When the Ann Arbor area housing bubble burst, it hurt not only local builders and homeowners. It put house building programs for students on shakier ground.

For the first time in its 40-year history, the Ann Arbor Student Building Industry Program has launched a fundraising campaign to make up for lost revenue from the soft market. 

The non-profit program offers about 25 Ann Arbor high students hands-on experience of building a new house each year, and is in partnership with the Ann Arbor School District.

The Ann Arbor Student Home Building Program has developed and owns 11 lots in the Sumerset Neighborhood. Four homes are now complete, and students just completed the foundation for the fifth home in the development.

Until last year, the sale of the houses was always enough to cover the costs for materials, sub-contractors and administration, with enough left over to fund three scholarships for graduates of the program, said Tom McMullen, member of the Student Building Industry Program Board of Directors. There were years when the program cleared up to $30,000, he said. 

Times have changed.

There’s been between a $10,000 and $20,000 deficit for the last two houses, said McMullen, who is heading up the new fundraising campaign. While the program isn’t in immediate peril, it can’t continue to operate long term losing money, he said.

“Our scholarship fund is depleted. Who knows how long the housing recession or depression will continue.”

The most recent house was completed in June and closed earlier this month. It is 1,800 square feet with three bedrooms and 3 and a half baths. A finished lower level adds another 500 square feet. The original listing price was $305,000, and it sold for $289,000, said Pat Durston, the Realtor who listed the house and is also a board member. She does not collect commission for the sale. Until recent years, there were multiple bids on the homes even before they were completed every June, Durston said. The 2008 house sold for $280,000.

The board wants to raise $125,000 over four years to fund the four-year scholarships, which awards between $1,500 and $1,000 a year to three students studying an area of construction, including architecture, construction management and interior design.

“We’re not destitute,” McMullen said, “but if we keep losing money on the houses, it would jeopardize the program.”

But Robert Chizek, president of the board, said the program isn’t going away any time soon.

“What we’re doing (with fundraising) is a preventative strategy,” he said. “I can’t image this program going away. It’s a poster child of technical education programs.”

Still, in response to slow sales, the program has been trying to make the houses more marketable by adding features such as three-quarter-inch oak floors, hickory cabinets and green features such as a front porch made from recycled materials and a tankless hot water heater, Durston said.

“They are premium houses. People might think it’s less quality because it’s built by students, but it’s the opposite. There are so many eyes on the house: The instructor, assistant instructor, trade contractors.” 

They are also trying to cut expenses, Chizek said, and there’s a lobbying effort with state lawmakers to eliminate the transfer tax for student-built houses.

Until a few years ago, students built houses scattered around Ann Arbor. With available land for building in short supply, the program purchased a parcel of land off of Dhu Varren, between Nixon and Pontiac Trail, and began developing the Sumerset Neighborhood. There are 11 plots in the neighborhood, and ground is being broken for the fourth house. Ann Arbor schools provides instructors for the program.

The fundraising campaign kicks off at 12 p.m., Sept. 25 across the street from the most recent house at 2377 Earl Shaffer Court.