NORWOOD — “Didn’t I tell you it would be a pretty cool hole?” Benji Cook says to his 12-year-old twins, Maddy and Max.
He jumps into the concrete-walled pit. Maddy pulls the headphones down from her ears.
“Yeah so cool, Dad,” she says. “Where’s my room?”
The hole in Norwood’s new Pinion Park neighborhood, next to the new Lone Cone Library, will soon be the Cook family’s home. They are moving from a tiny cabin into a 1,216-square-foot, three-bedroom, three-bath home. They bought the factory-built house for $324,800, a fraction of what most houses cost in San Miguel County and its county seat, the mansion-loaded Telluride.
“We are just so excited about this,” says Rachel Cook, turning toward a freshly snow-dusted Wilson Peak in the distance. “Oh my gosh, would you look at these views?”
Norwood is an agricultural village of about 580 residents that has been swept up in the latest real estate boom that has permeated every corner of Colorado’s Western Slope, spiking prices well beyond the capacity of working families. The Pinion Park neighborhood is emerging as a model for easing the so-called housing crisis with a collaborative confluence of public and private, for-profit and nonprofit businesses, governments, agencies and groups.
Pinion Park is made up of 24 easy-to-assemble modular homes built in the first-of-its-kind Fading West modular home factory in Buena Vista. A unique lending program with low interest rate mortgages and down payment assistance has empowered paycheck-to-paycheck residents. Philanthropic investment, state grants and free land from San Miguel County have enabled the nonprofit developer, Rural Homes, to build infrastructure.
Rural Homes’ nonprofit model has harnessed these varied collaborators in a moment of record-setting real estate sales and a shortage of attainable homes that is altering the sense of culture and community in mountain towns. By aligning governments, foundations, lenders and a first-of-its-kind construction process, Rural Homes is able to sell new homes for less than $400,000 in a county where the average home price is more than $3 million.
Those prices are changing lives, enabling residents with important jobs to stay in their communities. Like the Cook family. Rachel manages a bank. Benji works for a small business. Maddy and her brother, Max, are getting their own rooms. Right now they share a loft in a 600-square-foot cabin in Placerville, about halfway between Telluride and Norwood. They’ve spent $63,000 in the past three years renting that cabin.
“That money just went basically in the trash can. We did that math and we were like ‘Wow, we need to look for a house,’” says Rachel, sitting on the porch of her family’s cabin on the San Miguel River. They offered the asking price — even a bit more — on four houses in the past few months. They were outbid each time.
Four doors upstream from the Cook’s cabin is a three-bedroom home on 11 acres for sale for $6.9 million, a $1 million price reduction from when it listed a couple months ago.
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They love their cabin, but it’s drafty. And small. They can’t wait for storage. All their snowboards and bikes are piled up outside.
“It’s time. A new house is going to give us a whole new outlook on everything,” Benji says. “The kids are so excited.”
Jennie Thomas is a 20-year valley resident who works as a mental health counselor for students and families in both Norwood Public Schools and West End Public Schools in Nucla, Naturita and Paradox. Thomas says her new home — a three-bedroom, three-bath she paid $352,500 for — will provide stability not only for her, but for the students who come to her for help.
“The potential for me to be there when they are in middle school and high school and they’ve been working with me since kindergarten, it’s there now,” says the 46-year-old single mom of a high schooler and a college student. “Historically there’s been a rolling train of mental health people who come here, work for two years and leave when they realize they can’t afford to be here any more. This allows me to give a long-term commitment to the kids in that community … which is so cool.”
Superintendent Todd Bittner has about 190 students and 43 employees in his Norwood School District. He is feeling the soaring prices of homes in his valley acutely.
“The reality is I don’t have a high school science teacher. I had an English teacher position open for three months,” Bittner says, inspecting the freshly poured foundation for a home for one of his district employees.
Bittner strolls the freshly paved streets between the lots, where teams of workers are pouring foundations for 24 homes. He wants to see Thomas’ corner lot. He claps when he sees her wide-open view of the San Juans in the distance.
“Keeping someone like her in this community is just paramount,” he says. “That’s what this is all about.”
He’s excited to see bright orange conduits — delivering 1-gigabyte broadband internet — sticking up behind the concrete. He’s giddy to see the Rural Homes program coming together. More rural communities need it. Just because the pain of the housing shortage is not as pointed as in metro areas doesn’t make it any less impactful.
“We’re in desperate need of support, state and federal,” Bittner says. “This is a crisis. It is absolutely hitting the breadbasket of our nation and we need to talk about it and we need everyone to work on this.”
The three needs for affordability
Paul Major was the president and CEO of the Telluride Foundation in 2015 when he helped launch the group’s Rural Homes Initiative to gather public, private and philanthropic partners to jumpstart development of affordable rental and ownership housing in southwest Colorado. The idea was to find a way to get essential workers — cops, teachers, government workers, nurses and small-business owners — earning about $50,000 a year into a home.
Major retired from the foundation earlier this year, capping a 21-year run. Now he’s the manager of the Rural Homes nonprofit, which is part of the Paradox Community Trust. He’s building roads and installing infrastructure for 14 Fading West modular homes priced at $200,000 to $400,000 in Ridgway, which could be ready for residents early next year. He’s working on plans for a project on 9 acres in Ouray. Another project is underway on an acre in Naturita. He’s talking with folks in Dolores and Alamosa about affordable communities.
Rural Homes offers homes to four groups of working residents from school districts, hospitals, emergency services and governments who earn between 60% and 120% of the area median income, or AMI. San Miguel County’s AMI is about $67,000 so Rural Homes works with buyers making between $40,000 and $80,000 a year.
For Rural Homes to offer attainable homes, three elements need to be in place.
The first is low-cost capital. Major has helped raise millions of dollars from charitable foundations such as Colorado Health, El Pomar and Caring for Colorado, which offered loans for construction of infrastructure at a 0.5% interest rate. The Colorado Department of Local Affairs and the Division of Housing also are providing financial support.
Then Rural Homes needs free land. San Miguel County donated the acreage for the project in Norwood and philanthropic funding has helped with the land in Ridgway and Ouray. The land must be flat and adjacent to existing utilities and town amenities.
And then construction must be low-cost. Fading West has that part handled, locking in 85% of the cost of the home before hammer hits nail, which eliminates the market fluctuations and costly delays of stick-built home construction. The key to Fading West’s affordability is that most of the home — up to 85% — is built in the factory, requiring minimal on-site labor.
“We can’t sell a house for $250,000 if a plumber has to drive from Montrose three days in a row to get it ready,” Major says.
The Lone Cone Library is just north of Pinion Park. The pickleball courts are across the street. A couple blocks away is the expanded hardware store. The Blue Grouse Bread bakery and the Mesa Rose Kitchen, a grocery and coffee shop, are adding new vitality to the quiet community.
“This isn’t theoretical anymore,” Major says of his group’s emerging solution to Colorado’s housing crisis. “We feel like we are close to this becoming a proven model. So close.”
Lining up buying power
Buyers get to choose from four models of homes made at the Fading West factory in Buena Vista.
The largest, a 1,216-square-foot, three-bedroom, three-bathroom stand-alone home with a garage, called the Hastings, sells for $426,400. Smaller homes with shared walls and storage sheds but no garages sell for as little as $225,000. A couple of the homes are styled after farmhouses. The others are mountain modern. The Norwood homes come with solar panels. Major worked with the Colorado Clean Energy Fund and San Miguel Power to create a program where the cost of installing solar panels is part of each owner’s monthly utility bill, which is reduced thanks to the solar power.
Pinion Park buyers had to line up all their financing before they could enter the lottery for the houses. They had to have local jobs and could not own assets greater than three-times the value of the home they wanted to buy. The home they were buying had to be their primary residence, i.e., no second-home owners.
There were 120 interested buyers who began the process in Norwood. That number fell to 19 when it was time for the Sept. 16 lottery, which Major says was expected for a first-time affordable project in Norwood. He announced firm prices — starting at $225,000 — in July. That was “gutsy,” Major says, given the rapid rise in the cost of construction materials. Asphalt, for example, has increased in cost by 75% since he set the home prices.
Major used a county commissioner and Norwood’s mayor stirring a tumbler of Ping-Pong balls to pick the winners. Each entrant had a top choice for their home and a couple backups. There were 14 names drawn that night. San Miguel County is buying three of the homes, including one for the Norwood School District. There are 17 buyers under contract and seven homes are available to people on a waiting list.
The Impact Development Fund is a nonprofit Community Development Financial Institution that works with underserved communities to help residents find affordable homes. The fund connected Pinion Park buyers with First Southwest Bank in Alamosa, which offered a 30-year mortgage with a 2.5% interest rate for buyers whose income fell below 80% of the area median income.
Major’s Rural Homes helped buyers with the down payments — up to $25,000. Buyers who use that program will pay that loan back after 30 years or when they sell.
“So if they can get up to $25,000 in down payment assistance, a two-and-a-half percent mortgage, you know, they’re good to go. They can buy a $300,000 house,” Major says. “We can reduce the cost of housing all day long and find new ways for subsidizing it, but you’ve got to get the buyer some buying power.”
“Everyone deserves housing”
The Norwood project is two months behind schedule. Which is pretty good for a housing developer, Major says. Most of that delay is from the Fading West factory, which is testing an entirely new process for home construction. There is no blueprint for Fading West.
“Everything we have learned has come from mistakes,” says Eric Schaefer, the head of sales and partnerships for Fading West Development.
The Fading West factory plan was created by Charlie Chupp. He spent years building kiosks for Starbucks, the ones in airports and grocery stores. He could build them on a Thursday and they would be shipped, assembled, staffed and serving joe by Sunday.
As he planned an affordable housing community in Buena Vista, Chupp wondered if that style of manufacturing could be used for homes. He embraced the Toyota Production System, a lean method of production that reduces waste, large inventories of components and the time factory workers spend waiting. It’s all about efficiency, speed and quality.
The Toyota lean philosophy hasn’t really been tried for modular home construction. So the Fading West factory is “a rough-draft company,” Schaefer says.
There are about 90 workers on the factory floor, working 10-hour days, four days a week. Each employee has a goal of getting 1 minute more efficient each day. When the factory opened in November 2021, it took 63 days to finish a house. That span is down to 21 days. If everything works perfectly, it could drop to nine days. If Chupp is able to find more workers to staff 24-hour-a-day shifts, he could be churning out a new home every few days. But it’s hard to find all those workers. (Irony alert: That struggle to find house-building workers is directly related to a lack of housing around Buena Vista, Chupp says.)
Eventually most of the workers will be able to work in all the stations. (“That really empowers workers,” Schaefer says.) As the boxes move through the 18 stations, workers erect exterior and interior, robotically sheet-rocked walls, electrical systems, plumbing, windows, kitchens and trim. All the engineered wood used for framing and joists is cut by computerized saws.
The boxes are floated on “air casters,” like those little plastic pucks on an air hockey table, as they shift from station to station.
“Two people can push 30,000-pound boxes,” Schaefer says.
What starts as two bare floors is a shrink-wrapped, road-ready home by the time it winds out of Station 18. A special crew in Norwood will add roofing, patios, garages and sheds. The idea is that most of the home construction is completed in the factory, which allows for a nearly year-round building season. That’s a big deal in Colorado, where homebuilding typically slows in winter.
Since the factory fired up, Fading West has sent houses to Poncha Springs, Ilium outside Telluride, Leadville and Chupp’s own The Farm development in Buena Vista. He’s got some heading east to Kit Carson soon, right after he finishes the Norwood order. He’s got two-story, multi-unit buildings on the schedule for Breckenridge. The order list for his homes is long and growing. Eventually, he envisions a second factory next to the one he’s fine-tuning right now.
But first, Chupp and his team are orchestrating a complicated dance with dozens of performers.
Brett Boersig spent two weeks learning how to use the six bridge cranes that move the sheet-rocked walls from the top floor of the factory down onto the boxes in the early stations. He never glances down at the 12-button remote in his hands as he deftly swings entire walls onto the floor below.
Did you happen to grow up playing video games? a visitor asks.
“Is it that obvious? Nintendo 64 was my jam,” says the 34-year-old.
Boersig has never worked in construction and never worked in a factory. He smiles a lot as he moves the walls along 12 different trolley tracks spread across the factory ceiling.
“This is a pretty special thing to be a part of,” he says.
Shannon Stief is 31 and studied public health in college. Like Boersig, she’s never built houses. And she’s not an electrician, even though she is the station lead for Station 6, where electricians install the rough-in wiring for the homes.
“I came here for this mission,” she says. She says she drives by houses she’s built at Poncha Meadows in Poncha Springs every day “to absorb what I do.”
“This allows me to create stuff that is really needed and addresses a public health crisis. Everyone deserves a home, right? I think a lot of people here feel the same way,” she says. “They want to be part of something that is super meaningful.”
Chupp says very few of the people he’s hired have experience in factories. A large number don’t even have experience building homes. He’s not just creating a new way to build homes, but a new type of homebuilder. And just about every one of them feels connected to what they are creating.
Like Sean Brown, the vice president of factory operations at Fading West. He moved to Buena Vista from Park City, Utah. He was renting a 700-square-foot, one-bedroom apartment with his wife there. He had a good job, but they were spending so much on rent, they couldn’t afford to go out to eat.
“We just never felt part of the community,” he says.
He says he came to Buena Vista motivated to address “a very tangible, very real kind of problem.
“At the end of the day, we are not just shipping a widget out the backdoor, we are creating memories for families,” Brown says.
Chupp makes clear it hasn’t been a smooth ride. It’s hard to be a developer in a small town with a big population of folks who are not keen on visionaries with new ideas for big changes. There are moments when he’s pondered a simpler, less arduous path.
“But then there are moments when you look out and see people moving into houses and you think, ‘That’s why you do this,’” he says.
The improvements to the factory process at Fading West have made it easy for Chupp and his team to let what he calls “scope creep” take over. That could lead to deeper investment so he could offer a wider array of features for homebuyers, but it also could spike prices for his homes.
“Not happening,” he says, describing how all his technological investment is focused on keeping efficiency and quality high and out-the-door prices low.
“Our mission is to create attainable housing,” he said. “How do we make sure we can produce high-quality, architecturally interesting, but also affordable homes? It’s got to be affordable, because if it’s not, we are missing our mission.”
CORRECTION: This story was updated Oct. 17, 2021, at 3:10 p.m. to clarify the funding sources for land for attainable housing projects on the Western Slope. San Miguel County donated the land in Norwood. Philanthropic organizations helped with land in Ridgway and Ouray, which are in Ouray County.