This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.
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A nationwide affordable housing competition based in Utah left three companies with a series of tools to expand their innovations, including a slice of the $240,000 jackpot. One of the winners may also make its Utah debut.
Ivory Innovations, a Utah nonprofit focusing on housing solutions, announced the winners of the fourth annual Ivory Prize last week. There was one winner in each category: Volumetric Building Companies in construction, BuildUP in policy reform and BlackStar in finance.
Abby Ivory, the managing director of Ivory Innovations at the University of Utah business school, says the inspiration for this year’s Ivory Prize stemmed from the construction industry’s adverse outlook to change. The goal, she says, is for real estate sectors to embrace change to meet the growing housing needs of people.
And as home prices continue to climb and builders face supply chain issues and labor shortages, the affordable housing problem has turned “into a full-fledge crisis,” said Clark Ivory, the CEO of Ivory Homes, the largest real estate developer in Utah.
Ivory encouraged developers throughout the nation to think outside the status quo of traditional construction.
“Be willing to take a little bit of a risk,” he said, “and commit to being a champion of innovation and affordability.”
He also called on Utah lawmakers to join in on uncovering “creative approaches to public policy and regulatory reform.” With more foundational support, Ivory says, the ideas the three winners pitched could grow in scale and contribute to a stabilized real estate market, not just for consumers but for investors as well.
Ivory Prize winners don’t just pocket $80,000 to advance their innovations, they gain access to various networks, investors, stocks and other avenues to expand the project beyond its home base.
“We don’t need just one solution to affordable housing,” Ivory said, “we need 1,000.”
The affordable housing winners
Finance
BlackStar Stability took the cake in the finance category. The Washington, D.C.,-based company targets predatory home loans and diverts the power back into the homeowners hands.
John Green with BlackStar says the company was created to help with low- to moderate-income families primarily trapped in Contract for Deeds (CFD). These people are often stuck in sticky seller financing contracts that give home buyers “an illusion of ownership,” he said, “when in reality, there’s not.”
(Courtesy of TWIG Media Lab) John Green and George Scott with Blackstar Stability stand in front of a brick building on a rainy day. Blackstar Stability is a winner of the 2022 Ivory Prize, an affordable housing innovation competition hosted by Ivory Innovations at the University of Utah.
Blackstar believes roughly 5% of all single-family properties owned in America are financed with a CFD or something similar. Fewer than one in five people signed into these contracts will ever own the home, according to Green.
Unlike a traditional mortgage, people tied to a CFD don’t actually own their home or property. Rather, the seller does until the full debt is cleared. But some homeowners, Green highlights, are not always aware of the stipulations of the contract. In other cases, the value of the home may be too low for a bank to approve the mortgage loan.
By purchasing the property from the seller, Blackstar swaps the CFD and provides the homeowner with a traditional mortgage.
Policy reform
BuildUp isn’t just tackling the affordable housing battle. It’s a trade school that teaches youth in Birmingham, Ala., the real estate ropes. By the time they graduate, most kids are managing properties or entering homeownership without crippling debt.
Mark Martin, the CEO of BuildUp, says the program allows youth, especially marginalized youth, to build wealth at an early age.
“You shouldn’t have to wait until you’re 60 to own a home,” Martin said.
(Courtesy of TWIG Media Lab) Mark Martin, the founder of the trade school BuildUP stands next to the school's student service coordinator, Gerrell Jones. BuiltUp is a winner of the 2022 Ivory Prize, an affordable housing innovation competition hosted by Ivory Innovations at the University of Utah.
They do this by purchasing abandoned and maintenance-intensive properties for students to renovate and eventually own or manage. Through BuildUp’s hands-on learning approach, Martin says graduates are fluent in a trade skill and the financial literacy to expand their skills into a small business.
“We’re not only solving the community issue of fair housing, safe housing and affordable housing,” Martin said, “but we’re also being part of the solution for the economic challenges that a community like Birmingham sees where you don’t have enough labor to even keep an industry afloat.”
Construction
Volumetric Building Companies (VBC) won for its use of modular construction to speed up the building process.
A handful of things set modular construction apart from traditional methods of building. The most glaring difference is modular construction is often conducted in a controlled environment, like a warehouse, rather than onsite. Once the structure is built, it’s then transported to its permanent location.
Vaughan Buckley, the CEO of VBC, says modular building can complete a building in nearly half the time compared with conventional construction, thereby decreasing the cost of labor and getting people into homes quicker. And VBC is a package deal. They take care of design, manufacturing, construction and shipping, streamlining the process.
(Courtesy of TWIG Media Lab) Vaughan Buckley, the CEO of Volumetric Building Companies, a modular construction company, smiles in a video submission. VBC is a winner of the 2022 Ivory Prize, an affordable housing innovation competition hosted by Ivory Innovations at the University of Utah.
Since 2015, Buckley says the company has grown 2,000%. Such growth has awarded VBC the opportunity “to explore the modular capability,” in terms of scale and production rate. VBC has contracted all housing types, including single-family homes, apartment complexes and multi-purpose buildings.
“We are really changing the way people think housing should be built,” Buckley said.
Testing the innovations in Utah
During the announcement last week, Clark Ivory said he is eager to bring VBC to Utah to put their modular construction expertise in action.
“We have a project in store for you,” Ivory told Buckely, “and we can’t wait to bring you out here and put you to the test.”
To test these housing creations, Ivory Innovations launched Ivory Innovations Operating Foundation, a sister nonprofit solely dedicated to affordable housing implementation. The Ivory Innovations Operating Foundation hopes to pilot the winning innovations, including VBC.
A lot of the time applicants have “great ideas” but it can be challenging for the companies to reach a large scale, said Abby Ivory, the managing director of Ivory Innovations.
Part of the nonprofit’s purpose is to help these companies obtain “a better proof of concept” by collecting data and research around these innovations “to make housing more affordable and create change,” Ivory said.
(Courtesy of TWIG Media Lab) A complete housing structure built by Volumetric Building Companies, a modular construction company on the east coast. VBC is one winner of the 2022 Ivory Prize, an Utah affordable housing competition hosted by Ivory Innovations at the University of Utah.
And while partnership talks with VBC and Ivory Innovations are early in on the process, Michael Parker, the vice president of strategy at Ivory Homes, says he is anxious to bring VBC’s vision to Utah for a potential multi-family housing project.
Before VBC, Parker compared modular construction to “Lego not being in charge of its own instruction manual,” due to all the moving parts that complicated project completion. He specifically pinpointed VBC’s streamlined process that cuts out a lot of the technical work of home building, calling the company “the Lego of modular construction.”
(Courtesy of TWIG Media Lab) Volumetric Building Companies, a modular construction company, moves a housing part. VBC is one winner of the Ivory Prize, an Utah affordable housing competition hosted by Ivory Innovations at the University of Utah.
But there are some kinks to iron out. City zoning laws would most likely have to change, Parker says, to allow the structures to occupy the property. More importantly, Parker notes transportation of a modular building is only affordable if it’s being shipped within a 200 to 400-mile radius. Beyond that, it could become cost-prohibitive. Currently, there isn’t a modular construction company that produces to VBC’s scale within that mileage limit near Utah.
“We’re pretty apt to go down this path,” Parker said, “but getting a mature partner in the right geographical location would be key.”
Editor’s note • The Clark and Christine Ivory Foundation is a donor to The Salt Lake Tribune’s Innovation Lab.
