Higher Purpose Homes is taking steps toward building its modular factory in Montezuma County and potentially achieving its goal of building 250 homes per year.
The Durango-based startup company has been looking for affordable housing solutions in Southwest Colorado since its inception last year.
Through a combination of applications for Proposition 123 funding and Innovative Housing Incentive Program funding, the company hopes to use that money to build a 49,000-square-foot factory, which would mass produce modular homes.
Higher Purpose has also raised about $3 million in private investment, which co-founder Nick Lemmer said is around two-thirds of what the company is trying to raise.
If Higher Purpose receives the necessary funding from Prop. 123 and IHIP, it will start construction on the factory in 2024 with the intention of being functional by early 2025.
The factory will be located in west Mancos, and Lemmer said it will create about 160 new jobs for the area. He added that employment will also include benefits and the potential to own partial stake in the company.
The houses Higher Purpose plans to build will be 99% finished by the time they leave the facility to expedite the process of placing them on a plot of land. The company’s plan is to build 250 homes a year, with an emphasis on building one finished home a day.
The company’s desired facility would cost about $6.5 million, including employee wages.
“The main reason for us is building the community,” Lemmer said. “We’re not interested in just making money off this.”
Last year, the company was one of the Southwest Colorado Accelerator Program’s cohorts for trying to provide a solution to Southwest Colorado’s housing dilemma.
Higher Purpose Homes looks to build units that will cost about $300,000, but those prices do not include the cost of land. However, Lemmer said while the company can’t control expenses outside of their own, he believes being able to create inventory at an expedited rate will in turn create pressure to decrease housing costs.
He said it’s going to cost the company $125 per square foot to build one modular. According to the Durango Area Association of Realtors’ latest quarterly report, the median cost of a La Plata County Home is $657,000 during the third quarter of 2023.
A key element for the company is to build homes in a sustainable fashion. Lemmer said on-site construction wastes 15% of the used materials, whereas factory building wastes only 3%.
One of the reasons that Lemmer and co-founder Ethan Deffenbaugh started the company was that they saw the impact housing had on professions such as teaching and health care, both of which their wives have worked in.
Teacher shortages have been reported across the state, which has pushed school districts like Durango School District 9-R and Ignacio School District to increase teacher pay in order to keep staff.
“My wife’s a teacher at DHS. She’s seen it firsthand. Ethan’s wife is a nurse and she’s seen it firsthand. He’s been here for 20-plus years and seen friends come and go,” Lemmer said. “Me and my wife, we’ve been here seven years now, and we’ve started seeing it already with friends that we’ve had.”
Other projects the company has been involved with include building roof panels for Pueblo Community College and Habitat for Humanity. Higher Purpose is also working on its first tiny home expansion project.
“The students at PCC are building the floors and the walls and we’re building the roof panels,” Lemmer said. “And we’re going to work with them on site to help them set their floors and their walls.”
He said an additional room for a tiny home will be built as part of the expansion project.
“Maybe you’ve got a young couple that can’t afford a three-bedroom (home) or maybe even a two-bedroom, and they can start off with a one bedroom. And then they decide to have to have kids and can’t move somewhere and think maybe we can add on,” Lemmer said of tiny home additions.