Chipola Street

Challenge

Non-conforming parcels are often small or irregularly-shaped, making them sub-optimal for construction and potentially in violation of modern zoning regulations. However, through either purchase or donation, many not-for-profit housing providers hold such land in their portfolio, where they continue to pay property taxes and maintenance costs. 

Opportunity

The benefits of utilizing non-conforming lots can range from infilling/densifying existing neighborhoods, expanding local tax base, and locating more housing near resources and services. The smaller footprint of the Rural Studio homes allow housing providers to introduce a new home prototype, potentially unlocking additional parcels and expanding the housing provider’s client base. As municipalities explore ways to provide attainable housing, harnessing non-conforming parcels can potentially increase access to housing while simultaneously increasing the local tax base.

Response

Auburn-Opelika Habitat for Humanity (AOHFH) built a series of homes in a local community but was unable to place homes on two parcels in the neighborhood, as the irregularly-shaped lots where too small for the footprint of their typical house prototype. 

By utilizing a two-bed, one bath Rural Studio home with a smaller footprint, AOHFH was able to fit the house within the existing setbacks, eliminating the need for a zoning variance. Also, while the homes address the street, a shed for garden tools was sited and designed to have a roof pitch that maximized solar orientation.

Implementation

Stevens Street

Challenge

Residential zoning regulations serve a purpose of regulating sufficient access of dwellings to air, light, and fire protection. Zoning also allows communities to plan for adequate infrastructure and community facilities. However, zoning has also historically been used as a tool of exclusion, a means to “zone out” and disenfranchise certain populations and communities. The prints of this history are still visible in communities today. In one example, it has been found that lot sizes in a historically Black neighborhood are smaller than lots in other parts of town. With modern lot coverage and floor area ratios, it can be challenging to develop these smaller parcels without combining multiple parcels. This further disenfranchises certain, targeted, areas of cities by reducing the number of citizens living in these areas. 

Opportunity & Response

The smaller footprint of the Product Line Homes allows them to fit on smaller parcels, maintaining a higher number of housing units and, therefore, a higher number of homeownership opportunities within the community. Increasing homeownership opportunity has proven to increased access, increases the tax base, and increases community participation, engagement, and investment. Perhaps more importantly, research shows that the impact on civic engagement and investment is greatest for low- and mid-income homeowners.

Implementation

Stevens Street

Chipola

Unaka

Joint Center

HUD

Urban Affairs Institute

Challenge

Organizations that rely on a single funding source may have trouble weathering a disruption in funding. 

Opportunity & Response

Expanding a housing provider’s capacity to draw from multiple funding avenues/ sources makes it more resilient as an organization, especially during challenging times.

Implementation

Chipola

Unaka

Wharf

Myrtle

Challenge

For organizations that offer direct mortgages, such as Habitat for Humanity, increasing capacity can be a challenge.

Opportunity & Response

Not-for-profits can work with banks and financial institutions to increase their credit. For example, Regions Bank has extended a construction line of credit to Affordable Housing Resources to pay for construction of four homes. This loan will be repaid once AHR sells the homes. 

Regions Bank will receive CRA credit for financing the construction of the project, providing an incentive for this relationship.

Implementation

Chipola

Wharf

Challenge

With increasing frequency, grant agencies tie funding to beyond-code standards for energy and resilience.

Opportunity & Response

Front Porch Initiative is equipped to integrate a variety of beyond-code standards into the prototype homes. By understanding the performance requirements up front, we are able to coordinate details ahead of construction and mitigate any conflicts between requirements of multiple, occasionally conflicting, standards. We support integration of these high-performance standards, as they can reduce monthly energy and insurance costs.

Implementation

Chipola

Challenge

Some low-wealth borrowers do not meet traditional lending requirements because of a lower-than-allowed credit score, and traditional mortgage lenders understandably require potential borrowers to become “credit worthy” before they are considered for a mortgage. While a low credit score can indicate an unacceptable level of risk for a lender, it may also be reflective of a credit shortfall caused by collateral challenges due to the potential borrower being inadequately housed. While these are the potential homeowners that have the most to gain from the obligations of service by depository institutions, this gap between a buyer’s existing credit profile and a traditional lender’s ability assess risk based on the particular circumstances of that buyer is most often insurmountable.

Opportunity & Response

“Housing First” not-for-profits (NFPs) that work locally in the communities they serve have a better ability to consider the extenuating or mitigating circumstances of a specific borrower. For example, a mortgage candidate may have a low credit score because they are unbanked or underbanked. Local NFPs have the unique capacity to work with individuals on a case-by-case basis to first get them into secure housing and then spend time “seasoning up” the homeowner’s credit and financial literacy such that they can be transitioned to a more conventional mortgage product. There is a clear opportunity here for traditional lenders to partner with these NFPs strategically to develop a type of “step-up” program in which the NFP assumes the initial housing risk but leverages resources already developed by the lender to provide the necessary homeowner education and counseling to maintain lower than average delinquency rates.

Implementation

Myrtle

Stevens

Chipola

Challenge

From lending to insurance, and from permitting to appraisal, a disconnect between federal or corporate entities and their local agents often lead to discrepancies in understanding of rules and policies. This can lead to inconsistencies in practice and application between states, regions and localities.

Opportunity & Response

Working directly with partners across the spectrum of home procurement and through research contracts such as this Rural Studio provides a feedback conduit between on-the-ground agents and their organizations to identify unintended barriers to equitable housing access and affordability. As a State Research University, we have additionally leveraged the Intergovernmental Personnel Act (IPA) Mobility Program to embed federal employees more directly in the research.

Implementation

Chipola

Challenge

For low-income borrowers, there is frequently a gap between the amount of financing an individual qualifies for and the cost to construct a home. These gaps can often be closed by combining or otherwise leveraging multiple sources of additional funding and/or subsidy. However, this type of “stacking” requires a significant amount of knowledge and savvy on the part of a housing provider, which is often lacking in underserved rural markets.

Opportunity & Response

Many lenders and nonprofit organizations offer assistance in the forms of programs such as downpayment assistance which help low-income borrowers purchase homes. There are also potential opportunities to leverage multiple funding sources from organizations. For example, USDA Housing Preservation Grant (HPG) funds are typically used for repairing homes of very-low income homeowners through small grants up to $15,000. However, these funds can also be used for replacement housing. When used for replacement housing, there may be a possibility to combine the HPG funds with other types of grants or subsidies, offering greater flexibility to housing providers. Additionally, it is important for providers to work across boundaries to best maximize and leverage all existing opportunities. Rural Studio is working with our partners to provide technical assistance and capacity building opportunities to our housing providers to do just that. For instance, by utilizing Fannie Mae’s sweat equity provisions in the Home Ready program to provide a necessary down payment, a lending partner can then shift their down payment assistance resources to cover other costs related to loan origination and closing.

Implementation

Chipola Street

Unaka

Challenge

Home performance encompasses more than energy efficiency. Some beyond-code certifications are beginning to address intersections between efficiency, resilience, and health but many focus only on one aspect of performance. Integration of more than one third-party standard into a house can be a challenge when the standards conflict. 

Opportunity & Response

Front Porch Initiative works with housing providers to determine which third-party standards are appropriate and beneficial for their project and helps them integrate said standards into their projects. Planning ahead is key to minimizing added costs and construction delays when integrating multiple standards. As the Front Porch team learns to work with a variety of different standards, that knowledge can be shared with other partners. 

Implementation

Chipola

Challenge

Some regions, states, and municipalities have begun to develop their own performance standards, which are able to address the specific conditions in their area. For example, Florida Green Building Coalition FGBC) has developed a series of certification that particularly address Florida’s climate and the natural disaster risks from hurricanes and blowing winds. However, these localized programs may not be recognized by financial institutions when considering a project for an efficient or green mortgage product.

Opportunity & Response

Front Porch Initiative is exploring a partnership with SBP to develop a better understanding of which energy efficiency & resilience standards work best together (considering both logistics and cost); develop recommendations on the optimal resilient/energy efficient building techniques in the Gulf Coast region; and to provide recommendations on changes to existing building standards to better achieve energy efficient, resilient homes at affordable price points

Implementation

Chipola

Challenge

Even in areas not directly hit by storms or other natural disasters, home damage can occur, displacing residents from homes. For example, high winds from a tornado may not destroy a home but may damage roofing and cause water infiltration into the home.

Opportunity & Response

The insurance industry provides incentives for mitigation from storm events. For example, certification from the FORTIFIED Home program by the Insurance Institute for Business and Home Safety (IBHS) can lower insurance premiums. These reductions in monthly premiums can decrease or offset the increased cost of construction.

Implementation

Jean Lafitte

Chipola Street