Successful workforce housing projects from Georgia to Seattle show how builders and others have used creative solutions to overcome the most daunting obstacles. In the real world, getting workforce housing off the ground requires compromise at almost every turn. But in Maryland, California, Illinois, Georgia, and many other states, examples can be found of builders who worked successfully with city planners and nonprofits to beat the system. Our editors found that while not every for-profit builder likes having to offer affordable product in their market-driven mix, those that have stayed the course have not only been able to make a profit, but have improved their credibility with local planners -- and put their company's name on the list of favored contractors for future dealings within urban boundaries. The bottom line: No single solution works in every region -- but with the right incentives, private builders can build more homes for the working people who really need them.

Teaching Affordability

Westfield serves teachers' community with special promotion.

With a starting salary of $28,280, a first-year teacher has little hope of buying a home in Durham, N.C., where the median price for an existing home is $173,100.

But owning a new home in Durham isn't quite so impossible if it's built by Westfield Homes, an East Coast division of California-based Standard Pacific Corp.

Westfield offers Durham teachers special discounts, including 100 percent financing with no private mortgage insurance requirement and no closing costs. "It began as a good neighbor thing," says Cindy Morris, Westfield's director of marketing. "A lot of times, it's hard for teachers to have the cash [to buy a home]. This allows them to get in while the interest rates are low."

That gesture evolved into a successful marketing program for the builder, who has expanded it to Wake County. "Teachers certainly appreciate [the incentives]," says Andrea Short, a high school English teacher. "It makes it easier for people who might otherwise have trouble buying homes."

Educators own nearly 10 percent of the homes in two top-selling Westfield communities, where townhomes start in the low $100s and single-family homes in the $130s. "This is not some program where the price gets pumped up," Morris says. "The teachers get everything everyone else gets plus something extra."

Working the System

Developing Vista del Rio required a complex public/private partnership to meet Los Angeles' insatiable demand for workforce housing.

For more than 100 families in Los Angeles County, the Vista del Rio project offers an opportunity that few thought was possible. Straddling the borders of Commerce and Bell Gardens, the 102-unit project of single-family detached homes brought two for-profit builders and a local nonprofit developer together and made homeownership a reality for low-income working families. With daunting site improvements mandated for a residential project, the development team convinced the landowner to cut his price by $2.5 million. It also made a deal with city officials to speed the approvals process and provide more than $4 million in grants instead of loans for the project. This was in exchange for offering half of the units at below-market prices to families making under 120 percent of the county's median income. In fact, all of the two-story, three- and four-bedroom homes are priced at least $50,000 under market rate, and the project sold out at a pace of about 10 homes per week after opening in early 2003. A gated community, Vista del Rio is located near employment centers, schools, and commercial/retail amenities, as well as major freeways. "We could sell hundreds more of these," says Jeff Lee, president of Lee Homes, a subsidiary of The Lee Group in Marina del Rey, Calif. "It's impossible to meet the demand for first-time, single-family detached homes in L.A. County."

Partnering with TELACU, a nonprofit community development corporation, allowed Lee Homes and another private developer, Braemar Urban Ventures, to combine two sites into one project and grease some political wheels toward an affordable goal. "TELACU had the political connections and already understood the [development] process," says Lee.

Lee Homes has started two more projects to help meet the market's demand for affordable housing: a 34-unit, single-family development in El Monte, Calif., and a Hope VI project in downtown Los Angeles.

Affordable Vista

American CityVista specializes in workforce housing built in cities.

Three years ago, Henry G. Cisneros, former secretary of HUD, spoke to the National Association of Real Estate Editors about the need for affordable housing. He had just launched American CityVista in a joint venture with KB Home, which has a 35 percent share. (Cisneros Community Ventures owns the rest.)

Today the San Antonio-based company has built and sold about 1,000 homes and is building well over 1,000 more in four cities. The company plans to deliver 2,000 homes a year from "Laredo (Texas) to Los Angeles."

Cisneros was one of the first to develop a for-profit company focused on building central city homes for working people often squeezed out of the housing market -- teachers, firefighters, police, nurses. In many central city areas, there simply hasn't been any housing built in 40 years. Presently, the company has projects in two states, Texas and California, and plans to build in Arizona, Colorado, and Nevada. In Texas, the company's three-bedroom homes range from $75,000 to $150,000; in San Bernardino, Calif., they average $250,000.

Typical of the communities is the 12-acre Ramey Place in southeast Fort Worth, Texas, which broke ground last fall. American CityVista's 61 homes will range in size from 1,400 to 4,000 square feet and sell between $95,000 and $150,000, affordable prices for families earning 60 percent of the area median income. Land developer Sheffield Development is able to sell Ramey Place building lots to American CityVista at a discount because of city grant funds and development impact fee waivers through a program called "Stop Six," the first "neighborhood empowerment zone designation," established by Fort Worth.


Lago Vista, San Antonio

  • 150 acres (recreational lake made from former clay pit)

  • 12 minutes from downtown

  • 600 homes planned (270 sold)

  • 5,500-square-foot lots

  • House size: 1,202 to 2,845 square feet with five models and 12 floor plans available

  • Opening: February 2001

  • Prices ranging from $75,000 to $135,000

  • American CityVista negotiates for Lago Vista to be first community to offer DSL service (for high-speed Internet access)

  • KB Home Mortgage and Fannie Mae offer "zero down payment/zero closing cost" mortgages targeted to firefighters, police, teachers, and health care workers.

  • KB Home and American CityVista donate $10,000 to South San Antonio High School (the local school) for technology upgrades.

    Cities in Action

    Municipalities in all parts of the United States have taken steps to produce more workforce housing.

    The Knoxville (Tenn.) Housing Development Corp. (KHDC) and Knox Housing Partnership (KHP) collaborated to acquire and rehabilitate 146 single-family houses, with most tenants taking advantage of home-buying assistance. The improvements, estimated at $20,000 per 800-square-foot house, also reduced home energy costs by 50 percent.

    ... Since 1993, The First-Time Home Buyer Program in Salt Lake City has used more than $1.6 million in HOME funds to acquire, rehabilitate, renovate, or build 88 affordable homes for qualified low-income families with incomes between 50 percent and 80 percent of area median.

    ... Graduate students enrolled in the Studio 804 program of the School of Architecture and Urban Design at the University of Kansas in Lawrence, Kan., annually design and construct an affordable, single-family home in collaboration with Tenants-to-Homeowners (TTH), a nonprofit developer. The 2003 house, completed in mid-May, is a 1,200-square-foot, three-bedroom, one-and-a-half-bath unit with a city-mandated two-car garage, built in an existing TTH/Habitat for Humanity subdivision of affordable homes.

    ... Houston is one of six pilot cities (and one state) targeted by Fannie Mae, National Urban League, and Chase Manhattan Mortgage for the new Women-Headed Household Initiative, which will develop and implement strategies that address financial and educational issues and barriers -- including fear of the responsibility as single wage-earners -- that women with children face in the home-buying process.

    Home And Jobs

    Primavera Builders tackles two issues: the labor problem in the home building industry and affordable homes.

    By Christina B. Farnsworth

    Providing school-to-work opportunities and building affordable housing are Primavera Builders' twin goals. Tucson, Ariz.-based Primavera, the builder arm of the Primavera Foundation, does both remodeling and new construction of affordable homes. It draws its building crews from the ranks of the homeless, those with very low incomes, at-risk youth, and refugees. The company's Web site describes its mission this way: "Through ... home building, training, and partnership efforts, homes are created for low-income families, neighborhoods are revitalized, and lives are rekindled with a renewed sense of purpose, pride, and home."

    Its mostly trainee crews build quality houses, many of which meet the high-energy performance standards of local utility Tucson Electric's Heating Cooling Comfort Guarantee program. Homes built under this program must follow strict construction guidelines and be tested for energy efficiency. The utility company then guarantees the amount of the heating and cooling utility costs (often less than a dollar a day) for owners of homes that meet program criteria, paying the difference if it goes up.

    There are two levels of training for the company's building crews: Beginning Level (lasting up to eight months) and Senior Level (lasting two years). Beginning-level crew members learn general construction skills to become knowledgeable about home building and to develop marketable experience. As they progress, they have the opportunity to work under the supervision of subcontractors to gain a higher level of technical skill in carpentry, plumbing, electrical, drywall, and other specialized trades. At the end of the first eight months, the Beginning Level trainee becomes eligible to become part of the Senior Level or may choose job counseling assistance for permanent employment. Members of the Senior Level have the chance to become even more technically proficient, learn to work independently, and are taught to supervise other crew trainees.

    Through the foundation, Primavera offers progams that include financing tailored for low-income, credit-worthy families. In addition, home buyers may be eligible for down-payment assistance, below-market interest rate mortgages, and reduced closing costs. They also receive instruction in home maintenance and financial counseling in credit and budgeting to help them prepare for the obligations of owning their own homes. Sales proceeds from the homes fund additional projects.

    Tough Times in Dixie

    Lack of workforce housing in the rural South presents a daunting challenge to state officials.

    By Matt Power

    When the University of Georgia looked at housing in the state in 2001, it found a paradox that is not uncommon in rural areas: Businesses won't move to the region without a well-housed resident workforce to greet them -- but builders won't ply their trade and create new housing without economic incentives. The situation has put the brakes on economic development in many regions.

    "We have 159 counties in Georgia," notes Anne Sweaney, a University of Georgia professor who worked on the study, "and 75 of them offered no multifamily permits in the whole year. We have fewer than seven public housing units per 1,000 residents."

    Green with Envy

    Carl Franklin builds energy-efficient, affordable homes that are way below local prices.

    By Nigel F. Maynard

    Parker Place Homes in Plano, Texas, is a new development of eight single-family homes that range in size from 1,620 to 1,800 square feet and cost $50,000 to $110,000 less than the Plano average. The homes also are some of the state's most energy efficient. How is this possible? A tidy partnership between Addison, Texas-based Carl Franklin Homes and the nonprofit Plano Housing Corp.

    Identifying an unused and forgotten strip of land, the Plano Housing Corp. used community development block grant funds to purchase the site and develop the needed infrastructure such as new sewer lines and fire hydrants, says Susan Vinson, director of the housing corporation. The group then contracted with builder Carl Franklin Homes, which paid for the interim construction cost to build the homes.

    In addition to getting the project off the ground, the housing corporation was responsible for screening purchasers. It checked out prospective buyers to make sure they met its income and eligibility requirements, Vinson says. Buyers had to live or work in the city; single buyers had to make $37,250 or less per year while a family of four had to make $53,200 or less. Buyers also were required to go through the city's first-time home buyer program.

    The three- and four-bedroom homes are ideally located near a school on one side and another subdivision on the other. Despite being low-cost, each home sits on a 60-foot-by-100-foot lot and features structural insulated panel walls and roof, tankless water heaters, stained concrete floors, Energy Star appliances, fire retardant paint, and vinyl-clad, double-pane low-E glass windows.

    These are the kinds of homes on which Carl Franklin Homes has built its reputation. Working with HUD, the NAHB, and the PATH program, the builder's homes are frequently used as test subjects for new technology. "We have worked to build a better mouse trap and to prove that energy efficiency and price point are not at odds," says owner Steve Brown. "It is possible to have the most energy-efficient house and reduce costs."