In a Housing Crisis, Building More Affordable and Sustainable Homes is a Solution

The United States is facing a housing crisis. Across the country, supply is scarce and prices continue to soar. Most people employed in full-time, minimum-wage jobs can’t afford to rent even a modest two-bedroom apartment—in any state in the country.  Affordable, sustainable homeownership is integral to building household wealth but the path to homeownership is especially difficult for Black and Latino households who historically have had less access due to systemic barriers. Only 43.4 percent and 51.1 percent are homeowners, respectively, compared to 72.1 percent for White households. First-time buyers made up only 26 percent of the housing market between July 2021 and June 2022—the lowest level since 1981. 88 percent of those buyers were white—the highest level in 25 years.  The National Low Income Housing Coalition estimates that there’s a need nationwide for at least 7 million more affordable homes. 

Exacerbating the already short housing supply, in 2022 natural disasters caused approximately 3.4 million people to evacuate their homes in the US. When homes utilize construction materials that can’t withstand extreme weather, they are especially vulnerable to weather events and are particularly at risk when they’re located in regions prone to flooding and excessive heat, like much of California. These homes also tend to be located in low-income communities.

In Southern California, a new pilot program, supported by a $3 million commitment to Neighborhood Partnership Housing Services (NPHS) from JPMorgan Chase to increase the supply of affordable, sustainable, and climate resilient homes for cost-burdened communities, including  households of color, is seeking to not only increase housing supply but also its resiliency.  

 “Housing affordability and sustainability are focus areas of the firm and affect communities across the country, so we’re proud to support organizations advancing both issues together,” says Mercedeh Mortazavi, vice president of global philanthropy at JPMorgan Chase. “To address the needs of the communities we serve, we need to have holistic approaches to solving the most challenging issues.”

JPMorgan Chase is proud to support a number of organizations working on scalable, innovative, climate-resilient affordable housing models like NPHS’s.

The program from NPHS, a nonprofit organization dedicated to community development, revolves around a factory-built housing model. This innovative model is not only less expensive, but also more sustainable. Building homes in a factory can reduce construction costs by 20 percent. Those savings reduce the selling price, opening homeownership opportunities to lower-income buyers. Manufacturing the homes indoors, using sustainable construction materials, can lower carbon emissions by up to 3 tons. The homes themselves are climate adaptive and energy efficient, which saves the homeowner money over the long term.

“Our new factory-built model creates an equity-driven, manufactured housing-supply platform,” says Clemente Arturo Mojica, CEO of NPHS. “This housing is being intentionally created to foster the [economic] growth of people in underserved, distressed communities.”

Today, NPHS seeks to make homeownership possible for first-time buyers like Noraly Sainz, and particularly those from underserved communities, as access to quality  homes at an affordable price range is scarce. In 2020, Sainz’s husband passed away, leaving her to care for their four boys, all of them under the age of 10, in a 900-square-foot, two-bedroom apartment. Anxious about their future, Sainz submitted an application to NPHS. A year and a half later, she was able to purchase a factory-built, brand-new three-bedroom home—complete with a dining room, porch, and garage—in the city of San Bernardino. 

Both spacious and energy-efficient, Noraly’s home, like all of NPHS’s houses, has the highest Energy Star rating, which will help her save as much as $475 on her annual utility bill. Built to wild urban interface specifications, the house is both fire resistant and climate adaptive, with a solar-ready roof as well as a 200-amp meter upgrade that can accommodate a charging station for an electric vehicle.

Sainz discusses how much her life has changed since moving into their new home. “At first, it seemed too good to be true,” she says. “I was able to become a homeowner, even though I’m in the low-income category.” 

The opportunity to own her own home—to build equity and financial security—has given her immense relief during an extremely challenging time, she says: “You have no idea how good it feels, just to be able to give my kids this kind of space, is the biggest gift.” She’s eager to share her story, she explains, because she wants other people to benefit from these programs too.

A significant philanthropic commitment helped fund the construction of these innovative homes and showcased proof of concept to help catalyze additional investments. JPMorgan Chase's support of the program is part of the firm’s $400 million, five-year commitment to improve housing affordability and stability for underserved households.

^{Disclaimer: Neighborhood Partnership Housing Services is not affiliated with JPMorgan Chase & Co and its affiliates.  JPMorgan Chase & Co and its affiliates are not responsible for any products and services offered by Neighborhood Partnership Housing Services and does not make any representations or warranties of any kind express or implied about the completeness, accuracy, reliability, suitability, or availability for any particular purpose.}