Lake County housing project faces higher modular prices; commissioners weigh state gap funding and timing

County staff and representatives from Oakwood told the Lake County Board of County Commissioners that final pricing for a 24‑unit modular housing project has risen, forcing staff and the developer to rework affordability assumptions and funding requests.

Oakwood and county project leads said the factory provided final pricing the morning of the meeting and that Oakwood was negotiating with its supplier to hold pricing past a May 1 cost increase; Oakwood obtained a July 1 pricing hold at the factory. Staff reported there are 97 people who have asked for information about the project and 17 prequalified buyers from the first lottery; about 14 of the eventual buyers are expected to fall below the county’s target area median‑income threshold and require subsidy to reach an affordable payment.

Because the new prices push sales prices well above the original affordable target, county project staff described reapplying for state gap funding. Staff said they initially submitted a letter of intent for a previous funding round and were told some earlier price assumptions would have made the project ineligible. After resubmitting a letter of intent, state staff encouraged the county to apply for the maximum available gap amount (staff reported the state advised applying for $70,000 per door, up from earlier assumptions of $50,000). County staff cautioned that state funds are oversubscribed: many applicants submit letters of intent and a smaller subset actually complete the full application, which uses a neighborly.com portal and requires substantial documentation.

Project staff outlined the timing and risk trade-offs: Oakwood wants to order modular units by July 1 to meet a 2025 build window; a successful state award would not be fully executed until September, after which grants can reimburse eligible costs. If the board directs staff to apply and the county proceeds with ordering units before a state award, the county could be exposed financially if the state does not fund the gap. Staff said the contract with the modular manufacturer includes contingency and that current estimates include an added per‑unit contingency the state requires (the contingency line added roughly $13,000 per unit in staff calculations). Officials also noted recent increases to market mortgage rates (discussed in the meeting as approximately 7% in examples used by staff) that further affect buyer affordability.

Staff presented three broad options for the board: (1) proceed now, submit the state application by the May deadline and order boxes in time for a July production slot while accepting the risk that county subsidy would be required if state funds are not awarded; (2) delay the project and apply in a later state round (state staff indicated a second round could open in August) and order boxes when pricing and funding align; or (3) pursue design/value-engineering changes to lower unit costs. Staff recommended pursuing the state application and asked for board direction so staff could present a formal resolution and related contract documents at the next regular meeting and, if necessary, a special meeting to meet application deadlines.

Commissioners and staff also discussed marketing and sales mechanics: Oakwood committed to assist with outreach and the county will run a second lottery for remaining units if the board moves forward. Oakwood representatives said they will continue factory negotiations to reduce cost and to extend pricing guarantees. No final commitment to order units or to sign a revised contract was recorded at the work session; staff asked the board to indicate whether they want the county to submit the state gap‑funding application and, separately, whether the board is willing to accept the potential county funding exposure if the state award does not materialize.