North Minneapolis Passive Powerhouses: An interview with Urban Homeworks’ Azad Lassiter

Lassiter: Right now, we have five passive homes under construction and two more in the predevelopment phases, which we're calling Passive House Phase 2. For the five homes currently being built, we expect two to be ready for sale by July, with the other three following shortly after. These homes will score a 28 on the Home Energy Rating System index without solar panels and will be net positive, scoring -8, with solar. We're planning to install solar panels on four of the five homes, which should save homeowners around $300-$400 each month.

These five homes will be sold affordably to income-restricted buyers with incomes in the 50-80% Annual Medium Income (AMI) range. Four of these homes will be sold in partnership with the City of Lakes Community Land Trust and will remain affordable in perpetuity. Sale prices range from $195,000 to $285,000.

For Passive House Phase 2, we're making some plan changes based on lessons learned from Phase 1. We hope to start construction on these homes this fall. The new designs include full basements, larger square footage, tweaked floor plans, and overall dimensions that are thinner and longer. Additionally, we'll be using the new prescriptive pathway from Passive House Institute US, Inc. which will help make the homes more affordable by reducing architecture costs and insulation requirements.

Lassiter: We faced a few challenges in this project. The first challenge was getting the trades people trained up. This isn't just about learning new installation techniques for new products. The real hurdle was the mindset change. Building a passive house requires 100% of your attention, 100% of the time. In typical building projects, there are phases where you can coast. You can’t do that with a passive house, especially not on your first try with subcontractors who haven't done it either.

The second challenge was the paperwork, specifically submittals. Residential builders aren't usually big on paperwork, even the legally required kind. Adding product submittals on top of that was tough.

The third challenge was dealing with substitutions. Passive house construction has tight requirements for energy usage, so if a product is specified, it needs to be installed as planned. However, substitutions are common in residential construction. Any substitution must be approved by the Certified Passive House Consultant, and the WUFI model (a tool for analyzing heat and moisture transiency) must be updated, which is time-intensive for everyone involved. Moving to the prescriptive path should help alleviate some of these burdens.

Finally, the fourth challenge was plan review and dealing with building officials. While our onsite inspections went smoothly, getting the building plans approved was a nightmare. Even with stamped engineered drawings, we faced significant resistance. We had to educate the code officials about the International Residential Code and the specifics of our plans. In the end, they didn’t want the burden of ensuring the building was constructed to the plans and imposed a Special Inspection and Testing requirement on us. This isn’t typically done at the residential level, so we had to shoulder the cost of having the Engineer of Record certify everything.

Lassiter: Liability, warranties, and personal responsibility are big considerations for builders. In Minnesota, the statutory warranty places a lot of liability on builders. Reducing risk exposure is essential. I spoke with a former employer who mentioned how much their firm paid last year for warranties — it was staggering. For builders, the bottom line is crucial, and building science supports this. Higher air tightness reduces air infiltration, and air infiltration brings water, leading to many warranty issues. Building science also shows that exterior insulation significantly reduces condensation on the warm side of the wall (and windows). Condensation in your building assembly is a major problem. Applying principles from passive house design or even Department of Energy, Zero Energy Ready Home Program can limit callbacks, positively affecting your profit.

Regarding personal responsibility, how can you not aim to build the safest, most durable homes possible? PHIUS certification requires achieving the Indoor airPLUS standard. I won't go into detail, but do your research, and you'll see the manufacturing industry doesn't always favor us in terms of toxic materials in homes. Just because a product is sold doesn't mean it's safe.

These are all value adds for a contractor. In a competitive market, sound building science principles can set you ahead of the pack.

Lassiter: It has been busy, that's for sure. We're really ramping up for 2025. While we continue our passive house projects, we’re also developing some exciting new opportunities with a one-time, $5 million direct appropriation from last year’s legislative session. We have been charged to use these resources to develop deeply affordable homeownership opportunities in communities with high rates of Black, Indigenous, and people of color residents, and low-average incomes. Urban Homeworks is a small but vital part of the $1 billion housing omnibus bill, and we're currently in the predevelopment phase for this initiative. With this funding, we aim to create 15 homeownership opportunities for those at 60% AMI or lower. Typically, the bar for affordable housing ownership is set at 80% AMI, sometimes even higher at 115% AMI. However, deeper affordability is crucial to addressing the racial disparity between Black and white homeowners in Minnesota.

It costs Urban Homeworks $240,000 in private funds to sustain our Real Estate Development program each year — join the fight for accessible, healthy homeownership opportunities!