A Minnesota nonprofit designed net-zero housing that is also affordable. Here’s how
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Katurah Carr had been looking for more affordable housing for herself and her teenage sons when she discovered the new Ridgeview Heights development in downtown Faribault. The 36-year-old loved the look and feel of the three-bedroom unit she saw on Zillow with the marble kitchen island, large windows and shiny new appliances. But the main attraction was the price of the townhouse — only $1,800 a month with utilities included.
Carr said she hadn’t seen anything like it close to that price point in Faribault, a town of about 25,000 residents about an hour south of the Twin Cities. She jumped at the chance to rent it. She was the one of the first to apply and the first tenant to move in when the development opened last month.
She loves living in Ridgeview Heights so much that she jokes she’ll happily keep living there, even after her teenage sons move out one day.
“It’s affordable and they’re so nice,” Carr said. “Like, these places are so cute. I might stay. ‘Get out, kids.’ You know, they’re getting older. ‘See ya. Office. Workout room. Bye. See you later.’”
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The eight-unit Ridgeview Heights project is the second affordable housing development built by Community Action Center, a nonprofit social service agency and food shelf in Faribault and Northfield. CAC’s developments provide affordable townhouses to area families, with a few units set aside to provide emergency housing for those experiencing homelessness. And the homes are all net zero, and they will eventually be powered entirely by renewable energy.
CAC says its first development, Hillcrest Village in Northfield, which began renting to tenants in 2022, was a first-in-the-nation net-zero-energy emergency shelter and supportive housing development where 100 percent of the electricity is generated by on-site solar panels.
At the time, net-zero housing was believed to be too expensive to incorporate into affordable housing. But CAC has shown with its projects that net-zero housing can not only be altruistic — it can be affordable, too.
The nonprofit hopes that its model will incentivize more private developers to invest in affordable, net-zero projects, moving Minnesota towards a greener future.
‘Pie in the sky’
Scott Wopata, the former director of CAC, said that the center had long wanted to help address the overwhelming need for affordable housing for years, and that need began to feel more urgent during the COVID-19 pandemic.
“If your goal, especially as a social service agency, is to help house people who are literally living in their car or living on the street. There's a real moral push towards more housing, cheaper housing and to stretch your dollars to get as many beds as you can,” said Wopata, who recently started a new job as community development director with the city of Northfield.
That’s when CAC came up with the idea for the Hillcrest Village project, a collection of 17 apartments and townhouses on a small cul-de-sac in Northfield, the town next door to Faribault. Rents for 16 of the units are kept affordable for lower-income families, while one is reserved for emergency housing for those experiencing homelessness.
To stay in line with the organization’s mission, Wopata wanted the housing to be high quality and powered by renewable energy.
But there wasn’t much precedent for doing this, and Wopata said there was a belief amongst builders and developers that constructing net-zero housing would cost them 30 to 40 percent more than a traditional build. Wopata wanted to debunk that myth, but it was hard to get builders on his side.
“It sounds like pie in the sky,” Wopata said.
Steve Schmidt, co-owner of Schmidt Homes, which developed both CAC sites, acknowledged that he was slow to come around to the idea.
“I was looking at it as, ‘OK, we’re going to build affordable housing. That means we build typical affordable housing that we’re all used to, which is vinyl siding and cheap windows and minimal insulation, just barely meeting code,’” Schmidt recalled. “And Scott said, ‘No, we’re not doing that. We are going to set a standard of what can be done when you use proper techniques and methods, and we’re going to build these [units] net-zero energy.’
“[I told him] it wasn’t going to work,” Schmidt said. “If it would work, other people would be doing it. And he said, ‘I don’t care. We’re going to make it work.’”
Schmidt said he and his team began to look into different models and concepts and partnered with the University of Minnesota’s Center for Sustainable Building and Research to strategize.
A breakthrough came when they settled on a double-wall system with massive insulation in between. The design ensured the homes were essentially vacuum-sealed with the exception of ventilation. The small amount of electricity needed to heat or cool the house could come from solar panels installed within the development.
Those and other elements of the design that Schmidt developed in partnership with CAC and UMN brought the price way down. Wopata estimates they only spent 7 percent more on construction to make it net zero, and they saved an additional 4 to 5 percent due to rebates from Xcel Energy.
Schmidt was so impressed with their findings that he brought other local builders on board.
“This is too good of information for us to keep,” Schmidt said. “We need to share this with other people so other people know how to build this.”
In developing the Faribault units this year, the designers and builders were able to innovate even further.
Schmidt said he hopes the model they’ve created can help other developers who might be wary feel comfortable wading into net-zero housing.
“I think sometimes, the market isn't ready to jump into doing some of these things, and if there's an entity out there that can show the standard builders how to do it, it can happen,” Schmidt said.
A changing tide
The new Faribault development could generate even more of a buzz as interest in net-zero projects soars across the country.
Dan Handeen, a research fellow at University of Minnesota’s sustainable building center, said he’s seeing more and more developers moving into the net-zero space. While the upfront costs can be more, the low cost of utilities could eventually make up for that higher construction cost — and then some. He adds that well-insulated, net-zero homes also tend to be more comfortable to live in; they’re quieter, with well-regulated temperatures and better air quality.
“It’s a win-win as long as you can get the thing built in the first place,” Handeen said.
Wopata hopes Ridgeview Heights in Faribault, and an upcoming net-zero project to be built by a private developer in Northfield next year, could give net-zero affordable housing development a boost well beyond southeast Minnesota.
