affordable housing thesis issuu

• < Previous

Home > PITZER > PITZER_STUDENT > PITZER_THESES > 35

Pitzer Senior Theses

Designing affordable housing for adaptability: principles, practices, & application.

Micaela R. Danko , Pitzer College Follow

Graduation Year

Spring 2013

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Environmental Analysis

Lance Neckar

Paul Faulstich

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont .

Rights Information

© 2013 Micaela R. Danko

While environmental and economic sustainability have been driving factors in the movement towards a more resilient built environment, social sustainability is a factor that has received significantly less attention over the years. Federal support for low-income housing has fallen drastically, and the deficit of available, adequate, affordable homes continues to grow. In this thesis, I explore one way that architects can design affordable housing that is intrinsically sustainable. In the past, subsidized low-income housing has been built as if to provide a short-term solution—as if poverty and lack of affordable housing is a short-term problem. However, I argue that adaptable architecture is essential for the design of affordable housing that is environmentally, economically, and socially sustainable. Further, architects must balance affordability, durability, and adaptability to design sustainable solutions that are resistant to obsolescence. I conclude by applying principles and processes of adaptability in the design of Apto Ontario, an adaptable affordable housing development in the low-income historic downtown of Ontario, California (Greater Los Angeles). Along a new Bus Rapid Transit corridor, Apto Ontario would create a diverse, resilient, socially sustainable community in an area threatened by the rise of housing costs.

Recommended Citation

Danko, Micaela R., "Designing Affordable Housing for Adaptability: Principles, Practices, & Application" (2013). Pitzer Senior Theses . 35. https://scholarship.claremont.edu/pitzer_theses/35

Since May 03, 2013

Included in

Architectural Technology Commons , Civic and Community Engagement Commons , Environmental Design Commons , Environmental Policy Commons , Inequality and Stratification Commons , Public Economics Commons , Social Welfare Commons , Urban, Community and Regional Planning Commons , Urban Studies Commons , Urban Studies and Planning Commons

Advanced Search

• Notify me via email or RSS
• Colleges, Universities, and Library
• Schools, Programs, and Departments
• Disciplines

Author Corner

• Faculty Submission
• Student Submission
• Policies and Guidelines

Useful Links

• Claremont Colleges Library
• Claremont Colleges Digital Library

Home | About | FAQ | My Account | Accessibility Statement

Privacy Copyright

• < Previous

Home > Colleges, Schools, and Departments > School of Architecture > School of Architecture Dissertations and Theses > Senior Theses > 341

Architecture Senior Theses

A Shifted Perspective on Affordable Micro Housing

Author(s)/Creator(s)

Jonathan Reisman

Document Type

Spring 5-2016

architecture, micro housing, affordable, new typology, sociopolitical, economic

• Disciplines

Architectural History and Criticism | Architectural Technology | Cultural Resource Management and Policy Analysis | Urban, Community and Regional Planning

Description/Abstract

This thesis contends that growing cities around the world are out-pricing the younger demographic from the urban fabric. It recognizes that constantly rising real estate markets are forcing millennials outside of city centers. It understands that socially, the younger demographic provide the energy and atmosphere required to keep the city alive, and ultimately believes that in order fro young professionals to reclaim their position int he hosing market, a new typology of hosing need to be established.

Such housing takes increasing urban density into consideration, and provides an appropriate dwelling supply for expensive cities moving forward. It is a typology that builds upon, the ADAPT NYC initiative started by Mayor Bloomberg and promotes micro unit housing as the progressive solution to expensive rental rates around the world.

However, this thesis also acknowledges the existing sociopolitical and economic issues surrounding micro unit housing today. Current zoning ordinances do no permit this typology and developers need to be grated government-owned land in order to both construct and find profit in each venture.

As a solution, this thesis contends that micro unit housing should become a subdivision within a larger mixed-use development. It argues that through a series of financial models, a flexible combination of commercial, retail, and high-end residential spaces will establish the economic feasibility for developers to provide micro unit hosing at an affordable rate.

Additionally, this proposal addresses the zoning allowances architecturally through the invention of a new apartment archetype: a residential typology that provide a series of shared communal spaces, which provide programs to the inhabitants of an otherwise 350 square foot apartment unit.

Communal spaces, which are comprised of bars, cafes, lounges, offices, and so on, will begin to connect all of the building's occupants, while bridging the political gap existing within a mixed-use development, and merging the building into one holistic community.

Recommended Citation

Reisman, Jonathan, "A Shifted Perspective on Affordable Micro Housing" (2016). Architecture Senior Theses . 341. https://surface.syr.edu/architecture_theses/341

local input

Creative Commons License

Since May 20, 2016

Included in

Architectural History and Criticism Commons , Architectural Technology Commons , Cultural Resource Management and Policy Analysis Commons , Urban, Community and Regional Planning Commons

• Academic Units
• Dissertations and Theses

Advanced Search

• Notify me via email or RSS

Author Resources

• Open Access at Syracuse
• Contribute Material
• Suggest a New Collection

Home | About | FAQ | My Account | Accessibility Statement

Privacy Copyright SU Privacy Policy

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

THESIS SUSTAINABLE AFFORDABLE HOUSING S

2022, Sustainable Affordable Housing - An Indicator Assessment Tool for the City of Copenhagen

The City of Copenhagen has formulated a vision for housing affordability in context of the Sustainable Development Goals (SDG's) presented by the United Nations. However, no indicator assessment tool has been developed for measuring whether progress is being made towards ensuring sustainable affordable housing (SAH). An indicator assessment tool is a recognized method for both scientific inquiry and policy development within measuring progress towards sustainable development. Therefore, the research objective of this thesis is to develop an indicator assessment tool for SAH to the case of the City of Copenhagen. Furthermore, an assessment is made of whether the City of Copenhagen is progressing towards sustainability.

Related Papers

Sustainability

Housing drives urban development and has a significant potential for contributing to sustainability. However, ample sustainability indicator sets fail to include relevant indicators of sustainable housing—assessment seems to be an underdeveloped topic. We chose the United Nations Geneva Charter on Sustainable Housing as a conceptual foundation for the proposed assessment tool. It addresses recent challenges by four defining principles and related rationales, thus forming a theoretical basis of sustainable housing. We applied both theoretical research (desk-top analysis) and qualitative research (an expert panel) to develop a comprehensive framework for sustainable housing and complemented it with relevant indicators. The proposed housing sustainability assessment tool (HSAT) explicitly advocates a holistic approach that seeks to balance the environmental, social, economic and institutional dimensions of sustainability; simultaneously, it includes an integrated concept of the buildin...

Social Indicators Research

Montserrat Pareja-Eastaway , Nessa Winston , Montserrat Pareja Eastaway

Australasian Journal of Construction Economics and Building

Nicholas Chileshe

José Jéferson Rêgo Silva

In developing countries, as Brazil, social housing is financed almost exclusively with public resources. Due to lack of planning of urban space occupation and the restriction of financial resources the emphasis is given to the reduction of quantitative dwelling deficit. Thus, nor always satisfactory benefits are provided with regards to the quality of life, social insertion, generation of income and local economic development. The challenge for developing countries is to establish means to reach economic and social growth with rational use of environmental resources, considering also the diversity of local peculiarities. In developed countries several methods are available for evaluation of buildings sustainability. However, there exist the needs for a more realistic approach directed to the developing countries, which consider, beyond the rational use of natural resources, its demands for social and economic development. The objective of this article is to initiate the discussion o...

SUSTAINABILITY

Héctor Saldaña Márquez

This study presents a comparative analysis of the housing indicators used by the single-family housing rating systems (SHRSs), in which the residential urban environment (RUE) influences buildings' certification scores, emphasizing the relationships of six systems developed by middle-income countries (MICs)-BEST, CASA, GBI, BERDE, Green Homes, and LOTUS-and the two most-recognized rating systems, BREEAM and LEED. The aim is to provide new housing indicators that are capable of bringing the concept of sustainability into the cities of MICs. The results reveal that the percentage of influence that single-family housing (SFH) can achieve in the metric established by each system is relatively low. However, considering all of the identified indicators, this influence could increase to 53.16% of the total score in multi-criteria evaluations. Furthermore, a significant lack of indicators for mandatory criteria evaluations was found, with CASA being the only system that considers their inclusion. This paper identifies 37 indicators for multi-criteria assessments and two for mandatory-criteria assessments, providing new perspectives on several topics. Furthermore, the methodology established to obtain the indicators could be useful for other researchers in the identification of new sustainable indicators.

Sustainable development is inconceivable without healthy real estate market. A housing project can be regarded as sustainable only when all the dimensions of sustainability (environmental, economic, and social) are dealt with. There has been an increased interest in using sustainability indicators for evaluating the impacts of the new development projects. Past and recent experiences have shown that sustainability indicators can be useful tools for measuring the outcomes of new construction, when used appropriately and adequately. The aim of this article is to propose an integrated, hierarchically structured system of sustainability indicators to be used for assessment of the new housing development projects in the Baltic States. This aim is achieved through accomplishing three objectives. First, based on a review of literature related to assessing building project performance and sustainable development in construction, the paper proposes a hierarchically structured system of susta...

Jamilah Mohamad

A conceptual framework that incorporates all relevant indicators of sustainable housing development (SHD) had been developed through literature reviews of related previous studies. The focus of the review is to gather indicators of sustainability used by previous researchers in studying sustainability, particularly in the housing development. It was found that many previous studies focused only on one or two specific dimensions of sustainability. This can affect the overall assessment of housing sustainability and actual sustainable outcomes. The reviewed indicators and conceptual framework can be employed in assessing housing development comprehensively.

Burak Bican

Denmark regards affordable housing of quality as a critical duty of the its welfare state for all of its citizens. The Danish interpretation of social housing is called Almen bolig, and it can more appropriately be defined as " non-profit rental housing " in the Danish context. The social housing stock in the country is of critical importance as it consists relatively deprived settlements and vulnerable communities. Gyldenrisparken in Copenhagen is one of those settlements built in 1970s. Nevertheless, in time, it had become one of so-called 'ghetto's. Fortunately, a regeneration process was undertaken in the last decade through comprehensive master planning and collaboration of various stakeholders. This study describes a methodology developed to comprehend the physical implementation steps taken during the project towards a sustainable and liveable settlement. It utilizes a matrix as a tool to categorize these actions. The matrix provides the possibility to evaluate the actions according to " sustainability " goals, " scale " , and some pre-defined " spatial concepts ".

Ecosytems and Sustainable Development VI

Marcos Frandoloso

msd.unimelb.edu.au

George Zillante

Loading Preview

Sorry, preview is currently unavailable. You can download the paper by clicking the button above.

RELATED PAPERS

Michael Soegaard Joergensen

Habitat Intrnational

Charles Choguill

Journal of Tourism, Hospitality and Environment Management

Zakri M. Tarmidi

Ecological Indicators

Josianne Støttrup

Journal of Housing and the Built Environment

Montserrat Pareja-Eastaway

masoud omidi

Ashraf M. Salama

Maria-Cristina Arghir

Nessa Winston

ierdafrica.org

Dr. Eziyi Ibem

Khulna University Studies

fawzia farzana

Yolanda Esteban

International Journal of Sustainable Construction Engineering and Technology

Mohd Yamani Yahya

Housing and Society

David Turcotte

RELATED TOPICS

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Legacy Housing: An Affordable High-Quality Manufactured Home Builder

• Legacy Housing is a low-price manufactured home builder in an industry that itself is an affordable alternative to site-built housing.
• LEGH, with its vertically integrated operations, operates with higher margins and trades at a lower multiple compared to its peers.
• The company has a healthy portfolio of loans that protects the downside.

Investment Thesis

The Legacy Housing Corporation ( NASDAQ: LEGH ) is one of the biggest manufactured home builders in the country. Compared to its peers, Legacy Housing has higher margins yet lower multiples. My analysis (which is shared in this article) shows that the company is trading near its book value, which mostly consists of healthy loans. My conservative valuation arrives at a +80% upside. So I think we're having an asymmetry bet here that the downside is protected while there is a long runway for the upside. That's why I suggest a "Buy" rating on this Stock.

Company Overview

Manufactured homes are a more affordable alternative to site-built housing. The industry was at its peak in the mid-90s and in decline since 2000 as the interest rates were in decline and stationary-built housing was more affordable which led to less desire for mobile homes. The following figure shows this decline in mobile home shipments as a percentage of total housing units.

Manufacture Home Shipments vs Total Completed Housing (2023 10K - Source: U.S. Census Bureau)

The price gap between these two types of housing, as shown in the following figure, has been growing in recent years with interest rates being at their lowest levels.

Average Sales Price (2023 10K - Source: U.S. Census Bureau, the Institute for Building Technology and Safety, and the Manufactured Housing Institute.)

Legacy Housing is the fourth to sixth (depending on reporting year) largest Manufactured House (Mobile Home) building company. It was founded by Curtis Hodgson and Kenneth Shipley in 2005 and IPO'd at the end of 2018. Mr Hodgson & Shipley are veterans in the industry and have many years of experience in Mobile Homes even before founding the Legacy Housing Corporation. In the summer of 2022, Duncan Bates became the CEO , replacing Ken Shipley. Before Legacy Housing, Mr. Bates was Senior Vice President, Mergers & Acquisitions at Arcosa Inc. where he executed multiple acquisitions and divestitures during his 3.5-tenure.

Legacy Housing sells its products through 150 independent and 13 company-owned retail locations in 15 states. They sell their products either to the end users or to the Mobile Home Parks (MHP) which then they rent their homes. Their target customers are households with an annual income of less than $75,000.

Besides proceeds from selling homes, they earn money from financing the sales. They finance 3 types of loans: consumers, MHP community, and dealer financing. Having the revenue circulate through the loans, reduces the cash conversion ratio in the near term (profits will be realized as cash in the future). But also it works like a delayed gratification where more cash will be generated in the future (higher loan rates than fed interest rates).

Legacy Housing is a low-cost mobile home builder in an industry that itself is an affordable alternative to housing solutions. Skyline Champion Corporation ( SKY ), Berkshire's Clayton Homes, and Cavco Industries, Inc. ( CVCO ) account for 80% of the market share. Legacy Housing is also one of the most vertically integrated companies in the industry. They handle almost everything end to end, from making their own cabinets and windows to financing and even transportation of homes with their own truck fleet. This has helped them save on the costs. Legacy Housing has found a niche regional market where it enjoys its highest margin compared to its public peers. The following figures show the gross and net profit margins of three publicly traded companies in the industry.

Gross Profit Margin (Seeking Alpha)

Net Income Margin (Seeking Alpha)

Legacy Housing has three production facilities, two in Texas and one in Georgia. The Fort Worth, TX facility is 97,000 sq ft and has around 1,100 units of production capacity. The Commerce, TX facility is 130,000 sq ft and has around 700 units/yr capacity. The Eatonton, GA is a large plant at 388,000 sq ft which can produce 1,100 units/yr and its capacity can be doubled with some capital expenditure. In total, the company has the capacity to produce around 3000 units per year.

The sold units in 2021, 2022, and 2023 were 3011, 3339, and 2434 correspondingly. Through 2023 and Q1 2024, both the sold units and average price per sold unit have declined (see the following chart). I attribute this decline to rising interest rates in 2023. I think the expectation of having lower interest rates, has stopped the potential customers from purchasing houses. I believe we're currently near the trough. Two potential scenarios will continue to happen from here. Either we'll have higher interest rates longer, which in that case, it will push higher income households who were considering buying the stationary built housing, to consider the more affordable Manufactured Home option. Or the interest rate will start to get lower, which in that case it'll be a sign for the potential customers who were waiting, to purchase their home.

Q1 2024 Sold Units (Q1 2024 10Q)

Loan Portfolio

As mentioned earlier, the company provides 3 types of financing. The following chart shows the outstanding amounts ($ in thousands) and their rates at the end of Q1 2024.

The consumer loans have the highest rate and are well above the interest rate. In recent years, the delinquency rate has been around 1-2% for these loans, which is well below 6% in 2012 and the national average. These loans are good quality partly because for a loan, the sold home is collateral and can be repossessed and resold in the case of default. Another important factor is that the company always requires a down payment for financing.

The MHP loans are around 8% and are considered to be very safe ones. The delinquency rate here historically has been less than 1% but in the last quarter, one of the borrowers who had borrowed 54M loan, has 36M at default. The company is in the litigation procedure and management is optimistic about the situation being under control. In the Q1 conference call , Bates said:

I think it's a unique situation. And obviously the size is unique, but nothing's changed in that portfolio. We've had situations over the last few years that we've worked through and we've been able to recover all of our principal outstanding and in most cases the accrued interest as well. And so I don't see this as any different than those other situations except for it's a larger chunk.

They also have an inventory financing program for independent dealers and retailers. The interest on these types of loans is around 1% monthly. There is "Other Financing" in the chart, which are the loans to the MHP or individuals that are not directly tied to the sale of homes.

I believe the company is trading near its liquidation value. That's why I consider book value as a source of valuation alongside the operations. The book value consists of the loan portfolio, land ownership, and inventory.

In the loan portfolio, as mentioned in the previous section, there are around $411M outstanding loans which, with 24.3M outstanding shares, yield to around $16.9/share outstanding loans. I use a multiplier of 1 for them.

The company also has acquired lands over the years and has made some improvements to them. All the acquired lands are in the Texas area, and the management has indicated that they have appreciated more than double. Conservatively, I consider the 1.5 multiplier on the land plus the improvements that have been done which totally will be 11*1.5 (LAND) +12 (improvements) = $29.25M which, with 24.3M outstanding shares, yields to 29.25/24.3 = $1.2/share worth of lands.

The company also has $42M of inventory. $12M of which is the raw material and $30M is the finished goods. For the finished goods, I consider 0.8 multiplier. With 24.3M outstanding shares, we'll have (12+0.8*30)/24.3 = $1.5/share worth of inventory.

With loans, land, and inventory, we have around $19.5 per share book value which at the current price, is traded at 1.2 times book value.

The gross profit per unit sold has varied between $18,500 to $20,000 depending on the year. I consider $19k gross profit per unit sold as a realistic estimation. Earlier I mentioned that the company has a production capacity of around 2900 units/yr. I assume conservatively the company runs on 80% of capacity and sells around 2300 units/yr. The management has indicated that we'll have consistently over 40M in interest income from 2024 going forward, which makes sense and is around 10% of outstanding loans. We have $25M of SGA cost per year. Putting it all together gives us:

2.300*19 (home sale) + 40 (interest revenue) - 25 (SGA) = $59M EBIT

With a multiplier of 10 for EBIT, we reach $24 per share worth of operations.

Putting the operation and book value, we reach 16.9(loan) + 1.2(land) + 1.5(inventory)+24(operation) = $43.6/share valuation, which has more than 80% of upside.

The downside is protected by the book value. There was a $10M share repurchase program that was announced in Nov 2022 but never used until a recent quarter when the share prices traded near the book value. The management spent $5.4M of the program to buy shares under $21 and in the Q1 conference call said that they'll aggressively continue to do so if the price gets near the liquidation value. The management in Q1 call said:

Legacy's business fundamentals have not changed. The market is slower but improving over 2023. There was confusion with our fourth quarter numbers and the stock traded down to liquidation value. We will continue to repurchase shares aggressively when this happens. "

I believe this is a good sign from management and the right capital allocation strategy.

Also, comparing the EV/EBIT of Legacy Housing with its public peers, suggests that it is traded at a cheaper valuation compared to them. (see the following figure)

EV/EBIT comparison (Seeking Alpha)

So, here we have a company that has better margins than its peers while trading cheaper than them. In summary, my valuation shows that this stock has less than 20% downside and 80% upside. I think the odds here justify opening a long-term position in this company. I recommend a "Buy" rating for Legacy Housing for a long-term position.

Ownership and Compensation

Before 2018 and the company's IPO, 100% of the company was owned by Mr. Hodgson and Shipley brothers. As of the end of 2023, their ownership is around 32%. They get a modest salary and all their exposure comes through the ownership of the company.

Similarly, Mr. Bates, who started as CEO in 2022, gets a modest base salary of $300k annually. He got two sets of long-term options. i) option to get 300,000 shares at an exercise price of $36 per share and ii) option to get 600,000 shares at an exercise price of $48 vesting in ten years. I believe the structure of compensation, and the fact that the majority of compensation comes from long-term out-of-the-money options, is aligned with long-term shareholder values.

I think the main source of the risk lies in the loans. A big portion of the company's equity lies in the loan portfolio. A higher default rate can destroy the value of the company. Especially, recent defaults in MHP loans can be a sign of a greater problem.

Another source of risk would be operational ones. We should keep in mind that the company has only three production facilities. A disruption in one of the facilities (like the issue in Q3 2022 in Georgia facility), can have a significant impact on the production capacity of the company.

Since 2018 and after the IPO, the company has gone through some challenging times as a public company. In summer 2022, the 10K report was delayed until August of that year, and the CFO at the time resigned. They received multiple non-compliance notices from Nasdaq, and the stock price hammered from $28 at the end of 2021 to $12 in summer 2022. But when the annual reports came out, there wasn't any material damage and everything was fine. Similar issues can negatively impact the stock price.

The Legacy Housing Corporation is a low-cost mobile home producer in an industry that itself is a low-cost alternative solution for housing. The company, with its vertically integrated operations, operates with higher margins and trades at a cheaper valuation compared to its peers. My valuation shows that the company has more than 80% upside while the downside is protected with its assets consisting of a loan portfolio, the land, and the inventory. I think Legacy Housing's operation quality, and its cheap valuation, justify opening a long-term position in this manufactured home builder company.

This article was written by

Analyst’s Disclosure: I/we have a beneficial long position in the shares of LEGH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About legh stock.

More on LEGH

Related stocks.

Trending Analysis

Trending news.