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A competition in Utah could lead to a new affordable housing project

This story is part of The Salt Lake Tribune’s ongoing commitment to finding solutions to Utah’s biggest challenges through the work of the Innovation Lab.

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A statewide Utah-based affordable housing competition left three companies with a number of tools to expand their innovations, including a slice of the $240,000 jackpot. One of the winners may also make his Utah debut.

Ivory Innovations, a Utah nonprofit focused on home solutions, announced the winners of the fourth annual Ivory Prize last week. There was a winner in each category: Volumetric Building Companies in construction, BuildUP in policy reform, and BlackStar in finance.

Abby Ivory, executive director of Ivory Innovations at the University of Utah Business School, says the inspiration for this year’s Ivory Prize comes from the construction industry’s unfavorable attitude to change. The goal, she says, is for real estate sectors to transform to meet people’s growing housing needs.

And as home prices continue to rise and builders face supply chain issues and labor shortages, the affordable housing problem has “veined into a full-fledged crisis,” said Clark Ivory, CEO of Ivory Homes, Utah’s largest real estate developer.

Ivory encouraged developers across the country to think beyond the status quo of traditional construction.

“Be willing to take a little risk…” he said, “and commit to being an advocate for innovation and affordability.”

He also called on Utah lawmakers to get involved in uncovering “creative approaches to public policy and regulatory reform.” With more grassroots support, Ivory says, the three winners’ ideas could gain scope and contribute to a more stable real estate market, not only for consumers but also for investors.

Not only do Ivory Prize winners pocket $80,000 to fuel their innovations, they also gain access to various networks, investors, stocks and other avenues to expand the project beyond its home base.

“We don’t need just one affordable housing solution,” Ivory said, “we need 1,000.”

The winners of affordable housing

finance

BlackStar Stability won the cake in the finance category. The Washington, DC-based company targets predatory home loans and puts power back in the hands of homeowners.

BlackStar’s John Green says the company was formed to help low- to middle-income families mostly trapped in Contract for Deeds (CFD). These folks are often stuck in sticky seller-finance deals that give homebuyers “an illusion of ownership,” he said, “when in reality there isn’t.”

(Courtesy of TWIG Media Lab) Blackstar Stability’s John Green and George Scott stand in front of a brick building on a rainy day. Blackstar Stability is a winner of the 2022 Ivory Prize, an affordable housing innovation competition hosted by Ivory Innovations at the University of Utah.

Blackstar believes that about 5% of all single-family homes in America are financed with a CFD or something similar. According to Green, fewer than one in five people who signed those contracts will ever own the home.

Unlike a traditional mortgage, individuals tied to a CFD do not actually own their home or property. Rather, the seller does so until the full debt is paid. But some homeowners, Green points out, aren’t always aware of contract terms. In other cases, the home value may be too low for a bank to approve the mortgage loan.

By purchasing the property from the seller, Blackstar exchanges the CFD and provides the homeowner with a traditional mortgage.

political reform

BuildUp isn’t just about fighting for affordable housing. It is a trade school that teaches the basics of real estate to youngsters in Birmingham, Alabama. By the time they graduate, most children are managing real estate or buying homes without being crippled by debt.

Mark Martin, CEO of BuildUp, says the program empowers youth, particularly marginalized youth, to build wealth from a young age.

“You shouldn’t have to wait until you’re 60 to own a home,” Martin said.

(Courtesy of TWIG Media Lab) Mark Martin, the founder of business school BuildUP, stands next to Gerrell Jones, the school’s student union coordinator. BuiltUp is a winner of the 2022 Ivory Prize, an affordable housing innovation competition hosted by Ivory Innovations at the University of Utah.

They do this by purchasing abandoned and high-maintenance properties for students to renovate and eventually own or manage. Martin says BuildUp’s hands-on approach to learning gives graduates fluency in manual skills and the financial literacy to expand their skillset into a small business.

“Not only are we solving the community problem of fair housing, safe housing and affordable housing,” said Martin, “but we are also part of the solution to the economic challenges that a community like Birmingham is seeing, where you don’t see enough workers, to keep an industry alive at all.”

construction

The Volumetric Building Companies (VBC) won for using modular building methods to speed up the construction process.

A handful of things set modular construction apart from traditional construction methods. The most glaring difference is that modular construction is often done in a controlled environment, such as a warehouse, rather than on-site. Once the structure is built, it is transported to its final location.

Von Buckley, CEO of VBC, says modular construction can complete a building in almost half the time compared to conventional construction, reducing labor costs and getting people into homes faster. And VBC is a package deal. They take care of design, manufacture, construction and shipping and streamline the process.

(Courtesy of TWIG Media Lab) Von Buckley, CEO of Volumetric Building Companies, a modular construction company, smiles in a submitted video. VBC is a winner of the 2022 Ivory Prize, an affordable housing innovation competition hosted by Ivory Innovations at the University of Utah.

Buckley says the company has grown 2,000% since 2015. This growth has given VBC the opportunity to explore “the modular capabilities” in terms of scale and production rate. VBC has commissioned all types of housing, including single-family houses, apartment complexes and multi-purpose buildings.

“We’re really changing the way people think homes should be built,” Buckley said.

Testing the innovations in Utah

During last week’s announcement, Clark Ivory said he was eager to bring VBC to Utah to put their modular building expertise into action.

“We have a project in store for you,” Ivory told Buckely, “and we can’t wait to bring you over here and put it to the test.”

To test these home creations, Ivory Innovations created the Ivory Innovations Operating Foundation, a sister non-profit organization dedicated solely to the implementation of affordable housing. The Ivory Innovations Operating Foundation hopes to pilot the winning innovations, including VBC.

Applicants often have “great ideas,” but achieving broad reach can be challenging for companies, said Abby Ivory, managing director of Ivory Innovations.

Part of the nonprofit’s purpose is to help these companies get “a better proof of concept” by collecting data and research on these innovations “to make housing more affordable and effect change,” Ivory said.

(Courtesy of TWIG Media Lab) A complete residential structure built by Volumetric Building Companies, an East Coast modular construction company. VBC is a winner of the 2022 Ivory Prize, a Utah affordable housing competition hosted by Ivory Innovations at the University of Utah.

And while partnership talks with VBC and Ivory Innovations are still early in the process, Michael Parker, vice president of strategy at Ivory Homes, says he’s committed to bringing VBC’s vision for a potential multi-family home project to Utah.

Before VBC, Parker likened modularity to “Lego isn’t responsible for its own instruction manual,” due to all the moving parts that made project completion difficult. He specifically pointed to VBC’s streamlined process that eliminates much of the engineering work involved in building a home, calling the company “the Lego of modular building.”

(Courtesy of TWIG Media Lab) Volumetric Building Companies, a modular construction company, moves a housing section. VBC is a winner of the Ivory Prize, a Utah affordable housing competition hosted by Ivory Innovations at the University of Utah.

But there are some kinks that need to be ironed out. City zoning laws would most likely need to be changed, Parker says, to allow the structures to occupy the lot. More importantly, Parker notes that shipping a modular building is only affordable if it ships within a 200 to 400 mile radius. In addition, it could become expensive. There is currently no modular construction company anywhere near Utah producing on the scale of VBC within that mile limit.

“We’re fairly inclined to go that route,” Parker said, “but finding a mature partner in the right geographic location would be critical.”

Editor’s Note • The Clark and Christine Ivory Foundation is a donor to the Salt Lake Tribune’s Innovation Lab.

https://www.sltrib.com/news/2022/05/27/utah-nonprofit-eyes/ A competition in Utah could lead to a new affordable housing project

Joel McCord

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