Members of Evanston's Housing and Homelessness Commission voiced support Thursday evening for plans to construct new coach houses in town as a way to make housing more affordable -- but how to fund their construction remained a stumbling block.
Dick Co, president of the Evanston Development Cooperative, suggested that an 800-square-foot, two-bedroom coach house might be built for around $200,000 and made affordable for someone who earns 80 percent of area median income to rent if three-quarters of the cost was funded with a 20-year loan at a 1% interest rate.
But with mortgage rates currently running around 4%, it could require a subsidy from the city of around $50,000 over the 20 years to reduce the effective interest rate to the level that would make the unit affordable.
As of June 30, the city had around $1.5 million in its affordable housing fund, which is funded primarily by fee-in-lieu payments from developers of large new housing projects.
Working with a group of Northwestern University engingeering and computer science students, the cooperative has calculated that of the roughly 10,000 single family house lots in the city, 4,700 cold accommodate a coach house or accessory dwelling unit under existing zoning rules.
Co says the group is set up to assure worker control and that workers building the new homes would be Evanston residents, many of whom could be trained on the job.
The homes would use a panelized construction method that Co says provides high insulation and fire safety ratings along with the potential to frame in a new house in a few hours rather than weeks.
Commission Chair Larry Donoghue said the EDC concept looks like "a really exciting strategy for accomplishing a number of goals" including providing more housing and more equity in Evanston.
Sarah Flax, the city's housing and grants administrator, said the city has been having ongoing discussions with Wintrust Bank about whether they could help finance construction of coach houses here.
Co says most accessory dwelling units now are financed either by the homeowner taking out a home equity loan or through refinancing their existing mortgage.
Co says he is currently working with three homeowners in Evanston who are interested in putting coach houses on their properties and hopes to have at least one constructed by the end of the year.
Development co-op seeks city funding (2/27/19)
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