The Why What and How of Affordable Homeownership for All (why we exist)

When we first started Inversion Design Build we had a lot of ideas of what we were going to do. They all seemed coherent in the office but came out as a jumbled mess whenever we shared them with others so I took a little time to put it all together in our “Why” document. This is an overview of our ‘why’ but if you want to read the whole thing you can find it [here]. Each paragraph below deserves its own post but today I wanted to give you the 20,000 foot view so you can see who we are and where we are headed.

Why

Poverty is a distortion of power. We alleviate poverty by affording people power over their own lives.

The disparity in income and wealth distribution in America today is at an all-time high especially when it comes to housing. Home ownership in America is on the decline, and housing affordability in many cities has been a problem for decades. We are currently experiencing a housing shortage, both nationally and locally our area which creates opportunities for speculators to buy existing homes and convert formerly owner-occupied units into wealth extraction devices. 

We believe in a future where housing is in harmony with community needs. this means it’s easy to find in the market, new construction keeps up with demand and homes are affordable at market rates. We believe anyone who wants to own their home should have the opportunity to purchase one, and that rental units are best managed by owners who live nearby. We believe that choices equal freedom and the more choices people have in housing, transportation, location, and lifestyle, the happier, more productive, and more engaged they will be with their families and their communities. We believe that all residents ought to have a financial stake in the well-being of their neighborhoods and see real dividends when it prospers.

Our mission is to afford anyone the chance to own a home.

What

We build new houses for home ownership that are connected to existing infrastructure, built with healthy materials, are energy neutral, and protected from speculators.

We seek out and build in locations that allow children to get to school safely on their own, have easy access to groceries, and are within walking distance to a park or outdoor recreation area. Obviously there is more to living than food, school, and recreation but having these three amenities nearby and easy to access gives people options for how they live their lives.

Rather than selling ‘starter homes’ that force families to move when they grow, we build units that are the right size for now, but have room to grow, expand and flex with the occupants over time. We build and sell you the home you can afford right now, but show you how to add that extra bedroom, finished basement, or accessory dwelling unit so you can build on and add equity to your home when the time is right and make sure it fits your family’s needs no matter what life brings your way.

Home is also where we spend most of our indoor time so it is imperative that the materials that make the house do not create a hazard, do not off-gas noxious fumes, and are durable enough to handle the pounding an active family can deliver. For that reason we make sure that all our homes have easily cleanable surfaces and are 100% free of red list materials  that are harmful to human health.

When you build a home, there are the costs and then there is the market value of the home which is what someone would be willing to pay for it. Well designed homes often command a premium price in the market over a home with equivalent size and amenities. We call that “Design Equity”. Design Equity is the value-added that we expect from all our units. At Inversion Design Build, rather than counting Design Equity as added profits and walking away, we capture it, and use it as down payment assistance for families that could not otherwise afford a home. Low income families are prequalified by our nonprofit partners and referred to our program. Once the family chooses the unit they want, the Design Equity is placed in escrow as a down payment and when the sale closes, the equity is theirs in the form of a new home. This allows us to sell more units to more families that are otherwise locked out of ownership due to price and availability, which in turn helps our business grow.

We recognize that the Design Equity Partnership represents a substantial transfer of wealth which can attract the attention of greedy speculators who look to take advantage of new homeowners through cash offers and dubious refinance schemes. To protect from potentially losing their equity, we arm our new homeowners with membership in a HomeOwners Association (HOA) with minimal membership dues designed to network with peers, disseminate best practices for maintenance and refinancing of a home, and ensure that units are bought and sold by owner-occupants, not speculators.

How

  • Real-Time Cost Estimating. Rather than lose time and effort waiting for cost estimates and slogging through painful value engineering processes, our architects generate their own cost estimates in real-time as they design. Our industry partners provide and input material cost estimating directly into our BIM software and labor estimates are generated automatically on a per shop-drawing basis that is updated with every new project. This empowers our architects to compare and refine design options down to the very last penny.
  • Shop drawings, not construction documents. Modern construction documents and specifications are designed as legal tools to protect architects and owners in the event of a lawsuit. This is necessary in most modern practices, but because Inversion Design Build is the owner, architect, developer, and contractor on all our projects, the need for all that extra paperwork is greatly reduced. Instead, our architects generate shop drawings that are sent directly to the assembly floor. They are also in regular conversation with the construction team about how to best execute the shared vision.
  • Panelized fabrication. By using a panelized construction system we can build most of each home in a climate controlled environment that is optimized for safety and efficiency. We reduce exposure to weather to a single build day and virtually eliminate the threat of onsite theft and construction waste. Panelized construction also lets us make much more accurate cost estimates and eliminates the need for dangerous scaffolding onsite.
  • Continuous Incremental Improvement – Throughout our company people work in small teams that have direct control over what they are doing and are encouraged to find better ways of working by eliminating waste (i.e. the tedious stuff that no one wants to do anyway). Ideas that cost little or nothing to try out will always be tested regardless of where they come.

Market and Affordability Targets

We are committed to making our housing affordable to as many people as possible. For starters that means targeting affordability at the area median income. In Yakima in 2021 the area median income is $60,300 per year per household. As our housing delivery model is further refined, our target per-unit affordability goal will decrease, opening up further untapped market share and housing equity opportunities for buyers below the area median income. 

In Washington State, minimum wage in 2022 will be $14.49 per hour. At full time this equates to an affordable housing payment for a $120,000 mortgage (assuming a 4% interest rate and median tax and insurance costs). Our goal by the end of Phase I is to have units on offer in Yakima county that are affordable for anyone with a full time job making minimum wage or more through our Design Equity Partnership. The secondary goal is for unit delivery to be scalable to meet demand and maintain no greater than a three-year waiting list.

The measure of a company is not in how much it earns
but in how much it gives away

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