How Fahe is Rising to Meet the Housing Crisis in Appalachia: an interview with Jim King, Fahe CEO

Housing | June 20, 2024

Part 1 of a Continuing Series

This post during Homeownership Month kicks off an ongoing series on affordable housing. Next month will feature the perspective of one of our Member organizations.

Q: The national affordable housing crisis is often in the news. From your 35 years in housing development, what do you see as the root causes?

A shortfall in production has been a long-standing problem. We don’t have a national housing strategy or policy. According to a study by Freddie Mac, the U.S. was building almost 500,000 homes that were 1500 square feet or smaller in 1976. In 2020, that number was about 80,000.

Since the housing crisis of 2008 we have lost contractors and skilled employees in the industry that never came back. It was a tipping point. Most recently, and I think this is when the general public caught on, there were disruptions to materials and supply lines during COVID.

Q: How is this crisis particularly affecting central Appalachia?

We already knew that we had a lot of housing that needed to be replaced, and that we weren’t building fast enough in in a way that was affordable. Then in the 2022 floods, we had total devastation of close to 1,000 units and 7,000 houses that were affected. The reality became more poignant with this disaster.

The history of persistent poverty in central Appalachia, particularly in the coal field counties, makes any crisis harder here than it does in the rest of the country. This isn’t new for us, but it feels more heightened.

Q: Why is it so important to address this crisis in central Appalachia?

Generally, folks in the economic and community economic development world think if we provide the jobs, the people will come, and the housing will follow. But if there’s no place to live, then people aren’t bringing their companies, aren’t bringing their jobs. We should be really thinking about how we create Appalachian communities that are attractive to people. We could lead the economic prospects of large parts of Appalachia differently, if we started with a community focus, rather than a job focus. There must be housing choices.

Particularly in eastern Kentucky, which has a pretty high concentration of persistent poverty counties, people don’t always have as much hope as you would like. This can be a bigger barrier to a better life than how much money they have. Getting a real home changes their lives. Because something they thought would never happen actually happens, it changes the way they view the future and makes them engaged in their communities. It’s profoundly hopeful.

Q: How have Fahe Members increased housing production in the past?

In 2005, we were serving about 2,000 families a year and it felt like we needed to increase the work that we were doing. By 2014, we hit 8,000, quadrupling our efforts in under 10 years. We went from a group that was serving one family at a time to thinking about how we could influence the industry in the region a little differently. We had to think about what kind of construction we were doing, what kind of financing we were doing. For example, it forced us to engage with the appraisal industry.

We’re still producing at an increasing level. We don’t count it by families anymore, but it’s about 85,000 people a year that we’re reaching with a housing solution. As Appalachians, our intention has been and will be that we’re not going to wait on somebody else to figure this out.

Q: How are Fahe Members meeting the current intertwined challenges?

To address the shortage of skilled labor, we are engaging with community colleges as well as enacting second chance employment to teach people the construction trade. A couple of Members are exploring modular construction. There’s a product called dream build that has a flexible design. It’s a way to get a smaller structure on the ground and then the family can build it out over time. Skilled tradespeople are more efficiently used when they can work on ten units at once in one location.

We’re exploring right now working with a couple of national organizations that train entrepreneurs on how to become housing developers so we can build this industry up in the region.

Our Members are building units that will be easily adaptable. The housing is solar ready, even if the family can’t afford to put solar on them. And making them accessible, easy for older people to get around. So preparing for renewables and for an aging population, just trying to think out ahead a bit. From a regulatory standpoint, we are engaging with appraisers to give value for things like quality and energy efficiency to maximize housing value.

Q: What’s next for the Fahe network?

We’ve been successful in a pretty tough environment, but our current approaches aren’t sufficient by themselves to get closer to what we really need.

Over the next couple of months, we will be digging into what it will take to double again the production over the next couple of years. It would definitely include what kind of financing needs to show up and how does that need to work? But also, how do we need to adapt what we’re doing? Building up our own work will take a new set of partners, and it will involve us having a broader view.

We’re looking for opportunities for us to engage with the governors in the region, and we’ve had some new commitments of funds in Kentucky and Tennessee. We’re working with the Appalachian Regional Commission some on raising that voice a bit. From an organizing standpoint, it just has to matter to a much larger group of people than just folks who work with it every day.

Q: What can others around the country glean from Fahe’s work?

I’m not expecting that us doing what we’re doing in our little corner of the world is going to matter a great deal to a national audience. I just reread Malcolm Gladwell’s David and Goliath. The premise of the book is that sometimes, the little guy still wins. I said to the Fahe Members in April, I am sick of watching this giant housing crisis. Isn’t anybody going to do anything? We should do something. That’s our attitude. We’re not the biggest players, we’re not in the biggest part of the country. But we’re going to get our stick and our stones and our sling and we’re going to do what we know how to do. And we have every intention of succeeding.