A Housing Model To Change The World
- Finance – Develop a model that would provide financing for homes to be purchased by individuals living in Colonias that are purchasing a lot using a “Contract for Deed” and then building a structure on the land. These individuals and families make less than the poverty level and may average $8,000 to $10,000 per year. The financial model would have to consider how to purchase the contract for deed from the developer/owner and restructure an instrument that would finance land and housing that would be within the purchasers wherewithal to pay (estimate of $150 to $250 per month). If land is owned by the resident a model would need to be developed that would allow refinancing that would include housing. Costs of the homes would have to include infrastructure costs. Traditional mortgage structures might have to be replaced with a new model.
- Pricing – at today’s mortgage rates the amount that could be financed on a 30 year mortgage and afforded by very low income families would be around $15,000 to $20,000. Monthly mortgage payments would be around $120 per month at current interest rates.
- Housing - housing would have to be high durability and very low cost. Houses would probably need to be built for $5,000 or less. MIT and others have developed several such models. LED lighting and methods of natural heating and cooling might be employed.
- Infrastructure – many Colonias have no fresh water, sewer, electricity and very poor roads. Technology would have to be incorporated that would provide Colonias with water using efficient water collection and filtration systems (slow sand for groups of homes). Sewage systems would need to be developed to serve homes or groups of homes efficiently at a very low cost that are extremely durable (these are available on the open market). Solar and wind energy would be used to generate basic energy needs if other forms of energy are not available. Roads and drainage would need to be low cost and very durable.
- Create an environment that is self-sustaining and promotes growth for supporting local economies as well as fueling next generation innovations. Much of the needed construction and infrastructure work could be provided by the residents of the Colonias.
A developer could then use the plan to redevelop Colonias. The developer would orchestrate the purchase/refinancing of homes, the development of infrastructure and building of homes.
The developments would not require government subsidies. As with most disruptive innovations the beginning would provide a "good enough" product and over time the processes and technologies would improve and provide for further market creating innovations. The result would be a sustainable, profitable enterprise that would provide significant economic opportunities. For example, the first desk top computer was nothing more than a word processor with limited capabilities.With each new generation more capabilities were added. As a result of more elegant software and more efficient chips, over time, desk tops replaced mid range computers (DEC) and now handle low end main frame tasks.