Sophomores Xander Smaby and Delila Gonyea were unbeatable in the recent Stofer/Stensby Student Scholarship Competition, with their ECON Habitat Project taking first place. Smaby found inspiration for the project while visiting the seaside town of Marsh Harbour in the Bahama Islands a few years ago. What many would call waste, Smaby called potential as he envisioned how shipping containers left ashore could be transformed to help solve the low-income housing crisis in his Minnesota community.
To develop the idea, Smaby reached out to friend and fellow entrepreneurship classmate Gonyea, who brought passion and knowledge in real estate to the project. The Stofer/Stensby Student Scholarship Competition is available to University of St. Thomas students who have formed a real estate-affiliated business idea that has viable business potential. A panel of judges evaluated the projects on the merits of the idea and the excellence of each group’s presentation. The judges awarded four scholarships; the Smaby-Gonyea duo received $10,000.
In conjunction with the first-place winner announcement, the Stofer/Stensby Student Scholarship Competition recognized Herb Tousley as the 2020 inductee into the Minnesota Real Estate Hall of Fame. Tousley served as a professor and the director of the real estate program and the Shenehon Center for Real Estate in the Opus College of Business prior to his passing last January.
Driven by the ever-present low-income housing crisis in the Twin Cities, Smaby brainstormed the ECON Habitat Project while on vacation with his family three years ago.
“It looked like a whole city of shipping containers,” said Smaby. “They are piled up just sitting there, basically wasting away.”
Seeing large, empty storage containers left on the side of the shore, Smaby was inspired to solve two issues: the housing shortage and sea-freight waste.
“The ECON Habitat Project is a renewable, low-income housing development project and [we] focus on solving the low-income housing crisis in a new and environmentally-friendly way,” explained Smaby, who also is pursuing a degree in finance and a minor in data analytics.
Currently, Minnesota is experiencing its greatest housing shortage in decades, according to a recent report by Prosperity’s Front Door. Twin Cities Public Broadcasting Service and the Pohlad Family Foundation found that in 2018, 10,233 Minnesotans identified as homeless and 50% of homeless Minnesotans were under the age of 24.
“We are hoping to make an impact by providing high-quality, low-income housing to as many Minnesotan families as possible,” Smaby and Gonyea wrote in their application.
The ECON Habitat Project compiles three to four shipping containers together in order to make a single house. “It’s about the size of an average apartment or a smaller house here in the Twin Cities, so it is surprisingly accommodating for any size family,” Gonyea said.
The houses are modeled to be a two-bedroom, one-bath; two-bedroom, two-bath; or a three-bedroom, one-bath. Their target market is aimed at assisting single families who qualify for low-income housing; families are required to apply to their local public housing agency and will be interviewed. In their application, the duo states with the understanding that in Minnesota, about 30% of people living in poverty are Native American, 30% are Black and about 19% are Hispanic, the project is focused on providing affordable housing to these minorities.
Battling with shipping container transit costs and the first development $2.6 million ticket price, Smaby commented, “It’s not like something that is super cheap or easy to start. With anything in real estate, it is always land expense, especially in the cities, so currently nothing is planned, but that isn’t saying never either.”
ECON Habitat Project in several competitions
After receiving immense feedback from professors, mentors and the judges of the competition, the pair says that they were able to “visualize what it would take” to kick-start the start-up. With a majority of competitors in the higher market who specialize in crafting custom-built, luxurious shipping containers, there is no direct competition that is making low-income houses in the area. “It is a crisis that is here too and we need to deal with it here first,” Smaby said.
Giving advice for those looking to apply in future years or to other similar competitions, Smaby remarked, “Be thorough and reach out to as many mentors as you can because they are going to know all the ins and outs beforehand.” Increasing your knowledge about the specific issue you are solving is also key but also having a network with “people who are actually doing it (and who) know what is going to be a roadblock and how to get over that because they’ve been there too,” Gonyea added.
The remarkable idea also led them to the semifinals in the Fowler Business Concept Challenge.
Fighting for another title, the two will be competing in the St. Thomas Business Plan Competition this winter with their idea. The St. Thomas Business Plan Competition is open to all current, registered St. Thomas students and alumni who have graduated within the past five years, with plans for a new business that’s been incorporated less than 12 months.