In an innovative push towards solving its housing affordability crisis, the State of Colorado has earmarked nearly $38 million in loans to jumpstart the local production of modular homes. The move, announced this week by Governor Jared Polis, alongside the Colorado Economic Development Office and the State Housing Financing Authority, aims to increase the availability of cost-effective housing options for Coloradans significantly.
The funding, which offers below-market interest rates, will be allocated to eight developers with the collective goal of producing 4,755 modular homes annually. This initiative focuses on boosting the housing supply and emphasizes creating these homes within the state to reduce costs and foster local employment. The effort will generate approximately 1,280 jobs across Colorado communities, including Denver, Aurora, Pueblo, Buena Vista, Durango, and Florence.
Among the beneficiaries are three established housing manufacturers in Colorado, two startups within the state, and three out-of-state enterprises enticed to contribute to Colorado’s housing market. Littleton’s Huron Components and California-based Azure Printed Homes are set to commence operations out of Denver. Moreover, Vederra Building Systems is poised to revamp a factory in Aurora to specialize in constructing more energy-efficient modular homes.
This strategic move comes at a critical time as Colorado grapples with soaring housing costs, with most homes in the metro Denver area fetching prices north of $500,000. The pivot to modular homes, prefabricated off-site and assembled on location, is seen as a viable solution to expedite the availability of affordable housing. Historically, the modular home market in Colorado has been limited, with about 88% of such homes in 2022 being imported from outside the state, inflating costs by an estimated 8% due to shipping expenses.
The funding sources for these loans include the Innovative Housing Incentive Program and the Affordable Housing Financing Fund, signaling the state’s commitment to innovative solutions for its housing challenges. The selected companies will produce diverse housing types, from panelized and tiny homes to kit houses and 3D-printed dwellings, reflecting the state’s holistic approach to addressing housing needs across the spectrum.
Azure Printed Homes, recognized for its pioneering use of recyclable materials in 3D printed homes, plans to leverage nearly $4 million in loan funds to construct over 350 tiny homes in Denver. This approach promotes sustainability and brings construction closer to communities, potentially revolutionizing how affordable housing is delivered in the state.
Similarly, Vederra Building Systems’ $6 million loan will support the construction of 316 units annually in Aurora, where the local government has recently made strides to facilitate modular housing development. The company’s focus on net-zero homes that meet Department of Energy certification standards exemplifies the state’s forward-thinking approach to environmental sustainability and economic growth.
Governor Polis hailed the initiative as a vital step towards expanding Colorado’s housing supply to accommodate budgets of all sizes. As the state endeavors to catch up with the growing demand for modular homes, the collaborative effort between the public sector and innovative companies signifies a hopeful future for Colorado’s housing landscape, making affordable housing more accessible to its residents.