summary and the full report.

Surprising findings from the report include:

• Mortgage performance for manufactured homes is comparable to that of similar site-built homes
• Some manufactured home lending portfolios actually outperform mortgages for comparable site-built homes
• Mortgages for manufactured homes can be made with low downpayments and alternative credit (not necessarily top-tier FICO scores) and still perform well

Data were compiled by a two-year effort of the I’M HOME Loan Data Collection Project, part of Innovations in Manufactured Homes (I’M HOME), a national initiative managed by CFED which weeks to ensure that owners of manufactured homes have the opportunity to build wealth through homeownership. The Data Project and the Uniform Manufactured Housing Act effort beginning in many states are among efforts to expand affordable mortgages – as an alternative to higher-cost chattel loans – for manufactured homes.

The report’s authors, Howard Banker and Robin LeBaron of Fair Mortgage Collaborative, lay out the report’s methodology and findings in detail. The report also contains a detailed list of recommendations for systemic improvements that will make low-cost, high-performing mortgages more available to owners and buyers of manufactured homes. Lenders, investors, GSEs, Housing Finance Agencies, federal agencies, housing and finance organizations will find the report essential reading.

By Susan Bond

Next Step is on a team that’s one of four finalists in the Lowering the Cost of Housing Competition! The competition, co-sponsored by Deutsche Bank and Enterprise, prompted entrants to submit innovative designs that support the creation of affordable housing developments and address the issue of lowering cost.

Austin Community Design and Development Center, leader of our team, made the final four for their proposal of “Alley Flats” on single family lots. Also known as accessory dwelling units, granny flats or garage apartments, alley flats are small detached dwelling units located in the back yards of single-family lots in Austin’s urban core.

Source: ACDDC

The objective of the Alley Flat Initiative is to create a flexible and self-perpetuating delivery system of green and affordable housing in Austin. This delivery system would include not only efficient housing designs constructed with sustainable technologies, but also innovative methods of financing that benefit all neighborhoods in Austin. Alley flat development is a way to incrementally increase the supply of housing without disrupting the neighborhood character or social fabric.

The entire ACDDC team is comprised of the Austin Community Design and Development Center; The Alley Flat Development Company; Next Step Network; the Chestnut Neighborhood Revitalization Corporation; Foundation Communities; Heather Way, Director of Community Development Clinic at the University of Texas School of Law; Scott Marks, Director of Affordable Housing at Coats Rose; The University of Texas Center for Sustainable Development; and the Furman Center for Real Estate and Urban Policy at New York University School of Law.

Learn more about ACDDC: http://www.acddc.org/
Learn more about the Alley Flat Initiative: http://www.thealleyflatinitiative.org/
Learn more about the Lowering the Cost of Housing Competition: http://loweringcost.com/

By Susan Bond

Tiny houses are a big trend now due to a push for energy efficiency, the high cost of homes, and a decreasing availability of space and land.

The article, “The 400-Square-Foot Dream Home,” summarizes this new interest in micro-homes and for some, tiny homes, describing it as “a fringe offshoot of the anti-McMansion trend.”

There are social consequences to wanting an ever-expanding private estate. Small Home Oregon, a home manufacturer, states on their website that a well-built 1,000 square-foot older home can use less energy than a 2,400 square foot energy-efficient home. In spite of the green housing trend and the push for energy-efficient homes, the size of those same homes may make them inherently less environmentally-friendly. Walt Quade, designer for Small Home Oregon, states that “(We are) the most consumptively housed people in the history of humanity.”

It’s hard to disagree with Quade when you look at the facts of the contemporary housing market. In the United States, during 1950 the average home was 983 square feet, with an average house size of 3.37 people, providing an average of 292 square feet per person. In 2006, the average home was 2,349 square feet, for 2.61 people, providing 900 sqare feet per person. Source: www.100khouse.com/2008/10/20/so-many-square-feet-so-few-people

To frame it in a global context, in many other countries, the square footage of homes per person is much lower:

Source: Washington Post

The average square footage per person in China is one of the lowest, and on the extreme end is a new modular tiny house that can be attached to a bike, which recently entered the market. This is the smallest home I’ve come across that is also equipped with water and some form of heating.

Tiny houses, which are 500 square foot or smaller, shouldn’t be viewed simply as over-correction of the American tendency to super-size life. The benefits of a smaller home are numerous: they offer the opportunity to downsize, create a lifestyle of simplicity, and offer more time, money and energy to spend on other interests. It forces the owner to live intentionally and create a space that consciously reflects their needs and wants. It also forces the owner to think about design and organization, which requires a mindset of long-term planning.

Thoreau’s home by Walden Pond.

Henry David Thoreau advocated for a simple life, and his time spent in the woods was a direct response to affluence and materialism. Thoreau said, “A man is rich in proportion to the number of things he can afford to let alone.” The tiny house philosophy is just this: rather than waste on a large house full of objects of distraction, high maintenance, cleaning, and worrying, a tiny house lets you focus on yourself and others, cultivating life in a deeper, more meaningful way. It eschews the clutter and consumer excess of contemporary life, so that we may have the freedom and space to live a life full of nature, reflection, and discovery.

You don’t have be so philosophically minded to see the fiscal benefits of living in a small home, though. The cost of building is just the start, with many homes costing as little as 20,000. You can also find floor plans and do it yourself for as little as the cost of the raw materials. Most of the cost from building a tiny home comes from the infrastructure of having bathroom and kitchen plumbing. You can install it on a permanent foundation, or put it on the back of a trailer and hit the road.

Perhaps with the Tiny House trend, you can get the best of both worlds: an affordable home, perks of homeownership, a home you can move with if you like to travel or buy some land and set up your own utopia.