Editor's Note: This story was updated to provide additional information about how the city defines "permanently affordable."

Dozens of affordable homes are planned for northwest Bloomington thanks to a pending partnership between the city of Bloomington and an as-of-yet undetermined housing developer.

City leaders are working with proposals from three developers to build homes on 45 lots southeast of the intersection of Interstate 69 and the Indiana 45/46 Bypass.

Nearly 550 apartments,townhomes, duplexes coming to Bloomington's northwest side

Zoning allows single-family homes, duplexes, triplexes and quadplexes, meaning the lots could hold between 45 single-family homes and 180 units in quadplexes. Whatever the final tally, the developer will be required to make at least half of the units permanently affordable, with the city targeting a purchase price of no more than $250,000. The remaining portion of the houses could be sold at market rate.

John Zody, director of the city’s Housing and Neighborhood Development department, said via email that the city defines "permanently affordable" as 99 years.

"It is usually put in place by covenants and restrictions on the property when it is sold," he said. "There are also models such as land trusts, which we're considering for these lots, where the land trust (a non-profit) owns the land and the homeowner owns the home. This helps keep the cost down and there's a model of affordability in place there as well. Another program we have is called the Shared Appreciation Homeownership Program ... . We also have other down payment assistance programs to help with purchase that are income-restricted."

Zody said that while such programs reduce equity that owners would build, the programs "offer an opportunity for those who may not be in a situation to compete in a tight housing market like ours to be in a position to purchase a home."

Three developers — Clear Creek Homes, Habitat for Humanity of Monroe County and a partnership involving Indianapolis developer Andrea Kent — have responded to a request for information from the city.

Zody said by phone that the city is evaluating the proposals. He said he hopes a deal can be inked yet this year, though many details, including the share of each housing type, are yet to be determined.

“It’s a blank canvas, if you will,” he said.

Zody said the city hopes to have a mix of housing types, with the primary goal being they are permanently affordable.

In the document to solicit information from developers, the city wrote that it “seeks knowledgeable, financially sound, and experienced housing developers that will apply creativity to meet Bloomington’s current and future housing needs.”

Wendi Goodlett, president and CEO of the local Habitat chapter, said the organization proposed using 35 of the lots to build 45 homes, ranging from container and single family to quadplexes.

“Our goal is to have them all affordable,” she said.

Some of the details will depend on how the land is transferred, Goodlett said. A land trust model would mean the homeowners pay a small monthly fee for the land, and would purchase and own only the home.

The land is currently owned by Trinitas Ventures, which has built the Atlas on 17th development on the southern part of the property. However, once all of the infrastructure — roads, sidewalks, sewer, water — on the property is complete, Trinitas will give 45 lots on the northern part of the development to the city, part of an agreement the parties reached during the planning approval process.

On Tuesday afternoon, construction crews were engaged in earth moving and other activities. Roads and sidewalks in the neighborhood had already been completed. The future neighborhood was abutted to the north and west by trees and to the south by apartments.

Goodlett said the possibility of having residents pay a small fee for the land, development of which did not incur costs for infrastructure, would lower home prices below $250,000.

Brett Oeding, owner of Clear Creek Homes, said he has proposed building about 40 modular homes on the property, which could range from single-story ranch homes to quadplexes.

Modular homes are manufactured offsite, then assembled on-site, which reduces construction time and costs as workers do not have to travel back and forth to the site, he said.

The homes have become especially popular on the coasts, where high property prices are preventing many people from owning other homes.

“It makes more and more sense to build modular,” Oeding said.

He said he would expect the home prices in the new development to start between $175,000 and $250,000.

Oeding said the Bloomington-based company typically builds about 65 homes per year within a 75-mile radius of Bloomington. He said the company could put up the 40 homes on the new site within a year.

Kent could not be immediately reached.

Rising prices for raw materials, labor, land and city government-required infrastructure such as sidewalks have made it difficult to build new homes in Bloomington for less than $300,000, according to data from Habitat for Humanity and a local builder.

The city wrote the pandemic “has exposed housing vulnerabilities for residents and increased stress within the area’s housing market and, consequently, has strengthened the City's commitment to increasing affordable, owner-occupied housing.”

It also wrote “lower income and workforce residents have increasingly been priced out of living near downtown Bloomington and other areas of the city.”

Days $175K starter homes goneWhat it costs to build a home in Monroe County

Based on a Herald-Times analysis of home prices and income data, Monroe and neighboring Owen counties in May were the least affordable markets in the state for home buyers. Monroe County’s median sales price this year is $300,000, according to the Indiana Association of Realtors.

“Costs are making it really prohibitive to house families affordably,” Goodlett said.

To make the math work for the Arlington Road project, Habitat would shift from its usual focus on single-family homes to include modified shipping containers to reduce raw materials costs and build quadplexes to increase density.

“I hope that people understand that … we have to look at different ways of doing things,” Goodlett said.