Habitat for Humanity of the Roaring Fork Valley is attempting to build a modular home manufacturing plant so that it can scale up its pace of affordable housing development and more aggressively combat the housing crisis rippling from Aspen to Parachute.
The initiative, for which Habitat is now seeking investors, aims to make a dent in the ever-worsening local housing shortage that is resulting not only in staffing shortages for the area’s dominant resort and hospitality industry but in the disruption of basic infrastructure like dependable school bus routes. Habitat estimates the housing shortfall just to meet local workforce demands at 4,000 homes and has concluded that a modular facility is its best hope to make a significant impact on the crisis by providing hundreds of affordable modular homes to qualified buyers in coming years.
Habitat’s Roaring Fork chapter broke from the nonprofit’s traditional volunteer-driven, one-house-at-a-time model in 2018 and began construction on its 27-home Basalt Vista development.
The first homeowners moved into the new neighborhood, on a sunny slope behind Basalt High School, in 2019 to great fanfare and the project won the local chapter national recognition. It spurred the local Habitat leadership to find even-larger-scale housing solutions and less-expensive construction than the $12.8 million Basalt undertaking.
They tweaked the Basalt Vista model for the Wapiti Commons project in Rifle, which broke ground in March using a thriftier panel-built construction that cost $7.8 million for a 20-unit development.
But to make a meaningful impact on the housing shortage in the resort-rich stretch of their coverage area, Roaring Fork Habitat leaders believe they need to scale up their production dramatically and to do it more efficiently.
So, this past spring, they began formulating plans to open their own local manufacturing facility to make modular homes.
“We feel to be able to respond to this crisis, we need to be building faster and making sure it’s affordable,” Habitat Roaring Fork President Gail Schwartz said in September. ”So, we are in the process of exploring modular construction here in our region in the Roaring Fork and Colorado River Valley.”
With $2.1 million in seed money, Schwartz told potential investors in a Nov. 17 pitch in Carbondale, Habitat could open its own modular manufacturing plant and build more than 600 affordable homes here in the next five years.
Schwartz and local Habitat leaders see the home-manufacturing undertaking as a replicable model for Habitat chapters across the U.S. as the organization seeks scalable solutions to the national affordable-housing crisis.
Making their own modular homes, they estimate, for a 20-home project comparable to Wapiti Commons would cost $6.2 million.
Habitat estimates that the modular approach would cut its construction costs significantly and preserve the ability to build net-zero energy-efficient homes on par with the award-winning Basalt Vista designs.
“That’s why we’re taking it seriously,” said Habitat attorney and former board member David Myler.
‘Dramatic change in approach’
Habitat has built 60 homes between Aspen and Parachute since the local chapter was founded in 1999. Until Basalt Vista, they stuck with the classic Habitat model of working with a potential owner to build a house together using volunteer labor and tradespeople.
With Basalt Vista, they committed to more aggressively developing housing for the middle-class being forced out of the Roaring Fork Valley. That meant raising funds to pay for professional construction crews, building on a neighborhood scale and partnering with a half-dozen local entities to get it done.
“This was the beginning of a fairly dramatic change in approach to providing housing,” Myler said. “This is the first time that we decided to just go ahead and build units.”
The Roaring Fork School District donated the 7 acres of land for the project — valued at $3.2 million — while Pitkin County and the town of Basalt waived fees for donated infrastructure such as roads and sewer hookups totaling about $3 million. A number of units were set aside for school and county employees. By the time the final residents moved in this summer, the neighborhood was a cross-section of the valley’s middle-class whose careers can no longer support buying or renting a free-market home. It included 10 Roaring Fork School District teachers, four from the Aspen School District, along with several school staffers, Pitkin County administrators, customer service reps from the Aspen/Pitkin County Airport, staffers from City Market and Whole Foods, a nurse, a chef and nonprofit administrators.
When Gov. Jared Polis visited the site in June 2021 to sign two affordable-housing-related bills, he declared Basalt Vista “a true model for Colorado and our country.”
Basalt Vista’s teacher-dedicated homes were reserved for household incomes ranging from 81% to 100% of the area’s median income, translating into $85,000 to $106,000 annually, while the rest were capped at 80%. Habitat follows the area median-income limits determined by the U.S. Department of Housing and Urban Development.
The Duncans, a family of four who won a 1,600-square-foot, four-bedroom townhome in the Basalt Vista lottery, had been in a typically precarious and stressful housing situation. Living in a two-room, school-district-provided apartment in Basalt’s Riverside neighborhood, Lyssa and Jeremy — an Aspen Middle School history teacher and county IT hand, respectively — had rigged a particle-board platform above the bathtub for their younger child’s crib because they had no place else to put her.
Walking through their airy Basalt Vista home this fall, Jeremy was grateful to have the kids — Willa, now 3, and Arlo, 6 — living in a room with beds and space for a small fish tank, and to have other comforts such as a home workspace, a porch and a garage.
They had played local housing lotteries for seven years and unsuccessfully attempted to rent and buy on the free market.
“We just didn’t have a solution,” Jeremy recalled of those discouraging and unsettled years. “When she was pregnant with our son, we had these conversations, like, ‘Do we stay or do we go?’”
They wanted to stay, having lived in the valley since 2009, met and married here, and developed professional community-serving careers. And yet those jobs weren’t lucrative enough to put an adequate roof above their heads after they began having children and outgrew their rented 450-square-foot studio apartment in Carbondale.
Looking out at Basalt Mountain through the story-high panel windows of their Basalt Vista kitchen/living room, Jeremy recalled the day they won the lottery: “It was shock, disbelief, happiness, elation, fear — maybe in that order, maybe all at once.”
They had spent a day volunteering with Habitat’s Basalt Vista construction crew even before they won the lottery, excited to be a part of making the new neighborhood come to life. When they moved in, the couple made a spreadsheet to keep track of the 500 required Habitat volunteer hours that came as part of the deal.
Over the next nine months on weekends, they alternated caring for the kids, joining Habitat “build days” and working retail shifts at the Habitat ReStore in Glenwood Springs. Jeremy spent a day sand-blasting the floors in his neighbor’s house as it neared completion and another day caulking trim and corners. The sweat equity helped the neighbors bond in the neighborhood’s early days.
“I think there is a little bit more connection because of that shared experience,” he said. “I think there is a higher level of appreciation.”
Providing that kind of sustainable housing and fostering that kind of community are what Habitat aims to do. Building housing for ownership is a “system changer,” as Schwartz termed it, with a litany of social advantages. But replicating Basalt Vista would not be easy.
Construction costs totaled $12.8 million, or $473,500 per home. Factoring in the value of donated land and infrastructure brings the total to $19 million, or $703,000 per home. Habitat sold the places — two- to four-bedroom townhomes — for between $295,000 and $370,000.
So, for each home, Habitat was taking at least a $125,000 loss.
“We lose a lot of money in the sale,” said Schwartz.
Because of Habitat’s commitment to sell to families at or below 80% of the area median income, she said, residents in Habitat-built properties would be paying as low as one-third of what they might on the free market. The net-zero construction – put in place with donated assistance from Holy Cross Energy and CORE – has residents paying an average $14 per month in total utilities.
Habitat covered the $125,000 per-home Basat Vista subsidy with the help of private donations and grants. But the local leadership recognized that subsidies so large weren’t sustainable if Habitat wanted to build more projects of Basalt Vista’s scope and wanted to play a meaningful role in solving the housing crisis.
“We need to reduce our subsidy so that we can build at scale,” Schwartz said.
She told potential investors at Coventure, a Carbondale-based nonprofit venture capital investment firm, that the modular facility would cut the $125,000-per-home subsidy in half and that Habitat would provide twice as many homes with the savings.
Building more developments in the pricey Basalt Vista mode would be doable for Habitat with enough funding from grants and donors to cover the subsidies. But there is one finite necessity here: land.
“One of the challenges we have is that our starting point is free land,” Schwartz said.
It would seem a long shot to get anyone to give away such valuable and easily exploited land here in ski resort country. But Schwartz said they have viable options for future projects where she believes they can develop housing on the scale of Basalt Vista and Wapiti, as well as a modular-manufacturing facility.
They have identified locations between Rifle and Debeque that could house a 40,000- to 50,000-square-foot modular manufacturing facility.
“We are eyeing several parcels, which is very exciting,” she said.
‘We want to go from customer to producer’
The Wapiti Commons plot in Rifle was donated by private owners Clay Crossland and Paul Adams, who are longtime Basalt-based developers. When Habitat started eyeing that development, iterating on what they learned at Basalt Vista, they sought building-material alternatives to the costly traditional “stick-built” approach.
A 20-home development including units set aside for retirees, Wapiti Commons broke ground in March installing “panel-built” units, meaning the homes are put together from prefabricated panels. Made by Denver-based Simple Homes, they are trucked to Rifle in a package that includes 40-foot wall panels, doors and windows, plus floors and roof trusses. Habitat brings in a crane to set them up over the course of a few days.
The panel-built approach has proliferated during the pandemic nationally among Habitat chapters facing spiking construction and materials costs. The stick-built method, with volunteers swinging hammers on wood panels, has become prohibitively expensive, and its day may have passed. The panel-built home approach did lower Habitat’s construction costs for Wapiti, but shopping around and selecting the materials led to some new conversations among Habitat leadership in the spring that may have a larger long-term impact.
“As we began to work with the modular and panelized providers as customers, we began to think, ‘Maybe we should be in the business of producing a product for ourselves and others because of the extreme demand for housing,’” Myler recalled.
The environmental impact of trucking homes from Denver also didn’t sit well with an organization that had been toasting its net-zero development in Basalt. Their goal is to source building materials locally.
They aren’t the only ones thinking along these lines, as modular construction has improved in quality and boomed nationally in recent years in the for-profit sector.
Many Habitat chapters have partnered with private modular-home producers on projects in disaster-relief zones and affordable-housing developments. Boulder’s Habitat chapter recently proposed to build a modular-home factory on the campus of the Boulder Technical Education Center, which would pair students with Habitat builders to construct homes. In September, the Boulder Valley School District began holding public meetings on the initiative, which would require annexing land into the city for the factory.
Fading West Development opened a modular-home factory in Chaffee County last year and has partnered with the Telluride Foundation’s Rural Homes initiative to build a 24-home modular development near Telluride. (The Colorado Sun recently launched an ongoing series detailing the project.) The Colorado legislature also passed a bipartisan bill in March to devote $40 million toward housing-manufacturing initiatives, aiming to seed more housing stock for the state.
The Roaring Fork Valley isn’t the first Habitat chapter to pursue manufacturing its own modular homes, but the failure of such an initiative in Sonoma County, Calif., in 2019 is a cautionary tale. The chapter signed a lease on a manufacturing space in 2018 and expected to produce more than 100 homes by 2021. But funding dried up before they made any. By November 2019, as the San Francisco Chronicle reported, fallout had led the chapter to lay off most of its staff and suspend its building operations entirely.
So, Schwartz and Habitat’s local leaders are moving cautiously forward with the idea of opening a factory. They recently completed a feasibility study that pushed them toward finding seed money to build the plant.
“It’s a complicated issue for us to get our hands around,” said Myler. “We are evaluating the possibility and we want to go from customer to producer.”
Pitkin County Commissioner Kelly McNicholas Kury, who sits on the state’s strategic housing working group, noted the unusual and vital role that Habitat plays in the Roaring Fork Valley.
“Habitat is crucial in the valley because they are basically the only affordable-housing developer that isn’t the ski company and the government,” she said, referring to the Aspen Skiing Co.
Along the Front Range, there is a competitive landscape of affordable-housing developers, she said. In the Aspen area, there are essentially none because developing affordable housing here is not profitable — although the city of Aspen has used an affordable-housing credit program for more than a decade to incentivize such development.
“They’ve figured out a model that works here,” McNicholas Kury said of Habitat. “They deliver housing faster than Pitkin County has been able to, and they leverage partnerships and figure out how to bring a bunch of people together.”
She said she has been encouraged by the public-private modular partnerships elsewhere in Colorado for affordable housing, but she said she would like to better understand how a Habitat modular plant might pencil out financially in the long term, adding that “it’d be a very permanent decision to stand up a manufacturing facility.”
Habitat leaders have toured the privately run Eco Dwelling facility, which opened in Rifle this year producing net-zero modular homes out of recycled steel. The company is moving through the approvals process to build two Rifle area developments that would consist of 83 new free-market homes priced under $290,000.
The company — founded in Miami and recently expanded to Colorado — can manufacture the recycled steel pieces for one of its single-story houses in a matter of hours. Schwartz compared the house pieces to the varied cuts of wood in a lumberyard — except here, they are from recycled steel instead of trees.
“Seeing that technology really opened our eyes,” Schwartz said.
Schwartz said Habitat explored a partnership with Eco Dwelling but opted, instead, to pursue building its own plant with the capability to make a higher-gauge steel that can be used for three-story modular townhomes.
She noted that Habitat is already operating a successful business in its Glenwood ReStore, which sells refurbished home furnishings and claims $4 million in annual sales. Having operated that complicated business, Schwartz said, running a home-manufacturing operation is not a huge leap.
Like ReStore, a manufacturing facility would be expected to produce some revenue for Habitat as it would have the ability to sell units to regional nonprofits, Habitat chapters, governments and other entities developing affordable housing.
“That would be very attractive for us,” Schwartz said.
Such a facility would break new ground nationally for Habitat and potentially provide a model for other Habitat chapters to use. Aspen and the Roaring Fork Valley have long led the way on housing scarcity, unaffordability and economic inequality. With Habitat projects such as Basalt Vista, Wapiti Commons and the home-manufacturing initiative, Schwartz said, it can also be first on solutions.
“My goal is to build 100 homes over the next several years,” she said. “I think we can if we can find the right way to do it.”
This story ran in the Aspen Daily News on Nov. 27