Momentum

Yes, it's been a long time since I posted, but that doesn't mean things haven't been moving along. We have selected a General Contractor, we have found a lender, and we have solidified the budget. All of these things have good and bad issues related to them.

General Contractor:

Jeff bid out the project to seven General Contractors. Four responded. The bids varied widely, but had one thing in common --- they were WAY over what we had budgeted for. I believe I discussed this before, but there was a lack of knowledge as to what their role would be after the modules come to the site (meaning that the excavation/foundation work should be priced similar to a stick-built home, so the pricing is known). One GC had an idea about putting "known" items under a GC contract and then having them do "Construction Management" for the other elements, potentially paying an hourly wage so that we would pay only for work completed. This was an interesting proposal, but without a firm price was risky to say the least. Also the lenders that we spoke to would not necessarily allow this structure --- they wanted a General Contract for the entire construction project. So this was a no go. So Jeff scrutinized the budget line items and came up with a list, as specific as he could make it, with each line item defined. Two GCs were now in the running, somewhat pissed that they had to work so hard for for this project. Jeff and Michael and I conferred and basically agreed that at this point, it really came down to price. For me, though, it was also an idealogical issue in that I wanted our GC to come on board understanding the significance of this project, realizing that we were breaking new ground (literally) and be willing to work with us on price, or at least as much as they could. Well, when it came down to it, one GC was significantly less than the other, so the option was clear. This did not go down well with the other guy, and words were said and feelings were hurt, and, well, it was a bit uncomfortable. But we feel good about who we have chosen. He seems to have the right attitude about sustainability and has been relatively "drama-free," both good things.

Lenders:

So I have mentioned in the past the fear of prefab by most conventional lenders. We have been working with Gold Coast Bank, a small, local bank, that seemed to be all on board. I know folks have mentioned Land/Home Financial, and Jason Pachl at L/H has been great, but their fees are really high compared to other financial institutions. Specifically, they had a 2% origination fee, compared to others which ranged from .5% and 1%. This small difference was going to make a huge difference for the size loan we were seeking. Also, we did want a Chicago bank to get their feet wet on prefab so that there was a precedent set and knowledge that we were not building a double-wide. Everything was going along swimmingly until I received an email from the lender saying "give me a call when you get a chance." Apparently the bank's board was now uncomfortable with this idea, and although they were not going to leave us in a lurch, decided that they could not fund our construction loan at the level we needed, requiring us to put in cash assets towards the construction that we were uncomfortable putting up.

Now, it's not impossible to do this, but it is frustrating nonetheless, so were undecided on whether to go forward with them, or to go with Land/Home and pay extra fees. Some of you have potentially heard of a new bank opening up in Chicago called Green Choice Bank (http://www.greenchoicebank.com/#/home). We knew about them, and really wanted to use them, but as they are not "open for business" until mid-2010, we didn't think the timing would work. Well, now that it is almost June, it's a possibility that we could work with them. So this is something we are now exploring. In any case, our desire is to break ground in late June --- that's our story and we're sticking to it.

Budget:

Well, I can firmly say that this house is no longer "affordable," but Jeff and Kate have learned some lessons that could potentially make the NEXT person that wants to build this home more affordable than ours is. One of the issues is that the foundation, which has interesting notches to take advantage of natural light, costs way more than a solid rectangle/square foundation. Also, our choice of appliances and cabinetry have increased the price somewhat substantially. Truth is, there are no more changes that we are willing to make to the house --- we want what we want. I still think that, once built, the house will cost less to build because it is prefabricated than it could be built on site. This gives us some comfort, but our bank account is not so happy. Certainly one way to lower the price is to buy cheaper land. Also, the more that can be done in the factory, the better.

Last, but not least, the house, Square Root Architecture + Design, and Michael and I were profiled in the Chicago Tribune on May 21st: (http://www.chicagotribune.com/news/local/chicago/ct-x-c-prefab-housing-0521-20100521,0,5254251.story) which is totally cool. It's all about trying to build prefab in Chicago and the obstacles being faced.

So the title "Momentum" is to show that, albeit with some low points, things are coming together. This may just happen yet!

Bank Blues

So, I'm learning in our quest to get construction financing that (1) there are not a lot of lenders that lend for single-family new construction, and (2) prefab is apparently a dirty word.

I have had two lenders tell me that they will not consider lending to us because their loan committee is scared of "prefab" housing. Somebody actually asked me, "What happens if something needs to be fixed?" Huh? Oh, of course, you bring the house back to the factory. Duh! Anyway, part of the problem, as you may have guessed, is education. Jeff has suggested that I do not tell lenders that the house is prefab, and perhaps that is the right way to go, but it is ridiculous. Jeff did contact an Illinois Manufactured Housing Association rep about this and she stated that she had never heard this as a problem, although the banks we have been considering were Chicago banks, so it is possible that they have never dealt with this before.

So, in the meantime, we are working with Jason Pachl at Land-Home Financial that has a modular financing program. They are based out of Minnesota, which is fine except that I really wanted to use a local bank.

In other news, and this may be a boring topic, but we really wanted to find a "modern" fence to surround the property to go with our modern house. This is a lot harder than you would think. What we have decided we like is a horizontal slat fence (see above). I actually found this picture on a website for Advanced Fence and Gate, which is a local company, but the sales rep kept telling me how expensive this was and that we would be crazy to do it. That's not the spirit I'm looking for. We are talking to a few fence builders to see if they can accomplish this for a reasonable price.

The other item that we may have to forego is the custom garage that Jeff had designed. It is just going to cost too much to build, and we could save $5,000+ on getting a garage company to build it. Good news is that we can upgrade to Hardie board that matches the house, so it won't be too boring, but it is a disappointment.

As to timing, we still have to select the General Contractor. I won't go into all the nuances that is delaying our decision, but we hope to have a selection by next week. That will be a relief.

All in all, we are still calm, knowing that we are doing something new and that it could have a larger impact on the way sustainable and affordable housing can be built. We knew there would be a few snags. In any case, keeping positive.

Reality Check

So there's a couple of things we've encountered which we weren't expecting. First, there's an education problem. Since prefab hasn't been done in Chicago to any great extent, most general contractors are not going to be able to bid on a prefab project in a precise manner. For example, a portion of the electrical work will be completed in the factory, and then a portion of the electrical work is required to be completed on site. Unfortunately, it is unclear to the general contractor what portion of that work he is responsible for until, of course, he is educated on the specifics of what the factory is doing. To get that general contractor to understand the process, he or she has to be selected by the developer (us) so that they will invest the time and money to learn about process. This becomes a "chicken and egg" problem, and that we cannot really know if a particular GC's bid is more competitive until we hire him/her. Now when I say "us" of course I really mean Jeff because him and Kate have been combing through the bids of four general contractors that they solicited the project to to try and determine which is the best fit. There definitely are a couple that are in the lead, so they say, that have shown flexibility and innovation in how they intend to structure the project. All in all, we have remained positive, but this was not something we thought of initially.

Second, and you are probably not surprised by this, things are more expensive than we originally thought. We were happy to float along thinking we could afford things like floating staircases and FireOrbs, but in reality, this is not necessarily the case. At a minimum, we are going to have to make some changes, and some hurt more than others.

One change that should be a substantial savings is to eliminate the full basement and replace, instead, with a crawl space. In theory, I like this idea. Generally, when you have a giant place to store things, you end up filling it up with crap that you don't need. I'm reading about living a simpler and more meaningful life (The New Frugality by Chris Farrell) and like the idea of deciding what is or isn't important. On the other hand, I was thrilled to think we could put the cats' litter box downstairs and avoid the discomfort of having it on display when guests come over. Supposedly we can save between $50-$65k by eliminating the basement --- no litter box embarrassment is worth that.

Another change we are making is forgoing the floating staircase. Jeff assures us that we can still have a modern staircase with bamboo treads and steel handrails, but the floating quality is going to have to go (apparently this type of staircase alone could cost in the area of $30,000).

As it stands, we are still going to have to "value engineer" this project at all ends. We have been faced with tough decisions, such as, how important is a garage (important), how important is hardwood floors on the second floor (not that important). Can we save money by contracting out certain line items ourselves, rather than have the GC do them --- interior painting is a good example of this. Can we postpone some of the improvements at a time when we have additional funding. As it stands, it looks like the solar and PV panels may need to be but on hold.

I hope I'm not sounding disappointed with the project, because I'm not. It's become a challenge, now, to bring in the best possible project for the least possible costs, without sacrificing the things that are most important to us. Yes, it looks as though the price point is going to go up to, say, $175-$200 a square foot. I know this is not affordable to everybody.

One area that we probably could save money, but are sticking to our guns, is the high-end appliances and cabinetry from EcoUrban. In the big scheme of things, the EcoUrban cabinetry is not going to cost an outrageous amount of money, especially compared to some of their European competitors, but, yes, the Miele refrigerator is expensive. What can I say? We're suckers for integrated appliances, and don't want to compromise on these items. We are willing to pay a premium for them. Can we compromise on other things? Yes, indeed we can.

What I will leave you with is a positive thought --- one of the bidding GCs told Jeff that if the project we are building would be built on site, it would cost thousands, potentially hundreds of thousands of dollars more to build, and certainly would be assessed that way in the market. So essentially, even though we are spending more than we thought, it will be worth more than we paid the minute we move into it. That certainly helps.

Construction Loans

So, we've been rolling merrily along, firming up pricing, in order to finally apply for a construction loan. What I've found is that there are very few banks in which will provide new construction loans for single-family homes. This isn't very surprising, but it is a concern nonetheless. What is surprising is that Abraham had found a lender that specializes in financing the construction of modular homes. This company, based out of Minnesota, is called Land Home Financial Services Inc. (http://www.land-home.net/modular_program_details.html). They offer a "One-Time Close" which modifies the construction loan into a permanent mortgage at completion. While this sounds perfect, it doesn't look like we will have a lot of opportunity to shop around for rates, so we are hoping that Land Home is competitive.

I did call Land Home and spoke to Jason Pachl who handles the territory that includes Illinois. He was very helpful. He said that the average time it takes to get approved for a loan is 30 to 45 days, so if we want to really start this project in March, we will hopefully get our final pricing in soon so we can apply with full knowledge of what the loan amount will be.

In other news, Jeff has bid our project out to several general contractors who he feels will be on board with what we are trying to achieve. We should get bids back in the next couple of weeks, so then I can announce with better certainty what the pricing will be. So far we are estimating that the complete home, including our fancy tastes (i.e. floating staircase, PV panels, high-end appliances, etc.) will estimate at $175/sf. Jeff still believes that the home could cost $125/sf if completed at the factory with their specifications and selections, so this can still be a model for affordable housing in the city. The nice thing is that it can be modified to the owners specifications if they (we) are willing to foot the bill. I still think $175/sf, if that's a solid number, is pretty amazing for all that we are going to get!

By the way, we were interviewed by reporter Lisa Skolnik for a piece in the AIA's monthly trade magazine's March issue. Once it comes out, I will certainly post here. Very exciting!!

What's New II

I apologize for taking such a long hiatus. It doesn't mean that things have not been moving along at record pace. Last I posted, we were starting the Green Homes process. Jeff made modifications to the design that made sure we were going to comply with all the Green Home requirements. For instance, I was told that we have to have a vegetable garden. Not that I'm against this, but we've never been able to succesfully keep a house plant alive, so it will be a challenge. Meeting the Green Homes requirements allowed us to qualify for the Green Permit process (explained in a previous post). While normally a single-family home can be "self-certified," we (Jeff) were asked to go through each trade individually because of the fact this would be the first time they were examining a home that would be built in this manner.

The process went fairly smoothly. The one surprise is that they wanted structural engineering specs detailed on the permit drawings, which, as we were told, is something that you usually do not need to do until after you receive your permits. But we complied, and now the permit drawings are complete.

Jeff recently put the project out to bid with seven general contractors. This is beneficial because we received some preliminary pricing from the modular home manufacturer, but are still awaiting numbers for the excavation, foundation and finishing work. We are really hoping that the responses we get from the general contractors are competitive. It would be silly to manufacture an "affordable" home and have the costs of the site prep make the project unfeasible. We are hoping to find a GC who is as committed to the project as we are, who wants to show that there's a different way that you can provide housing for people that is sustainable and not break the bank. I'm positive that we will find the right guy (or gal) to make this project a success!

In the meantime...we have been making "selections." Selections for pretty much everything, from the tile in the bathrooms to the color of the house. Again, besides needing to nail down these details, it is part of solidifying the project budget to finally estimate what this project is going to cost, and, especially, to determine how much we have to borrow. Finding a lender has been a whole other ballgame. I will refer to this in another post.

So we decided to go with bamboo floors for the entire house, except for the tile flooring in the baths. Jeff picked out a "strand" pattern which looks like it is going to be beautiful. As potentially mentioned before, although we want our home to be "affordable," we still have high end tastes.

We did decide to go with EcoUrban to do our kitchen and bath cabinetry. Again, EcoUrban is located in the city at 15th and Western, and do all their manufacturing here as well. Even better, they hire locally, which makes me like them even more. Again, all their cabinetry materials are urea formaldehyde-free, so it is a more sustainable product.

EcoUrban pricing has been incredibly reasonable for the quality of product they offer. Our cabinetry in the kitchen will be "floating," or mounted on the wall, both upper and lower cabinetry. The upper cabinets will be glass with bi-fold doors that close upwards. We will have sustainable stainless steel countertops to complement the room.

We also are including high-end appliances. Some may think this is unnecessary, and perhaps it is, but I enjoy cooking, and I've been told that the right appliances can make me cook like a pro! So, yes, our appliances are Miele, Wolf and Dacor. We did find an appliances store in town that gave us very reasonable pricing on these items, and we even got lucky enough to find a Wolf oven in a display showroom that we are going to get for a deeply discounted price (this certainly helps!!). The refrigerator (Miele), dishwasher (Miele), exhaust hood (Broan) and clothes washer (Whirlpool) are all energy-star rated, as required by Chicago Green Homes.

There are two things that do not necessarily meet the affordability goal, but are so cool that we have stretched our budget to include them. The first is that we would like a floating staircase with wood treads. I'll be honest, we just love the way these look, and this is our dream house, and, darnit, we want one! Also, and this is a recent phenomenon, we looked at Jeff's webpage for the C3 and noticed the ultra-cool fireplace --- the FireOrb (http://www.fireorb.net/). I'll be honest. I don't know that we can really afford this, but it is sooo cool. I want one.

As to colors for the outside of the house, we are still undecided. I'm liking a steely blue, Michael seems to like a rust color. I'm sure we will not figure this out until someone tells us we have to, so we will keep you posted.

We are very excited that the windows on the house will be manufactured by another local company, Serious Windows, who have come up with a technology to makes incredibly energy efficient windows.

Well, that will give you something to chew on for the moment. Will definitely be posting more frequently as things are really beginning to take off!

What's New?

It has been quite a while since I last posted, but plenty of things have been going on. Jeff and Kate submitted all the paperwork for the Chicago Green Homes and we have been approved. Also, we made it through Zoning Review unscathed. Next --- building permits.

Remember, only a few if any similar projects have been done in Chicago, so we are breaking new ground. Because we qualified as a Chicago Green Home, we are allowed to go through the expedited Green Permit process, which allows you to receive your permit more speedily than non-green projects. As we start this process, I'm sure I will have plenty to report on..

As for now, Michael and I are doing the fun stuff --- picking out the designs for our kitchen and baths. For our bath vanities, we went to Advantage Kitchen and Bath in Niles, Illinois. They have a very nice selection and excellent sales people.

As for our kitchen design, we are in love with modern kitchens, especially with fully integrated appliances. But the well known companies that provide this, like Poggenpohl and ArcLinea, are incredibly pricey. We are planning to get some quotes, but are a little disheartened by the projected costs.

Fortunately, Jeff found a company called EcoUrban Collection ( http://www.ecourbancollection.com/index.html )which is a line of environmentally responsible, American-made, Eurostyle cabinetry for kitchens, baths and offices. From what we've seen on their website, we like their vision and their quality. And according to one of the owners, these are much more reasonably priced than comparable companies. Another great thing about them is that they are local, rather than having components coming from Germany or Italy. We are anxious to see their wares and determine if they are the right designers for us!

The C3 Explained

I've been asking Jeff Sommers to fill me in on his inspiration to embark upon this project and what principles went into the design of the C3. He describes the Urban-C3 as 'Green Prefabricated Housing for the Working Middle-Class, of which we surely are such. I will let him describe in his own words:

There are a rapidly growing number of existing and potential homeowners who are compelled to increase the energy efficiency of their homes as a way to reduce their expenses and negative impact on the environment. However, due to the premium costs generally associated with constructing highly energy efficient structures, the majority of these working middle-class families cannot afford to support these desires.

Our primary goal with this project is to propose a solution for this dilemma; to provide sustainable housing that is affordable for the working middle-class family through the utilization of prefabrication and the methods of the modular housing industry.

Why Prefab?

Prefabricated (also referred to as 'systems built') homes are built as modules within a factory controlled setting as opposed to conventional 'stick-built' homes that are constructed on site. There are a number of advantages to building homes this way:

• First, there is a higher level of quality control when constructing a building in a factory setting instead of outside in the elements, so the home is generally of higher structural integrity.
• Second, prefab homes can be constructed year-round and multiple modules can be built simultaneously, saving time and money.
• Third, it minimizes waste. Because the manufacturer is building so many homes at once, the scraps are reused on other projects instead of going into a landfill.
• Fourth, economies of scale reduce our labor and material costs through a repetive assembly line process and volume purchases from dedicated vendor relationships.

Due to this control over the construction process, materials, and labor costs, prefab homes can be produced at a consistently higher quality AND at a substantial savings over traditional construction.

Integrated Design Process

Together with our local energy consultant, we are collaborating with a fabrication facility in Indiana to develop construction details and pricing that will produce a highly energy efficient building shell and systems to substantially surpass the standard Energy Star rating and achieve a HERS rating that will qualify the homeowner for a Department of Energy tax credit. In addition, we intend for this project to be a certified Chicago Green Home, be LEED (Leadership in Energy and Environmental Design) ready, qualify for the NAHB (National Assoication of Home Builders) green program, and the American Lung Association Health House program. The C3 has recently been preliminarily reviewed and enthusiastically supported by decision makers within the Chicago Building Department, Chicago Green Permit program, and Department of Planning. This integrated design process between our consultants, vendors, and city officials helps us make wise decisions early so that we can control expenses for the U-C3, and produce the most energy efficient building within a given budget.

Benefits for Chicago, the Environment, and our Residents

Providing an affordable, energy-efficient housing solution for the residents of Chicago is the primary benefit to the City, and reiterates Mayor Daley's initiatives to lead the way in energy and environmental conservation. This benefit goes hand in hand with Mayor Daley's pledge to provide a network of affordable options for not only low-income residents, but for the working middle-class.

In addition to providing affordable housing, this project addresses other key environmental issues such as (but not limited to):

• Green roofs and the reduction of heat island effect
• On-site renewable energy
• Overall reduction of energy use (and expenses) through highly insulated building shell
• Passive solar techniques and natural ventilation
• High efficiency mechanical systems and appliances
• Recycled/low-impact finishes
• Water-based & no-VOC finishes for superior indoor air quality
• On-site water management (no stormwater run-off into sewer system
• Minimizing nonpermeable surfaces
• Minimizing land useage
• Superior indoor air quality
• Minimizing water and utility useage
• Sourcing of materials from local vendors

The C3 is designed for the middle-income budget, integrating a holistic approach to the building process by merging economy with ecology. A modern open floor plan organized around a private courtyard provides a dialogue between an urban lifestyle and the natural landscape. In addition to eco-friendly amenities, the C3 is designed with components that reduce energy and construction costs, ultimately saving the homeowner money while minimizing impact on the environment.