Four Ways To Affordable Housing Now

The spotlight is on affordable housing programs as the nation’s housing crisis continues, construction costs steadily increase, and the government continues mandates for more efficient processes.

That spotlight is revealing some ugly truths behind the inefficiencies of delivering affordable housing, with costs frequently reaching far above market rate delivered projects.

Lashondra Graves, The Apartment Lady, recently posted on LinkedIn that “the last federal response to the housing crisis resulted in a wave of LIHTC developments. These developments were backed by hundreds of millions of taxpayer dollars in the form of tax credits, land, and direct funding. And the rent? Paid monthly through subsidies. That’s two sides of the same public coin. That’s the gap. The issue isn’t speed or subsidies. It’s governance. We don’t just need to build fast. We need to build right. We need systems.”

Some builders are taking it into their own hands to avoid the costly red tape and bureaucracy of affordable housing financing to build homes that can be rented or sold at affordable rates but without using subsidies.

Here are four that are proof we can deliver housing at lower costs without subsidies, while also maintaining high quality.

Formula-Based Affordable Housing

In California, where RAND reports it is twice as expensive to build than in Texas, one developer has created a model that removes the bottlenecks of tax-credit financing, to prove that affordable projects can be built without reliance on government subsidies.

Anthony Gude, director of real estate development at Gude Capital + Partners, describes success as equal parts engineering precision and investment discipline.

“Everyone talks about the challenges, but they miss the magic,” he said. “You need the right team, the right timing, the right technical specification, and you have to line them up with legislation when there’s an opening. Each piece matters, but the real value is when they come together. You have to hit a triple every time.”

For Gude, this disciplined alignment forms the foundation of what he calls an operating system for housing creation.

After decades executing projects, many in offsite construction, he has refined this operating system formula into an open-source compliance and delivery platform. For developers, it’s a blueprint for more attainable housing, and for investors, it’s an entry point into the privately funded affordable housing market with disciplined cost control and scalable returns.

His Westchester, CA project uses this blueprint. The mix of single and studio units includes 80% of the 72 units reserved for renters at 80% of area median income (AMI), with the rest for renters up to 120%.

“We want to share how we’ve innovated and provide the compliance package for building this product,” Gude said. “This isn’t about monetizing knowledge, it’s about enabling others to scale and systemize.”

To maximize the site’s footprint, the project uses a steel frame over a podium system, enabling eight stories of housing where other build types would have capped density at about 30 units. Steel allows more design flexibility and verticality, while the higher density translates into stronger rent rolls and a more efficient use of capital.

“With steel, there’s more opportunity to innovate on the components,” Gude said. “Going vertical requires more talent and coordination, but that’s also what makes the economics work without subsidy.”

Gude emphasizes the importance of early alignment between ownership, fabricators, trades, and engineers. This upfront collaboration means predictability, protects execution, and safeguards investor capital. Fixed and variable factory labor is carefully managed, with core labor retained full-time and trade labor flexed as needed. Kitchen and bathroom modules are prefabricated early, while steel and other key supply contracts are locked in ahead of time to control pricing and hedge tariffs. Entitlements are pursued with a proforma-first approach that creates clarity for vendors and approvals that preserve both speed and optionality.

“It’s not about which factory or consultants, it’s how you engage them,” Gude said. “You engage them early, coach them on the operating system, and align them with ownership. The coach keeps the team together.”

He has learned to treat the supply chain as a partner, not a transaction, to reduce costly delays, for a competitive advantage, and to build a framework that can scale while passing savings onto the end user, instead of offsetting rents with tax dollars.

Unit construction costs are estimated at $277,000, arriving at rents 40% below comparable market apartments, proving that pre-construction design work married with the right product with the right site can deliver lower cost without compromising investor yield. Residents not only have lower rents, but both owner and operator and the resident benefit from lower operating costs from solar and high-performance façades.

By blending the technical rigor of modular construction with an investor-friendly operating system, Gude creates a path to deliver thousands of units at a fraction of traditional costs.

While this formula is delivering affordable, multi-story housing without subsidies, other solutions are available for single family, detached housing.

Affordable Housing Pre-Approved To Scale

By using a panel-first approach, Texas-based Fornidos is building homes—and even building factories to build more homes—with substantial savings over conventional housing construction.

Eric Benavides, the company’s CEO, ships structural, lumber-based panels out at about $58 per foot, which includes panels for foundation, exterior and interior walls, and roof systems. For a higher performance product, the panels are manufactured with light gauge steel, bumping the pricing up to $85 per foot. All the pricing includes finished siding, ZIP wall sheathing, insulation, sheetrock and installed windows and doors.

The Fornidos HomeSystem panels are the first to receive an International Code Council ESR approval, an independent certification that confirms that a product meets strict building code requirements.

The ESR-5284 certifies that the panels meet International Building Code (IBC) and International Residential Code (IRC) standards, which immediately delivers consistency and the potential for scale, unlocking the full potential of the panels by providing pre-approved construction drawings that ensure compliance with the standards of both building codes and paving the path for pre-approved plans for single family, duplex and townhouse units up to three stories.

With this certification, the panels qualify as standard stick-built construction, so they can follow regular mortgage processes, but still have the affordability benefits delivered by Fornidos. This certification also means an expedited and seamless permitting and inspection process anywhere in the country.

“It simplifies permitting, ensures IRC compliance, and can speed up municipal and builder adoption, establishing credibility for rapid, affordable housing deployment,” Benavides said. “For homeowners, ESR-5284 delivers affordable, mortgage-eligible homes through plans starting at $700, configurable into hundreds of floor plans and styles, from workrooms to three-bedroom homes.”

Plus, the builders save thousands in design costs and weeks in permitting, plus save time building because a Fornidos home can be constructed in about three days.

That home also will have some strong resiliency and sustainability features, handling up to 42 pounds of snow load, seismic C earthquakes and 130 mph winds. The light gauge steel product line can live up to seismic D and 160 mph wind.

Benavides also is working on designs and approvals to deliver two-story buildings. With increasing climate disasters, the HomeSystem can perform well for rapid deployment, meeting FEMA disaster readiness requirements.

“We can have thousands of panels at the ready, and if there is a disaster, you can start shipping and decide on which designs will work best in route” he said.

A Fornidos factory is about 30,000-square-feet and can produce enough panels to assemble 1,000-square-feet of living area per day. That factory can be set up for $150,000, have ICC factory certification, and be operational in less than six weeks with everything resourced locally.

“Our plans include main regional factories, but could rapidly scale using decentralized microfactories by shipping all the equipment needed for operations,” Benavides added. “Our process can help alleviate supply chain challenges by using off the shelf products offered in most all areas of the U.S. and with only 60 SKU items in the factory for huge benefits of production. The panel first approach makes a big difference – we build panels before houses.”

The panels are delivered to the site flat packed—currently Fornidos offers 14 IRC approved floor plans with hundreds of potential different configurations using variations of the four main panel types—that then follow a normal construction process.

The panel first approach is unique for its certification and its flexibility, while other systems are finding a different kind of magic.

One Pod Solves Affordable Housing

The magic behind Home Nation’s affordable housing solutions is in one little pod.

Paul Comino, founder of the manufactured home builder, designed a singular module that contains all the mechanical, electrical and plumbing (MEP) for the house in one pod. That pod can be priced at $250 per square foot and is the central operating unit for the home.

When the pod is delivered to a site for a home, it is part of a hybrid process of offsite and onsite construction, with the important part of the hybrid being that the MEP is in one self-contained unit.

This works because Comino estimates that it cuts $40,000 out of the cost of the home by streamlining the trades, by reducing construction costs, and by saving time.

The offsite portion of the build includes 80% of the skilled labor force, which cuts out 2.5 trades traveling to the job site. This construction method is faster, taking 15 to 20 days off the building schedule, while still delivering a high performance, tight building envelope in less than a week.

“The MEP for a typical home is over $30,000 and we can do the module for $25,000 to $30,000 delivered,” Comino said.

That delivery is well considered too. A complete modular has redundancy in the foundation, adding time and material costs. In addition, that modular built home would be transported in 16’ modules at about $30 per mile, adding up to $9,000 in freight for a 300-mile commute. Then, when it arrives at the site, a rental crane lifts it into place, costing around $5,000 for the day. Again, that module is lifted onto a foundation or crawlspace that costs about as much as the floor system in the home, doubling the expenses.

Home Nation can deliver the MEP pod for $3 per mile instead of $30 per mile. Then, the crane is smaller and only costs $1,000 per day instead of $5,000 per day. Plus, the foundation it connects to is only 200 to 300 square feet and the rest of the home’s footprint is slab, so there is only one floor cost instead of two.

Home Nation offers eight simple housing options with a plus size on each one.

“In 15 or 20 years, we will be one of the biggest independent home manufacturers in the nation,” Comino said. “We’ll sell 500 homes in the next 12 months across the country.”

As a long time, volume builder, Home Nation has big expectations. Next, a look at a smaller scale affordable solution in different proportions.

Land Collaboratives Deliver Affordable Housing

Park Street Homes was named to reflect its commitment to both the built environment and the natural environment by building homes with access to green spaces. The founder, Kevan Shelton, is committed to reinvesting in the communities the company serves, and empowering the community to protect its investment.

This isn’t just business, it’s personal for Shelton.

“When we started our company, it was about how do we build for people like us and it grew,” he said. “We were looking for a home in south Houston in the area I grew up in and we couldn’t find anything we could afford. We figured there were many other families like ours looking for a home. So, we looked at how we can build a product that they could come back home to.”

At the time he was looking, land prices in Houston were at a record high, so he looked for ways to obtain the land at a lower cost. Since then, Park Street Homes has built 100 market rate and affordable homes in Houston, without using subsidies.

Shelton found local organizations that had land available and worked programs with them that benefited both companies by the value it added to the community and the payback in social capital. For instance, Urban League Houston had a five-acre parcel that the organization didn’t have the skill or capacity to develop.

“They brought it to us to develop for 80 to 120 annual median income,” Shelton said. “They gave us the land. We then creatively structured a deal to leverage the market rate of the land as equity for lending. We bought it for less than $5,000 per lot, and we did all the development turnkey. The project hit the metrics to be affordable housing and it’s a great value for the community. It’s a win-win.”

Urban League retained the ownership of the community center. Park Street Homes worked with Urban League to create a joint marketing effort to sell the homes at $230,000, which was $100,000 below market.

“Urban League set the price point and gave us mandates on design, basically to build product that we could sell,” he added. “It was all done by leveraging the land and reducing the friction to get capital.”

To create density, yet maintain the green space that is important to Park Street Homes, the community delivered 32 homes, including market rate that sold at $400,000. The market rate and affordable homes sit across the street from each other, all designed as single family detached at 1,100 to 1,600 square feet.

“You cannot tell the difference,” Shelton said. “Lots of times affordable is built cheap. For us we sacrifice profitability to have a marketable product to compete with market rate. Our job is to pass savings forward that we’re not paying for land and infrastructure.”

Affordable Housing Solutions Are Future Opportunities

All four of these solutions are opportunities to look at the process of homebuilding differently, to approach solutions that aren’t already developed, and to reimagine them so that they can be more productive.

These innovators are creating the future of affordable housing without relying on government programs that can be costly and time consuming. This is where tomorrow is headed.