One of the Top 4 Innovators on Housing Affordability for 2019

Business growth and innovation should be considered as a whole in the builders world. The Ivory Prize in Housing Affordability was seeking to recognize the most ambitious, scalable and innovative solutions to address housing affordability. Ivory Prize judges announced winners, four of them, on April 10th, 2019.

Winner for the Public Policy and Regulation Reform was The Alley Flat Initiative.

Here’s an overview of the program:

The Alley Flat Initiative (TAFI) is a collaboration between the University of Texas Center for Sustainable Development (UTCSD) and the Austin Community Design and Development Center (ACDDC) that employs innovative ADU policy with a number of underutilized alleys to create additional dwelling units by tucking small, single-family homes on existing lots. By creating a ‘one-stop shop’ for income-qualified homeowners, TAFI provides personalized support throughout the development process, which includes green design, financial education and pre-qualification, financial assistance, property management training, and construction guidance.

Here’s how Ivory Prize judges summed up the merits of the Alley Flat Initiative.

Judges recognized The Alley Flat Initiative (TAFI) based on their innovative efforts to change the policy framework in Austin, Texas to allow for the adoption of Accessory Dwelling Units (ADUs) – often using underutilized alleys to create additional dwelling units by tucking small, single-family homes (ADUs called Alley Flats) on existing lots. In addition, the Alley Flat Initiative has developed a “one-stop shop” for income-qualified homeowners providing personalized support through the development process including green design, financial education and pre-qualification, property management and construction guidance.

Also, The Alley Flat Initiative has partnered with the City of Austin’s policymakers and department leaders to design development incentive programs to promote income- restricted ADUs and to provide assistance to lower-income owner-developers who are facing displacement, due to rapid growth, so that these individuals are able to increase their income from the rent generated by the Alley Flats.

In his article for the Architect John McManus states their pitch on hitting the three primary targets of the Ivory Prize criteria.

Innovation: TAFI illustrates its innovative characteristics through its “one-stop shop” process for constructing and financing an ADU. TAFI offers nine-floor plans that range from 350 square feet to 950 square feet. The program works with the Austin Housing Finance Corporation, an instrumentality of the City of Austin, to design a program that unlocks incentives and financing tools commonly available to large-scale developers, making them available to low-income households. While this program is still under development, it is designed to offer a second-lien financing structure to decrease development costs, while providing technical assistance throughout the development process.

Scalability: Since 2005, 10 Alley Flats have been completed, 4 are under construction, and 4 are in development. TAFI has been able to approve ADUs for multiple different zoning requirements. In order for this project to increase its scale, there needs to be additional funding in place. This project, with respect to the construction of ADUs, can be implemented and scaled in any municipality that has ADU laws in place.

Sustainability: TAFI must use public and community‐based financing tools to achieve its greatest impact. A major issue for TAFI is construction financing for the units, where estimations range from $85,000 to $120,000 a unit. A lack of control over construction costs can be detrimental to funding requests from various organizations. One strong financing and development program through the City of Austin is the SMART Housing policy and development review initiative. SMART (Safe, Mixed-Income, Accessible, Reasonably‐Priced and Transit‐Oriented) Housing is a preliminary step to access expedited processing and fee waivers if a developer meets certain affordable housing criteria.

Programs such as Alley Flat combines a very iterative ADU that can drop onto each property with a fundamental change in local zoning, permitting and taxation laws that allow owners to create new revenue units on their property, which benefit both the homeowner and the potential renter, says John McManus for the Architect.

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