Pablo Nava, ’08, grew up mostly in Texas, the son of a Mexican father and an American mother. From an early age, they taught him that caring has no borders.
When Nava was in grade school, the family would gather clothes and toys before heading south to visit relatives in Cihuatlán, Jalisco State, twice a year. “We would bring down 18 pieces of luggage,” says Nava, “and we’d pay a taxi driver to take us to the poorest towns he could find. Then we would knock on the door and give people a whole suitcase full of clothing.”
Seeing dire poverty in Mexico when his own family in the United States had so much “was definitely humbling,” says Nava, who is now 22. But he also learned that it was rewarding, and possible, to help others meet their basic needs.
Nava’s favorite cousin, Brian McCarthy, 30, was struck by similar contrasts on a business school trip to Ciudad Juárez, Mexico, three years ago. Then the division president of an Albuquerque, N.M., home-building company, McCarthy toured the maquiladoras—assembly plants set up by U.S. and global manufacturing firms on the Mexican side of the border.
“On the way out of town, our bus drove through a shantytown with houses made out of wood pallets, cardboard and scrap building materials,” McCarthy recalls. “It was amazing for me to see that people who had a regular paycheck from a Fortune 500 company couldn’t afford a safe and comfortable home.”
McCarthy began to explore low-cost housing options for Mexican border communities, focusing on a design he’d seen in a trade magazine
for homes built from recycled shipping containers.
As the idea evolved, he consulted Nava, then a sophomore business major at Notre Dame. In 2007, the cousins entered and won the Gigot Center for Entrepreneurial Studies’ Social Venture Business Plan Competition with their blueprint for PFNC Global Communities. (The winning team also included Kyle Annen, ’08, Maggie Welch, ’08, and Nava’s mother, Kate. Adjunct professor Frank Belatti, ’69, mentored the project.)
PFNC stands for “Por Fin Nuestra Casa,” which is Spanish for “Finally, a Home of Our Own.” The company’s name reflects its mission: to raise the standard of living for impoverished families by giving them a chance to own simple, affordable homes made from recycled containers. Priced between $8,000 and $10,000 per unit, the 320-square-foot houses are inexpensive, sturdy and functional. They are also badly needed in border cities like Juárez, where rapid population growth has outstripped available housing stock.
Just across the Rio Grande from El Paso, Texas, Juárez is home to more than 300 (or 25 percent) of Mexico’s maquiladora plants. Jobs at companies like Motorola, General Electric, Johnson & Johnson, Foxconn and Electrolux have drawn thousands of workers from the rural interior of the country and contributed to tripling the city’s population to 1.5 million since 1970.
“There are a lot of opportunities, but also a lot of problems because the physical and social infrastructure have not been able to keep up. You
have so much growth taking place and at the same
time, so much need,” says Dante Di Gregorio, a management professor at the University of New Mexico. By PFNC’s own estimates, which are conservative, Juárez has a housing shortage of 25,000 units or more.
Earning an average wage of $2 to $3 per hour,
most maquila workers can’t find or afford adequate
housing. Along with other struggling residents of the border region, they build precarious homes from whatever materials they can find, settling in vast slums called “colonias” that lack running water, electricity, sewers and other amenities.
“It’s difficult to look at the way many of these families live,” says Nava. “The working conditions that they go to every day are technologically advanced. They work in brand-new factories that rival any in the United States. But when they come home, they’re taking a couple of steps down.” In Nava’s view, corrugated steel containers—outfitted with furniture, electricity, plumbing, windows and locking doors—represent a major step up.
The first PFNC homes won’t be manufactured,
sold and delivered to Ciudad Juárez until mid-2009. Even so, Nava’s story reached Notre Dame football fans this fall in a nationally televised halftime video. On frequent visits to potential collaborators on both sides of the border and from its one-room office in Corrales, N.M., the company is winning enthusiastic supporters for its work.
One is José Reyes Ferriz, a 1988 Notre Dame
Law School graduate and the mayor of Ciudad
Juárez. “It’s an excellent way to use the containers,”
says Ferriz, “and a good way for people who don’t qualify for government housing credits to afford a dignified place to live.”
Another is Jerry Pacheco, executive director
of New Mexico’s International Business Accelerator, who says, “I have faith in these guys because they’re very persistent, they’re young, and they’re starting out with a very good product that actually has potential in this market niche.” Container homes can be produced and priced competitively, he adds, “and they can be set up quickly and integrated into modular pieces. This is exactly what Mexico needs for its lower-level housing.”
Initially, PFNC launched its operations with Gigot Center prize money and McCarthy’s personal savings. In October 2008, the company received a $1.9 million equity investment from Gray Ghost Ventures, an Atlanta-based venture capital firm that supports market-based solutions to social
issues. “We have long looked for an affordable housing business model that would allow us to apply our expertise in financing to some of the poorest sectors on the planet, but at the same time provide an opportunity for wealth creation at this income level,” says Brian Cayce, principal at Gray Ghost Ventures.
He says PFNC’s model was “very, very powerful” because it included “all the elements of the
ecosystem” from building the homes to finding
customers along the border to helping them finance ownership. “The use of surplus shipping containers was an added twist, but if you talk to Pablo and Brian, you find it’s more about getting to the right price point and asking, ‘What price can this customer base sustain? How do we responsibly bring this ownership opportunity to them?’” says Cayce.
PFNC will use the investment to set up a manufacturing center in Mexico, as part of a strategy to create jobs and benefits for employees who are from the same demographic as its customers. “From an operational perspective, we will be able to realize other costs savings in Mexico that will help to maintain the affordability of our offering,” Nava says. “We will also be paying above the average hourly rate.”
Because of the lopsided U.S. trade balance, PFNC’s main input—gently used,
8-by-40-foot shipping containers—should be cheap and plentiful. SeaCo, a subsidiary of General Electric and the world’s largest container supplier, has agreed to offer units from its surplus at the discounted price of about $1,500 each.
In 60 hours, PFNC will transform each empty container into a home with custom furniture, appliances, hookups for air conditioning, ventilation, electrical and plumbing systems. To keep the interior temperature at a comfortable
75 degrees despite the intense Mexican sun,
the units will be prayed with a light-reflecting epoxy coating.
Following early advice, PFNC built a 320-square-foot prototype home that it is using to procure sales and guide market research. (See box.) The single-family floor plan features a full kitchen, bathroom and bedroom spaces, and can accommodate two to six people. Another “urban-style” design would have multiple containers stacked in an attached, multi-family condominium configuration with communal recreation areas. Grouped units are priced less than free-standing ones.
From London to California, architects are designing container homes and apartment complexes for upscale customers, often combining several containers to create stylish, eco-friendly structures. But PFNC is going after a different market, and helping low-income buyers to finance their home purchase may be the company’s biggest challenge.
PFNC is pitching a plan that would allow workers to purchase homes through earnings withholdings, essentially making home ownership a workplace benefit. The scheme would have the added advantage of reducing employee turnover, which is high at Juárez maquiladoras.
Although employers would facilitate financing, workers would own their homes and the land they occupy. “Home ownership is an important aspect of being financially successful in all cultures,” says Nava. “Our goal isn’t so much to tie the employee to the maquiladora as it is to raise the standard of living.”
Container houses, or “casitas de contenedor,” are small, but Nava and McCarthy have big dreams for the future. If operations in Juárez succeed, PFNC hopes to spread the model to other Mexican border cities and beyond. “Our five-year goal
is to build 15,000 homes a year, providing an
ultra-affordable solution to as many people as we can in as many countries as possible,” says Nava.
—Elizabeth Station is a writer based in the Chicago area.