Attainable housing products are often smaller and therefore less costly to build. But they don’t have to be more cheaply made or less desirable for consumers. How can we accomplish this and design and build products that are truly attainable – allowing builders, developers and consumers to “profit” in their own ways?

Builders and designers who spoke at the Housing Innovation Alliance’s November Live Roundtable held in Denver provided food for thought on how to do so with density; simple, replicable designs; increasing vertical integration; and partnering with investors on a unique rental housing option.

Here are five key takeaways from their snapshot presentations.

1: More is More

A key part of making housing attainable is being able to put more homes on a given piece of land. To reach density with attainable housing and do more homes per community, Oakwood Homes does “a cluster pod layout, a kind of a cul-de-sac,” said Audrey Lam, the company’s CFO. “It helps us to reduce our costs in land development — everything from shorter utility lines to less flat work, etc. We lower our land development costs per home.”

The product, known as the American Dream, is a rear-loaded 24×32-foot detached house. Oakwood offers seven floor plans of two- and three-story homes with one- or two-car garages. To save on costs, the houses are all slab on grade, have two to four bedrooms and one to three bathrooms, and measure from just under 1,000 square feet up to 1,700 square feet.

The garages are in the back, and there are shared front yards. “It creates kind of a community feel,” said Lam, who also spoke about Oakwood’s commitment to building homes mainly for first-time buyers. The homes sell for $270,000 — a figure that Oakwood targeted before designing this product. It’s roughly half Denver’s average new home price of $550,000. “Only about one-third of households can afford that,” Lam said. “But if we drop that down to $270,000, two-thirds of families can buy a home here in Denver. From a business perspective, you can see why this makes sense. Your target market doubles by dropping your price.”

2: Simplify + Save

Another way to keep costs down is to keep it simple and do a “kind of plug and play” by replicating the floor plans, Lam said. Doing this minimizes the SKUs. “In our seven American Dream floor plans, we have four window SKUs.” This makes purchasing easier and they get lower prices through volume buying. It’s also easier on trade partners.

On the production side, Oakwood also made an investment in Precision Building Systems, a panel plant in downtown Denver. The fabricator makes wall panels, floor systems and roof trusses. This vertical integration helps keep costs lower.

3: Stick to the Plan

Lam said the demand for this product is very high, but Oakwood targets the number of homes they build and sticks to that target. If they say they will build eight to ten homes a month, that’s what they do, even if the company “could sell six times that number. We’ve got a preset plan throughout the whole community of which block we’re going to go down and we do. If it’s four a week, we release for build four. It takes discipline to do that.”

And, although the houses will likely sell out before the models are even built, Oakwood is not going to raise the price. “You have to make a commitment to not do that and look for ways to make more money by reducing costs,” Lam said. “This has to be part of the company culture.”

4: Consider Other Finance Models

Scott Choppin, founder and CEO of the Urban Pacific Group of Companies, focuses on this “missing middle” in an innovative way by pairing private capital with new-construction workforce housing, called Urban Town House (“UTH”). The product targets “a middle-income or moderate-income working family demographic in Southern California for predominantly Hispanic families between six and ten people living in a family group,” Choppin said.

The UTH is a 1,750 square foot, five-bedroom, four-bathroom, three-story townhouse rental. There’s two-car garage access on the ground floor. One of the bedrooms is also on the ground floor. The UTH is meant for multi-generational living. “We deliver units that are coherent with consumers’ lifestyles,” Choppin said. “In an existing neighborhood where these tenants already live.” 

Urban Pacific landed on this design because, said Choppin, “This is the crossover of maximum rent generation, but still in the right income categories with the lowest cost build. If we go up to four stories in California, we start doing extra stairwells and more heavy-duty sprinkler systems.”

They build between 22 and 25 units per acre and rent them for $3,300 to $3,500 a month. “The value ratio,” Choppin said, “is about a $1.80 to $2 a square foot in a marketplace that’s three, four, five dollars a square foot for any sort of new housing.”

Urban Pacific’s other innovation is that they have been able to pair up with private capital to deliver this product. “Investors are encouraged that we’re developing housing in under-supplied neighborhoods, some of which haven’t seen new housing in 40 years,” Choppin said. Plus, the families have strong social networks locally, their kids are in school, their jobs are close by. They tend to choose housing that’s co-located to where they work, which makes them very stable.

Choppin added that Urban Pacific is able to deliver these middle-income rents without subsidy. “We’re just using standard debt and private capital to deliver that. Programmatically we’ve delivered 22.66 IRR [internal rate of return] over the lifetime of our demonstration phase, which is the first set of projects that we developed. That test model has in fact delivered beyond what we expected.”

5: Go Small but Special

Making smaller homes in more dense communities doesn’t just mean cutting back or using cheap materials. “When we make things smaller, we can’t take everything away; we have to add something back in,” said Bill Ramsey, principal in charge of for-sale markets across Colorado, Utah, Idaho and Nevada for KTGY Architecture and Planning. While consumers are “willing to live in smaller homes on smaller lots, they don’t want finishes or materials to be cheap or lesser, and they don’t want worse appliances.”

But he said that the beauty of doing something small is that builders can afford to make them a little nicer: “If you’re only putting in a couple of feet of cabinet you can probably afford to install a quartz or granite countertop.”

KTGY designs eight-pack or nine-pack clusters. The designers focus on details that make the homes “small but special.” Houses may have a five-foot rear yard, but KTGY makes up for it with a covered outdoor space. They make sure there’s plenty of storage, high volume ceilings to bring in light, and flex rooms that offer a little bit of privacy in a secondary space.

To make the homes live larger, they combine spaces. The house doesn’t have a dining room. “Not even a nook table,” Ramsey said. “But what it does have is an oversized island, which serves as the location for your meals but also, when someone walks into this they don’t think, ‘Wow, I don’t have a dining room.’ They think, ‘Look at how nice that oversized island is.’”  


What else can you do to drive attainable housing through your product itself?

We gave the 120+ experts at our round table event 5 questions to dig into during table-based think tanks – allowing our crowd to share ideas and accelerate innovation in this space. Check back in early 2020, and learn what they had to say.