Editor's note: This story is part of Southwest Michigan Second Wave's series on solutions to affordable housing and housing the unhoused. It is made possible by a coalition of funders including the City of Kalamazoo, Kalamazoo County, the ENNA Foundation, and LISC.

You see them pop up on vacant lots here and there in Kalamazoo's core neighborhoods. 

New houses, nothing fancy on the outside. But there's a lot of energy efficiency on the inside. Also on the inside are families who might never have been able to afford a new home. They will now be able to pass these homes down to their families.

They're built by the Kalamazoo Attainable Homes Partnership. 

Getting new homes to people is made possible by a big team of members, from the hammer-swingers doing the construction to organizations funded by Kalamazoo's philanthropists, KAHP vice president Kevin Osborne says: The Home Builders Association of Western Michigan, KNHS Home Ownership Services, LISC, and the Kalamazoo Foundation for Excellence. 

Basically, the hammer-swingers are KAHP, building for KNHS, with funding from the Foundation for Excellence.
 

KAHP Homes

Began building first house: 2019

Built: 20

Under construction: 6

Due to be built in the next round of construction: 10

Participating builders: 9

If Osborne were building the same house -- their basic style of four-bedroom, two-story house with enough green tech that puts them in the top one percent of energy efficiency in the country -- for his regular Osborn Construction customers, he'd charge them $300,000, he says. 

The cost that goes into building them is around $215,000. Through the KNHS program, they're being sold for "$160,000-ish." Costs can vary for the type of house, Osborne says.

He and the other builders in the Partnership haven't stumbled on some secret construction method that's cheaper than others. The houses are sold "for significantly less than they cost to build, even with all the discounts and everything that are going into them. The only way that that happens," is through Foundation for Excellence, Osborne says.

"That other partner is covering the difference on what it costs to build versus what it actually is sold for," Osborne says. "There's not too many places in the country that have an organization like that. We're pretty lucky in Kalamazoo to have a lot of the philanthropists and stuff that we have around here."

Up-front attainable, long-term affordable

"We're pretty committed" to the Kalamazoo Attainable Homes Partnership, KNHS executive director Beth McCann told Second Wave in March. "We have a great group of builders that understand the mission of getting low-to-moderate income people into homes." 

With help from the City, KNHS can get the prices for these new homes down to "affordability level," McCann said.

But with the rising price of construction post-2020, building houses that low-to-moderate-income families can afford is a struggle. 

"Well, with this program we went for the word 'attainable,' instead of affordable," Osborne says.

"Building an affordable house, you have to look at long-term costs, not necessarily up-front costs," he says.

Kevin Osborne, vice president of the Kalamazoo Attainable Homes Partnership, with Beth McCann, executive director of KNHS, on the site of another build in October 2022.Homeowners know that there's more than a mortgage to pay to keep a house.  

"There's a lot of features that go into these houses that cost more upfront, but save money long term." 

From the highly-insulated walls to low-temp heat pumps that work down to the -30s, "we had to find something that was incredibly efficient, one, to build and two, to be able to heat and cool."

The R-25 walls, and R-60 attics (R-value is resistance to heat flow) that go into the Partnership houses are at the top end of the Energy Star recommendations for southwest Michigan. "Ultimately that's going to help lower the monthly utility bills for the people who buy them."

Consumers Energy, one of the partners, covers "some of the expenses to get these things super energy efficient." In addition to triple-pane windows and heat pumps, "they've been providing solar for these houses as well." Again, that  "drives the monthly utility bills down significantly."

Osborne recently talked to a customer living in a house built a couple of years ago. "She showed me her bill for the month of August, and her total utility bill was $38. That's heating, hot water, cooking, everything." 

She told him of a neighbor who, in the winter, complained that their gas bill was $800 that month. A house built through the program likely gets billed $50 a month for heat in the winter, he says.

The latest build by Kalamazoo Attainable Homes Partnership on Lowden St. in Oakwood."If you're saving $750 a month in utilities, that goes a long way toward either mortgage payment, college tuition, or whatever." 

Competitors working together

"Every detail of these houses we've looked over" to cut costs without compromising quality, Osborne says.

Many of the houses are on narrow city lots. He says the houses need to be 20 feet wide, which can also help lower the costs since they don't need basement supporting walls or bearing beams that a wider house would need, saving $1,000-$1,500.

"If I can figure out how to save $1,000 on a house," and other builders in the program can figure out other ways to save, "without sacrificing quality," all the savings add up. Multiply that by 10 new houses, and the program can save tens of thousands of dollars.

"There's probably eight or ten different builders involved," he says. "We all work together and share information with each other trying to help better each other, even though outside of this program we're in some cases in direct competition."

It can be a competitive world within the Home Builders Association. "Normally, me and Builder B are bidding on houses for the same customer," but for the KAHP "we're helping each other," he says. "It takes a unique company or individual to be able to work with something like that to help this program."

Are Osborne and Builder B learning techniques they can use in their usual businesses? "Yup." They're learning techniques they can "carry into our regular customer base and give them a better product for a little bit less money."

Generational wealth

Though the houses may be inexpensive, they're not cheap.

One of the major reasons poverty is passed along from generation to generation is that families have nothing but poverty to pass along to their kids. They may have rented their whole lives. Or, they may own a house with serious issues.

Osborne says one of the major goals of the builders is to build "Parade of Homes-quality houses." The HBA's showcase of new and remodeled houses, Parade of Homes presents houses that usually look fancier and larger than what the KAHP builds, he says. 

"These houses, they're really not that impressive size-wise or architecturally or anything like that." To keep prices low, they don't include "the things that look fancy, but all they're for is for looks." But structurally, "these are very high-quality houses. We're building these to last for 100-200 years."

"This is something they can hopefully pass on to their kids.... Housing is one of the key things to help lead to generational wealth," he says. 

"I, personally, have a very nice house that was in Parade of Homes, and I don't have triple pane windows in my house, I can tell you that." 

A unique program 

"Unfortunately, right now there's nobody else in the country that's been able to build these kinds of houses for this affordable of a price," Osborne says.

The houses' energy use has been measured, and has been found to be in the top one percent of energy-efficient homes in the country, he says. The financing of the partnership makes such homes-of-the-future attainable for low-to-moderate-income families. 

"There are people all over the country that are looking at the modeling that we've done, trying to be able to make it happen. But it takes a lot of people who care about the community that are willing to invest the time and work, together, to do it," Osborne says. 

"We're really trying to help Kalamazoo by getting people into high-quality attainable housing that they can afford to live in."