This Design is Making Homeownership 20% More Affordable for Lower-Income Families

The need for innovation

Located in Etzatlán, Mexico, Las Fuentes is a 941-lot community for low-income families. Families participating in the program are making monthly savings payments toward developed land lots. Once a family completes their land payments, they can use their property as collateral to secure a housing loan. The loan allows families to self-build their home or purchase a housing prototype.

When we listened to local families and looked at their housing options in Etzatlán, we noticed a problem: the average family couldn’t afford their available options. The market needed to innovate to meet the growing demand. 

The financial burden behind the housing crisis

In Etzatlán, Mexico:

• 90% of families work in the informal economy
• 45% of families live below the poverty line (making < $5 a day) 
• 70% of the families do not have access to financing to build a home at the current price points offered

The lack of affordable housing supply in Etzatlán results in longer timelines for families to secure housing, unsafe self-builds, and families becoming severely cost-burdened. When we surveyed families to learn more about their needs, preferences, and paying capacities, we realized there was an opportunity to create a housing prototype that families could afford. There was a gap in the market for local developers to make a profit and meet the needs and desires of lower-income families.

A solution supporting the demand

Casa NEXT is our innovative response to the lack of affordable housing supply in Etzatlán. The project’s R&D was funded by our generous brand partner Cotopaxi.

Casa NEXT’S design reduces the sales price of our original prototype by more than 20%. 

Victor Mendoza, our director of impact interventions, led the design of Casa NEXT. He says, “We managed to offer a prototype with the same size and incremental features by having a more compact arrangement of spaces, replacing the roofing system, and removing non-essential finishings. Families appreciate that the new model closes the full width of the lot so the backyard is more private and safe, and also that they now have a front entrance closer to the street front, rather than a lateral one on the back.”

An innovative feature families love: 40% of Casa NEXT’s walls are removable. 

The flexibility in design allows owners to easily build expansions when their families or needs grow. The starter home gives families a blank slate to customize over time.

In the first half of 2024, we built a model home of Casa NEXT for families to tour. If a family is interested in buying the model home, local financial institution Caja Cristobal Colón will offer loans to qualified families for their home construction. From there, Vic says, “Families are given two options: they can hire our local team of construction experts to build their home, or they can get the full package of blueprints and build it through an owner-led process with access to affordable technical advice from a local team of architects.”

We’re excited to see how Casa NEXT helps Etzatlán meet the growing demand for affordable housing. One single mom named Esmeralda recently purchased land in the Las Fuentes community. She’s now considering her home options, with Casa NEXT being one of them. She dreams of having a second floor for her growing family and a space for her to operate her stylist and makeup business. But most of all, she wants a “comforting place where there’s joy and a shared love.”

For us, innovation is a means to making land and homeownership more affordable for lower-income families. If you’re interested in funding the R&D of an innovation in the affordable housing space like our brand partner Cotopaxi, please reach out to danielle@newstoryhomes.org.