"Paper" Houses May Be Trend of the Future

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Landscaper Carl Cordell is interested in Papercrete for tourist cabins he expects to build adjacent to the San Juan River. Homeowner Phyllis Ford came to see whether the material would work for a two-car garage.

"It's the economy and ecology that I like," Ford said. "What I want to know is whether or not you can get a building permit for it."

San Juan County building inspector Anthony Rahn said it takes an "experimental" permit because no code standards have been established yet for the material.

Rahn said he's intrigued and enthusiastic about the resurrected technology. "I believe we're going to have to go to alternative construction materials someday, if the world stays glued together long enough," he said.

As of early spring, he had issued permits only on storage buildings but said plans for a house could be approved. "If it was a house, you'd have to have an architect's stamp on the plans, and it would be an experimental permit, but if somebody came in with the right plans, I'd say it's doable."

Rahn said the experimental designation would have to remain "until the whole idea has been tested for nation codes."

Appraisal a Problem

Property appraisal and financing present special issues. Appraiser Paul James, in the business for more than 20 years, said the problem from an appraiser's standpoint is that "with unique design-construction methods, there's nothing to compare to locally." An appraisal usually is based on comparison with three recently sold similar properties.

"Without a valid comparison of similar sales, it's difficult to establish a value, and that can make financing difficult," James said.

In that event, construction costs become a large part of the appraisal, James said. The biggest factor for setting a dollar value and securing a loan, however, boils down to marketability.

"You take the cost to construct, and then make a subjective decision on how the market will accept the house," he said. "If the appearance is the same as other houses in the area, say it's adobe with a stucco exterior, marketability is easy. Depending on how it's built, there may be no way to tell just by looking that it's not conventional construction."

Linda Barlow, vice president and head of residential lending for Citizens Bank, agreed. Barlow said criteria for such a housing loan generally would be based on the secondary-mortgage market. Secondary lenders are institutions that purchase mortgages from the initial lender.

Moreover, each situation is addressed individually. "Papercrete, straw bale, earth homes, geodesic domes, A-frames—those are not unique to our areas, but not necessarily somewhere else. So each situation gets looked at separately," Barlow said.

For the most part, Barlow said anything different is still worth looking into. "Banks don't disapprove of alternatives," she said. "The question is always going to be marketability. If the structure is hard to sell, it's a matter of higher risk for the lender. It's not an issue of borrower quality or that we think the structure is unsound. It's the market."

As for insurability, James said most unconventional housing has engineering data, which is what insurers look at in making a determination.

Independent insurance agents say the question rests with the underwriter, and the answers range from "Yes, it classifies as a block house" to "Send us more information."

As for Terry, he's busy. Hooked on Papercrete since he saw his first demonstration in 1999, Terry said he eventually plans to market pre-formed blocks on a retail level and is continuing to experiment with forms and sizes.

(c) 2001 The Santa Fe New Mexican

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