Chad Ludeman is looking somewhat ruefully through the rain-flecked front windows of the 100K House. A pair of residences are going up across East Susquehanna Street in Philadelphia’s still-scrappy East Kensington neighborhood, where Chad, his wife, Courtney, and their development company, Postgreen Homes, are diligently developing a quartet of sustainable-housing projects—100K, Skinny, Passive, and 2 Point 5 Beta—all to be sold for less than $300,000.

Chad’s wariness is twofold: It’s that of an entrepreneur anxious to keep hold of his end of the market in a neighborhood Postgreen has laid claim to, and that of a Philadelphian who values small, green homes within reach of the young professionals (like him) otherwise priced out of owning in Center City. Thanks in part to the Ludemans, East Kensington might be the next frontier in the sprucing up of Philadelphia—but as the early construction across the street suggests, not everyone thinks as they do.

“In this recession, I think we’ve learned that housing values have very little to do with housing,” Chad observes. And though new development across the street and speckled across the surrounding blocks may bode well for Postgreen’s fortunes, Chad sets higher store by a house’s Home Energy Rating System (HERS) rating than its resale value.

Though affordability and sustainability are Postgreen’s clear aims, the developers’ understanding of value extends beyond the property line. But to achieve what they imagine people like themselves want—small, sustainable houses for reasonable prices—Chad and Courtney first had to prove they could make one for themselves. By setting a tight budget, building only as much as they could afford, and making the house’s shape conform to the budget’s limitations (“The box comes first!” was both a rallying cry during the design phase and a fact of life during construction), Postgreen and Interface Studio Architects successfully built the first installment in what Interface principal Brian Phillips calls “a little design ghetto over here.”

The Ludemans moved into their debut creation, the 100K House, in 2009, using it as both a domicile and a test case. The project comprises a pair of adjacent, two-story homes clad in durable HardiePanel vertical siding that announces them as defiantly modern. What’s not visible from the street, though, is the 100K House’s LEED Platinum certification—
or its 2010 LEED for Homes Project of the Year award from the U.S. Green Building Council.

“Nobody’s doing much modern, small, and green development around here,” says Chad. “There have been some row-house renovations and rehabs, but
I think ours must be the first ground-up house built in East Kensington in the last 20 or so years.”

The novelty, and the success, of the Ludemans’ two-unit building (the 100K House is just one of the houses; the adjacent 120K cost a bit more to build) is due to its small size and devotion to green building practices, but the real selling point is that their 1,296-square-foot residence came in at just $81 per square foot in construction costs. The “100K” moniker comes from the house’s hard materials and construction costs (they actually ran closer to $105,000: $45,000 in materials and $60,000 more in labor), though the remaining soft costs like permits and architect’s fees brought the small residence in for around $200,000. The lot cost a mere $37,500 per unit, with $3,000 more in closing fees. East Kensington’s cache of cheap, vacant lots, proximity to the hip Fishtown neighborhood, and nearby public transit make it an ideal laboratory for inexpensive urbanity.

Keeping costs down meant building in a rougher neighborhood as well as sticking to a limited palette of materials: The space is defined by exposed concrete and birch plywood, an Ikea kitchen, and the HardiePanel vertical exterior. But the real savings came not so much in materials as in the marriage of form and function. The 100K House’s boxy, unfussy form kept material and labor costs to a minimum and worked entirely in the service of constructing of a tight thermal envelope and a valuable LEED rating.

“We had to hit the budget to prove that the concept could work,” says Phillips, noting that he treated his design process “more like industrial design than architecture.”

“As an architect you often collect information from your client and then imagine what kind of a house might meet those aspirations,” Phillips continues. “In this case we knew exactly what the aspirations were: $100 per square foot, LEED Silver [they hit Platinum as a “happy accident”], and a provocative design. Then we asked ourselves, Can a house really do that?”

It can, though getting there has as much to do with what Phillips calls “accepting less” as it does with budget-conscious construction. The perpetual question in the numerous iterations of the design was “If we do a little less, can that actually be cooler than [doing what people have come to expect, but] cheaping out on it?”

Doing less also meant consuming less. The 100K House is close to 70 percent more energy efficient than the older properties next door, thanks to heavy-duty insulation, tight-fitting windows, and serious attention paid to the home’s R rating. It’s a common theme in Postgreen’s projects: The Skinny Project down the block has a HERS rating of 23—Chad claims it’s the lowest in the city for a residence—and the Passive Project a few streets down is built to Germany’s highly efficient Passive House standards.

“When I tell people that we’ve hit LEED Platinum,” says Chad, “they’ll say, ‘So you’ve got bamboo floors and geothermal heating.’ We don’t have any of that. To be honest, the 100K House is not over the top in terms of energy efficiency,” he continues. “It’s better than code, sure, but ultimately it’s just what makes sense.”

Courtney adds that last winter, thanks in part to their solar thermal panels for heating hot water, their heating and hot water bill combined, in chilly Philadelphia, was never more than $70 per month. “We have no fights about the heat anymore.”

Another reason for that low energy bill is because Postgreen cast off a hoary developer orthodoxy: They nixed the third floor. “Some developers call the third floor ‘the money floor,’” Chad says. The jump in profit developers see in selling a three-story house, as opposed to a two-story house, is significantly relative to the cost of building that large master bedroom and en suite bath. “A lot of developers don’t want to sell at $250,000. They’d rather come in when they can get $450,000 or $500,000,” Chad explains. “We want to be able to deliver highly efficient homes to average working people. Efficiency and design should not only be for the wealthy, in our opinion.”

But for average working people to embrace Postgreen’s ethos, they must take Phillips’s ideas about accepting less to heart. The Ludemans’ home consists of two floors, the first little more than a concrete-floored rectangle housing a living space and the kitchen. Upstairs is Chad and Courtney’s modest bedroom, a small room for their son, Teague, and a bathroom that boasts the only door in the house. Bikes hang in plain view beneath the stairs; a small island with an induction cooktop separates the kitchen from the living space.

The home’s furnishings and fixtures are equally humble. A row of bare CFLs hangs from the ceiling of the living area, and the appliances in the kitchen are sturdy, efficient fare from Frigidaire.

The Ludemans, who brought little furniture with them to the 100K House, outfitted their new space for $7,500. The result is a tasteful curation of Ikea and CB2 goods peppered with an Eames rocker in Teague’s room, a Mag table and Perch lounge chair by Eric Pfeiffer for Offi (“That chair was a small splurge,” says Courtney, “but I lusted after it”), a dining table fabricated out of old reclaimed pine beams by Philadelphia’s Bench Dog Design, and a pair of custom barstools made by Kala Studios. The olive oil might well be the only object professing to be “Made in Italy.”

The biggest divergence from the home’s no-frills mission, and easily the biggest design move on the interior, is the staircase railing, a custom-built bit of low-tech high design. Made of laminated birch plywood, the barrier does double duty as a handrail and a useful divider between the public downstairs and the private second floor. Cutouts in the panels frame the view from the stairs and add a bit of visual flair while still keeping to code.

Ultimately, Postgreen’s notions of affordability extend beyond the line-item budget. They’re about finding a point of equilibrium between design and value, energy efficiency and attainable, middle-class housing and accessibility to downtown. “Until pretty recently, people imagined that the value of a home was tied to large square footage,” says Courtney, but Postgreen’s thinking—perpetually that of the citizen-developer—extends beyond what it takes to make a sustainable home to what it takes to make a sustainable East Kensington. Making a vibrant, green community means never losing sight of who does, and who could, live right next door.

To see more images of the project, please view the slideshow.