Townhomes try a new tack to attain affordability

Advocates for affordable housing like to say they need plenty of policy tools to provide more units across Chicago.

In East Garfield Park, one such tool is getting its first tryout, and early results suggest it could come in handy in other neighborhoods, especially if the goal is suitable homes for families.

At Congress Parkway and Francisco Avenue, a low-density residential development is underway. As it breaks ground for a second phase, it’s also breaking ground in innovation.

In an apparent first for Chicago, it uses modular construction in a townhouse setting to hold down costs and deliver units at a fraction of what others in the area cost. In the spectrum of “affordability,” this is classed as workforce housing, priced generally for working couples early in their careers. Think of those in health care, teaching or first responders.

Called Harrison Row Townhomes, the project is part of a program run through the city’s Housing Department. These are for-sale units, not rentals, and the buyers can’t make too much money. The rules say the units can be sold only to those earning no more than 120% of the area’s median annual income. In Chicago, that puts the program’s limit at $89,520 for a couple, $111,840 for a family of four.

The units are priced to be affordable at those income levels. All, so far, are three-bedrooms, and in the first phase they went for $229,000, said J. Michael Drew, founding principal at Structured Development. Three-bedroom units in the second phase have a different layout and will be priced at $245,000.

“You go maybe three blocks east and you’ve got homes going for $600,000-plus, so this is definitely a bargain. Our buyers can build equity that they wouldn’t have in rentals,” Drew said.

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Structured Development and its partner in the second phase, Black-owned Fain’s Development, is working with Kinexx Modular Construction, a young company making its mark.

Modular-built homes are assembled in sections in a factory and brought to a construction site to be put together, maybe in a day. With a factory on the Southwest Side, Kinexx has developed plans with tight Chicago lots in mind, forging into a market where one ballyhooed venture recently failed.

“Ours was designed to be an urban infill product,” said Joshua Braun, CEO of Kinexx.

The steel-framed components can be transported without delays from wide loads or height restrictions and, since the building materials don’t sit in the open for days, there are no losses from theft or weather exposure, Braun said. Once the sections arrive at the site, the home is about 75% done, he said.

“The last one we delivered, we started the work on-site at 7 a.m., and we were done by 2 p.m.,” Braun said.

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Kinexx has built single-family homes in Back of the Yards and in South Shore, and has partnered with West Side organizations on an eagerly awaited plan for 250 single-family homes in North Lawndale in the next three to five years. Its project in East Garfield Park is the first time it has tried townhomes.

The work has made for a quick expansion at Kinexx, which Braun said had just six employees in May 2020. He’s at 20 now and is looking to add a few more in coming months.

“This is a group that we have seen deliver on modular home ownership,” said Housing Commissioner Marisa Novara. “I would describe [Kinexx] as quick and nimble, which are words I don’t get to use enough in my field.”

The company is succeeding where a similar venture by Skender Construction in cooperation with the Carpenters union failed in 2020 after operating a little more than a year.

Skender blamed a slowdown during the pandemic that scared off lenders. Kinexx is a nonunion shop, which can be a sensitive topic on construction sites here. Braun said he’s had no criticisms so far and is just toiling to keep his products affordable.

“It’s a math equation, really. And typically, union builders are not building single-family homes or townhomes,” he said.

When finished, targeted for the end of 2022, Harrison Row Townhomes will consist of 40 units, all but five to use modular construction. The five to be built the conventional way will have four bedrooms and be priced at $249,000. Drew said six of the seven units in the first round have sold.

Deed restrictions prevent buyers from trying to flip the homes at market price, although sellers are allowed to take out some of their equity.

Drew’s company is backing the project as part of an affordable-housing obligation it incurred for a mixed-use development on the Near North Side. The second-phase townhomes will front Harrison Street on deep lots that permit rear-facing units to overlook a yard. Drew said Chicago’s affordable-housing set asides put too many studios or one-bedrooms in high-rises, poor options for families.

Since his project is townhomes and not condos, there are no condo association dues. Those monthly fees are one reason among many why homeownership can be a dream beyond reach.