Housing Trust defends 250 State Road costs as reasonable
Eight affordable houses at 250 State Road in West Tisbury will be built for $205 per square foot, well below standard Island building costs, the executive director of the Island Housing Trust (IHT) told West Tisbury selectmen at a meeting on May 20.
Phillipe Jordi, IHT executive director, also told the board that the selection of South Mountain Company to build the project has always been open and transparent to the town. Both topics have been subject to ongoing criticism in town, most recently and publicly at the annual town meeting in April.
While the town approved an additional $170,000 for the project, discussion at the annual meeting included charges that construction costs were $400 per square foot, included upgrades that taxpayers could not afford for their own houses, and that South Mountain Company had a conflict of interest because its president serves on the IHT board.
As a result, selectmen invited Mr. Jordi to discuss critical comments charging that IHT wants more money for a project that is already high-priced. Mr. Jordi explained that the $170,000 approved at town meeting was unrelated to construction but would be used to lower the prices of two houses to increase affordability. Because of the additional funds, West Tisbury residents will now have preference to purchase six of the eight houses, he said.
Mr. Jordi told selectmen he was grateful for the opportunity to discuss the issues. "There has been a lack of information and some misinformation [about the subject]," he said.
According to the final budget on file at West Tisbury town offices, which was reviewed by The Times this week, actual construction costs will be $1.8 million for about 9,000 square feet of housing, or $205 per square foot. The budget also details $409,000 in infrastructure costs, $212,000 in design costs, and $350,000 in energy efficiency initiatives, paid for by the Cape Light Compact.
An independent contractor hired to estimate the project for comparative purposes came in higher than South Mountain, Mr. Jordi told selectmen.
South Mountain Company will build seven of the houses. Habitat for Humanity will build the eighth. The houses will range in size from 1,400 square feet for three-bedroom models to 1,200 square feet for two-bedroom models
Mr. Jordi told selectman that the successful contractor/bidder, South Mountain Company of West Tisbury, was one of only two qualified companies to bid, and that South Mountain had met the IHT's request for qualification standards used in the past to judge bidders.
Mr. Jordi said IHT is not required to follow procurement laws governing state projects, but he said that in the future, as a result of the public comment on 250 State Road, IHT will institute a request for proposal (RFP) process for projects costing more than $50,000.
By laws governing affordable housing construction, builder profit may not exceed 10 percent. The 250 State Road budget provides for $226,000 in "builder overhead," which translates to 9.5 percent profit, if costs come in as budgeted.
This week, in an interview with The Times, John Abrams, president of South Mountain Company, dissected the costs and defended the bidding process for construction of eight single-family houses. He said the process meets state conflict of interest requirements.
"First of all, if you never do anything, you get no criticism," Mr. Abrams said. "If you do, people will take potshots. It comes with the territory, but this [affordable housing] work is important for the Island."
"The IHT board is diverse. It's full of skeptics and legal beagles. It gets all kinds of scrutiny. When we took this project two years ago, we were swamped with high-end work. We see John Early as the other Island company with capacity to do these projects. But at that time, John was committed to the Bradley Square affordable project. There was no one else. They all had high-end work.
"We want to see other companies get involved. There's not much profit in this work. We cover overhead when they go well."
Mr. Abrams added that the energy-efficient measures are designed to produce long-term energy savings. "If energy prices rise only five percent a year, in 20 years, owners of two-bedroom homes will save $53,000, and three-bedroom homeowners will save roughly $60,000," he said. "Unlike most affordable housing, this makes them truly affordable forever."
Mr. Early, who attended the selectmen's meeting with Mr. Jordi, said, "I am perfectly comfortable with the per square foot cost process, although you can see from the discussion that [determining] it can be an elusive thing." Mr. Early also serves on the IHT board.
Expressing support for the housing, which will use solar heating and insulation techniques to provide "energy-free" housing, selectman Jeffrey S. (Skipper) Manter said at the meeting that the town is investing $570,000 in Community Preservation Act funds in the project. "Many residents cannot afford to make these improvements in their own homes," he said.
Mr. Manter noted that many of the energy efficiency measures, such as double-paned windows and solar power systems, are state-funded and do not affect town taxpayer bills.
Virginia C. Jones said at the meeting that she is researching solar heating and found costs well below the state-funded $20,000 price tag for a 250 State Road unit.
"This is a completely different system," Mr. Jordi said. "I know what you're talking about. I've looked into it for my own house. I can't afford it either." He added that the houses are meant to be affordable in perpetuity, and the investment in energy will produce long-term benefits to affordable homeowners.
Ms. Jones and Mr. Manter also questioned design costs, noting that IHT used the home designs for the Jenny Way affordable housing complex in Edgartown. Mr. Jordi replied that the Jenny Way designs were indeed used but recast to include the energy saving measures required for state funding.
At the end of the discussion, Michael Colaneri, a member of the board of assessors, took issue with critics of the project. "If you're interested, get involved on day one, not at the 11th hour," he said. "Do the research first, then ask the questions."
