Forest to Home: A Model for the Future
Finding a scalable and green solution for affordable housing has long been the challenge for well-intentioned and creative minds across many organizations and professions – foresters, architects, builders, civic groups, philanthropists and nonprofits. The challenge is to address the issue in a holistic way.
Too often, we arrive at partial solutions that kick the harder problems down the road. To take one example, we build quickly with “sticks over bricks” but rely on carbon-intensive concrete and timber from unsustainably managed forests.
Forterra is a Washington-based nonprofit land trust that conserves and stewards land, develops innovative policies and supports sustainable rural and urban development. We see the deep inter-connection between people, land, water and land use, and that effective solutions must consider all of the above to be viable over the long term – Land for Good.
The Supply Chain
Our Breakthrough Challenge housing innovation encompasses a forest-to-home supply chain that begins with sustainably managed and harvested trees and ends with beautiful homes for people who make less than the area median income. The supply chain within our model is local and sustainable over the long term.
At the center of the forest-to-home strategy is modular cross-laminated timber (CLT), a subset of mass timber. CLT is a structural wood panel product manufactured by gluing together alternating perpendicular layers of wood.
CLT relies on a resource that is renewable, abundant and, if farmed and harvested to a high standard, can be a source of carbon sequestration rather than carbon emission.
Processed at a nearby factory, these trees are fabricated into CLT panels and prepped for modular construction. CLT modules are completed in the factory and assembled on-site.
Radically Lower Costs
One of the primary challenges of affordable housing is the cost of construction. Current median incomes simply do not support current construction prices in a free market. For the decade from 2009 to 2019, the average income in the state of Washington rose 25.8% to $69,700, according to the Washington Office of Financial Management (OFM). The median single-family home price surged 58.8% to $397,000 over the same period, also from the Washington OFM. Without a significant down payment, that average income in most cases cannot support the mortgage amount needed for that price of home. The ability of people to afford housing is therefore inherently diminishing. The need for affordable housing is growing.
Looking objectively at the existing housing supply chain, there are many areas where costs could be reduced, from materials to labor to the cost of ownership. None should be overlooked if we are to solve this challenge.
Labor comes first in sequence and should be relatively inexpensive. Unfortunately the opposite is currently true. By some estimates, up to 40% of tradesmen’s and tradeswomen’s time is spent on waiting or commuting. CLT is different – a well-run factory is always busy and can focus on in-house operations instead of commutes.
CLT can also significantly reduce costs associated with on-site construction. CLT modules come with finished floors, kitchens and bathrooms along with roughed in mechanical, electrical and plumbing, doors and windows, drastically cutting on-site construction costs.
After all the upstream costs have been minimized, the final opportunity lies in how the homes are financially structured for home buyers. Most home buyers are confronted with a large down payment and other fees associated with traditional mortgages. Once you assume ownership, repairs are made at the owner’s cost and without the benefit of leverage. When the home resells, it is sold at market rate and usually to the highest bidder.
A nonprofit co-op ownership structure doesn’t require a large down payment, leverages the combined ownership for repairs and can limit the resale price to prevent price inflation.
While the cost of affordable housing should be minimized, the social and economic impact should not. Forterra’s modular CLT system begins with job creation in rural timber towns and stimulates an economic ripple effect from there.
In the urban communities where the modular CLT units become homes for families who couldn’t otherwise have afforded a home, the social and economic impact is palpable.
Ownership brings stability and continuity to families and communities. A sense of community flourishes among those who have long-term stakes in its success. Because the homes are designed to fit well into the budgets of people whose jobs pay less than the area median income, homeownership costs will be less likely to contribute to a family’s financial instability than comparable models of living.
Not the least of the important features of affordable housing is its cost to the planet. Creating affordable housing means more than a lower purchase price for consumers. Increasingly, the answer to responsible affordable housing must also be scalable and not compromise the health of future generations through environmental harm.
Both steel and concrete – widely used building materials – undergo massive carbon emissions in their manufacture. Mass timber, on the other hand, can be a source of carbon sequestration and retain CO2 for decades or even in perpetuity.
Through modular CLT, we see the opportunity to commit to sourcing sustainably managed and harvested timber to minimize environmental impacts and to prove the long-term strategy that lowers the cost for people and the planet.