Published December 15, 2005 in issue 0450 of the Hook

BY DAVE MCNAIR

Just before Thanksgiving, three houses built in a factory in just seven days were driven to a lot near the intersection of 10th and Page Streets. Then the three 1,200 square-foot modular houses-- the last of 30 the Piedmont Housing Alliance has developed in the troubled 10th and Page neighborhood-- were lifted into place by cranes in less than two days. If all goes according the schedule, the houses will be finished by mid-January. Can this project reshape the modular industry as it reshapes a neighborhood?

According to Peter Loach, Deputy Director of Operations for the PHA, the modular homes are a symbol of the evolution of the design approach to affordable housing. "Modular takes what we've been trying to do to a whole new level," Loach says.

The PHA has been trying to improve life in one of Charlottesville's poorest neighborhoods by encouraging homeownership. The idea is pretty simple: if people have a financial stake in their homes instead of just renting, they will care enough to improve the neighborhood.

Using a combination of community outreach, innovative construction techniques, grants for downpayment assistance, and low-interest loan packages, the PHA has managed to help 23 lower-income clients with median incomes of less than $35,000 a year purchase homes in the 10th and Page neighborhood, all without lowering property values.

Of course, PHA's financial assistance is key to the program. To preserve property values in the neighborhood, the PHA sells its houses at market value.

"If we sold the houses below market value," Loach explains, "the value of the houses in the neighborhood would go down, and that would undermine our goal to create wealth in the neighborhood."

For example, the new modular houses will sell for about $220,000 to $250,000, which is reasonable by Charlottesville standards, but hardly qualifies as affordable housing. The trick then is convincing a low-income buyer that ownership is possible with the right financing package and some down payment assistance. A buyer could purchase one of these modular houses with PHA assistance and have to carry the equivalent of only a $130,000 or $150,000 mortgage, while the value of the property keeps pace with the market.

The trick is avoiding full-scale gentrification. Conditions in the sales contract encourage buyers to commit themselves to the neighborhood. According to Loach, if a client sells early, the PHA gets back the money they funded, plus one-fifth of the capital gains. If the client stays, that obligation is forgiven over time.

Still, the strategy has a few unknowns. For example, because of fair housing laws, the PHA can't control who buys these houses, although they can turn away investors. As Loach points out, "It's a free country, after all. But we can offer incentives to people in the neighborhood and other low-income buyers."

Of the 30 houses the PHA has developed in the 10th Street neighborhood, only seven were sold on the open market. According to one Page Street resident, the neighborhood has remained remarkably diverse despite the development, although he points out that it has a lot to do with the many rental properties in the area.

And, the resident says, many of the very poorest people in the neighborhood-- renters who are unable even to take advantage of PHA assistance-- are still in danger of being forced out by rising property values. The resident claims, for instance, that one neighbor recently had to relocate to the housing project on the other side of 10th Street.

"Design is not serving just the homeowner," says Katie Swenson, director of the Charlottesville Community Design Center, which worked in collaboration with the PHA to develop the 10th Street neighborhood.

"And not even just the neighborhood," she adds, "though it must do both. But it begins by asking the larger question and formulating a response to the need."

Although financial assistance is key to the PHA's strategy, design has created new possibilities for affordable housing in Charlottesville. The three modular homes, as well as the other homes the PHA has developed in the neighborhood, are all Energy Star certified and created with three specific things in mind: affordability, durability, and energy efficiency.

It's also worth noting that the houses are artfully designed, with lots of windows, and floor plans that make them seem much larger than they are.

"Just having the house affordable up front isn't enough," says Mark Watson, Project Director for the PHA. "It has to be sustainable, it has to last and be energy efficient so that people can afford to own the house. We're trying to lead the way with better methods of construction."

According to Watson, utility bills on the occupied Energy Star houses are running as little as $60 per month. The new modular homes will be just as energy-efficient, but they will also serve as a design experiment. Both the Center and the PHA view the project as a chance to influence the modular industry.

"We're pushing the already innovative modular factories to consider greater innovations," says the Center's Swenson. "For example, a different type of insulation will be used in each modular house so that we can analyze their efficiency."

In this case, the Center worked with the PHA to determine if modular construction might be an affordable housing solution. Design teams at the Center studied modular construction, interviewed companies, and finally came up with plans for the PHA to implement.

Obviously, modular houses can be built and raised much faster than stick-built houses, reducing construction costs. In addition, as the modular housing industry adopts more energy-efficiency standards and construction techniques like the ones the Center advocates, the quality and sustainability of modular houses will make them more attractive to buyers.

If the three modular houses on 10th Street are successful, says Watson, it could lead to the "whole new level" that Loach mentioned. The PHA owns over 80 acres in Nelson County and Crozet. Watson says it's possible that 30 or more modular houses could be built in those areas. "We're hoping to do this on a much larger scale, " he says.

"We build, in the end, because we believe in a future," writes architecture critic Paul Goldberger. "Nothing shows commitment to the future like architecture."

Of course, Goldberger is talking about the high art of architecture, about buildings like Frank Gehry's Guggenheim Museum in Bilbao, Spain, which change the way we think about architecture in the same way that Picasso and Pollock changed the way we think about painting. But Goldberger's observation applies just as well to the more practical transformation of the 10th and Page neighborhood.

Sure, it may not be a perfect solution, and only time will tell if the neighborhood can resist gentrification. But the effort clearly has the future in mind.

These modular houses on 10th street took just seven days to build and two days to raise.
PHOTO BY SCHAEFFER E. SOMERS

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