Self-help housing. `Sweat equity' programs let would-be homeowners invest labor in lieu of dollars. (EAST COAST)
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The first step in this ``sweat equity'' project is for the contractor to pour the foundation and insulated slab floor, and make and oversee the erection of the frame. In this case, all three couples, along with a few friends, raised the post-and-beam frame of each house in turn. This way, says Muscow, ``we were able to eliminate the cost of hiring a crane'' - a necessity if only one couple's labor was available. Muscow then checked that the frames were tightly pegged and square and bowed out of the project, but for a personal interest that brings him back from time to time.Skip to next paragraph
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A qualified construction supervisor visits the building sites once or twice a week, however, to oversee the work. In effect, he is a teacher who instructs the owner-builders on each step in the building process. In stress-skin panel construction, the entire building is closed in; then the requisite openings are cut out and doors and windows set in place.
Electrical wiring and plumbing will be done by outside contractors. Otherwise, the entire envelope (walls and roof) and second story floor - a significant portion of the home - is being done by the owners.
Upon completion, the homes will have cost $52,000, including land. Of this figure, $10,000 is the assessed value of the homeowners' labor, their down payment in other words, leaving them to assume a mortgage of $42,000. This satisfies Parker. ``Most folks,'' he says, speaking of average wage earners in the region, ``can pay off a mortgage. It's the down payment that prevents us from getting into home owning.''
The $10,000 ``sweat equity'' evaluation might appear conservative, considering the amount of work the owners have put into the project, But, as Shoul points out, they get ``additional equity from the work of their sponsoring organization, from the grant paid for their construction supervisor and from the time and energy others gave to support their program.''
A unique feature of this particular building project is a formula for shared equity in which Millers River Self-Help Network retains a share of any capital gains from a rising real estate market. This is to prevent subsidized housing from becoming ``unsubsidized'' the moment the owner decides to sell and move away.
To qualify for the program, the three couples had to have a combined income of between $18,000 and $25,000, to be sure that ``they could afford to make the mortgage payments,'' says Shoul. Prospective homeowners are also interviewed to assess their ability to withstand the stress of six months of long, after-hours work. Past experience suggests that the stress of the project either unites couples more closely or blows them apart. ``We wanted to make sure they could stand the pace and not end up in the divorce court,'' Shoul says. Both spouses are expected to work at the site.
With the first three homes nearing completion, Shoul is working on a follow-up - a cluster of about a dozen homes in the form of a small village. Affordable housing is ``something society has to get a handle on,'' he says.