Private v. Public: Is Habitat’s proposal to build a modular-home facility in Rifle really competing with private enterprise?
Habitat for Humanity Roaring Fork Valley’s proposal to build a new modular-home production facility in Rifle is undeterred, according to one official.
Regional Habitat President Gail Schwartz said, despite Garfield County commissioners’ feeble interest in financially supporting the project, every other entity is on board.
Rifle is leasing the land adjacent to the wastewater treatment center at no cost. The Associated Governments of Northwest Colorado has expressed strong interest in offering what’s called Enterprise Zone assistance. The Colorado River Board of Cooperative Education Services (BOCES) has partnered with Habitat to run the place.
“I don’t need their support, I don’t need their money,” Schwartz said of Garfield County, adding that they hold no oversight of the property. “I already have Enterprise Zone status underway. I already have major grants going underway.”
Amid this amalgamation of heavy interest, the commission in late February worried that supporting Habitat’s quest to build its modular-home facility would compete directly with similar operations. They also aligned affordable housing with potential increases in crime.
In what’s turning out to be an auspicious concept locally, Eco Dwelling LLC., a private entity owned by Fernando Argiro, opened a modular-home production facility on unincorporated county land just outside Rifle city limits. There, it uses cold-formed recycled steel and a 3D printer to create 900 square-foot one-story, two-bedroom dwellings that Eco Dwelling intends to place in several sections in Rifle. This is on the promise Argiro has assured multiple times that the units go for $265,000-$270,000 — nearly half the price of an average starter home in Rifle.
IS THE LAND SAFE?
The land Habitat looks to build on, which is adjacent to the city’s wastewater treatment center south of U.S. Highway 6, was formerly used for uranium production but it has since then been mitigated of hazardous residuals for some time, according to the Colorado Department of Public Health and Environment.
Venissa Ledesma, a marketing and communications specialist in the CDPHE’s Hazardous Materials and Waste Management Division, said in an email that they provided regulatory oversight of the proposed property while the Department of Energy and Legacy Management conducted site work in the 1990s. This included the removal of thousands of cubic yards of contaminated soils.
Ledesma also said the CDPHE issued an environmental covenant for the site, which restricts activities to ensure the protection of human health and the environment. The environmental covenant requires that prior to any construction activities, any plans that could disturb or interfere with the remedy must be approved by both CDPHE and the DOE’s Legacy Management.
“Based on our review,” she said, “the proposed pre-fabrication plant is an acceptable use because the exposure is mitigated through the required radon mitigation systems.”
ANSWERING A CALL
Habitat continues to build units up and down the Colorado and Roaring Fork valleys using traditional materials and construction methods. More importantly, all of these units are being sold at a certain percentage of Area Median Income — some argue a crucial effort to answer Garfield County’s call for more affordable housing. For a subdivision it’s currently building on Rifle’s south side called the Wapiti Commons, Habitat is likely to charge an incomparable $170,000-$190,000 for condos and $240,000-$290,000 for two-story townhomes.
Schwartz said, however, inflation and a lack of a local labor force could stymie Habitat from pursuing further affordable housing development.
“All of that is making the cost of construction, especially in the Roaring Fork Valley, just unattainable at this point when it comes to building affordable housing,” she said. “When I say that everyone’s on board, I would say that it’s recognizing that it’s a priority for Garfield County and the commissioners to really support affordable housing development in the Roaring Fork Valley, and putting a production facility where people need jobs is a win-win.”
Habitat is trying to build a 30,000-50,000 square foot modular-home manufacturing facility on the 7.11-acre parcel.
Schwartz said the facility is set to manufacture 100 homes in its first several years of existence, while it’s poised to ramp up production if operations go smoothly.
But based on the Roaring Fork Valley housing needs study of 2017, which now projects a need for 6,800 affordable units from Parachute to Aspen (including Gypsum and Dotsero), will the modular home facility be the ultimate answer to this need?
“We will only be making a dent in the need and clearly not competing with the private sector projects in the Colorado River Valley,” Schwartz said. “Most importantly, we’ll be able to create jobs and construct deed-restricted homes in Rifle for the Roaring Fork River Valley, where building costs are sky high in part due to the limited skilled workforce.”
If built, Habitat would use the very same progressive construction technique employed by Eco Dwelling. Cold-formed steel salvaged from a recycling plant in Utah will be converted into two-story houses using a printer, and the plant itself would be the first of its kind dedicated to public affordable housing on the Western Slope. Eco Dwelling is of course private, while there are two other modular home production facilities on the Front Range — IndeDwell in Pueblo and Fading West Development in Buena Vista.
But as Habitat seeks to build, it also seeks to train. Early conversations with BOCES indicate that the facility could likely train as many as 50 students a year, Schwartz said.
“If you get someone through,” she said of construction training, “they can be earning six figures.”
WILL IT COMPETE?
But while Habitat tries to create a workforce, cut construction costs and ultimately give more housing for less, Eco Dwelling worried this could in fact affect their bottom line — just like the Garfield County Commission estimated.
“Yes, it could compete with Eco Dwelling if they decide to sell their product to the public (which they did say was an option at that meeting), and we greatly appreciate the BOCC comments to support our ‘free market’ manufacturing facility,” local Eco Dwelling representative John Kuersten told the Post Independent/Citizen Telegram via email. “But, it is still a free country and if Habitat wants to build a factory using the same technology and process they are free to do that. It is up to others to determine if using taxpayer money is the best use of those funds, though.”
According to Eco Dwelling, the entity has invested between $12 million-$13 million into their Garfield County business venture, while its factory employs 12 people and another 35-40 indirectly.
Habitat actually almost established a partnership with Eco Dwelling to help build homes. But Eco Dwelling’s facility doesn’t have the capacity to build two-story homes, Schwartz said.
“Eco Dwelling supports the efforts of Habitat for Humanity and their mission to provide affordable housing in our area. While it is true that they learned of this process from our factory and we did offer to provide manufacturing services to them, they have a vision of a large regional manufacturing facility to provide not only for Habitat of the Roaring Fork Valley but to other Habitat areas such as Eagle, Summit County, Montrose and Grand Junction,” Kuersten said. “They are also wanting to use this facility for training the next generation of trades people in the valley.”
Kuersten said this manufacturing and steel construction process is catching on around the country and is proving to be an efficient and effective method to build housing while also being environmentally friendly and cost effective.
Eco Dwelling’s primary concern, however, is developing its own projects in a free-market environment. It’s not only building 900 square-foot units on 3,000 square-foot lots, it provides ownership of the land and the house while letting the owner enjoy full-market appreciation of their home value.
“Eco Dwelling is a different end product than Habitat builds and uses no government money or donations and at a reasonable and competitive ‘cost per unit’ while still returning a reasonable profit for the developer,” Kuersten said.
Eco Dwelling anticipates a building capacity of 50-70 units per year, while Kuersten said it is conceivable it can produce 8-10 units per week with its current facility and assembly method.
Eco Dwelling also looks to expand their existing production facility and is trying to obtain a new permit for it within the next two months.
“We need to start thinking about building more efficient and on a smaller scale — build what is needed for basic housing,” Kuersten said. “Then these people can build equity and move up on their own in a few years if they want.”
Kuersten said the concept of inclusionary housing where everyone gets the same house is “ludicrous and is a huge cost to taxpayers as they are all subsidized.”
“That is not going to get us where we need to be with housing,” he said. “Free market will develop a good solution and I believe this is a good start to that.”
PUBLIC v. PRIVATE
Kuersten said his personal opinion is that the free market will always provide a better long-term solution than the government and at a lower burden to taxpayers.
“The high interest rates and high prices have driven this change in housing and lot sizes but I believe it is a good solution to our housing problem, in addition to Habitat’s efforts,” he said.
Habitat’s proposal is right now in the pre-production stages with Rifle. But, according to Schwartz, if all doesn’t go accordingly, Habitat has options.
“We can move and look at an operation elsewhere,” Schwartz said. “We felt this was very central to where the jobs are needed. And we already have a working relationship with the city of Rifle, and this was a turnkey parcel for us.”
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