Can this techie reinvent low-income housing?

(FSB Magazine) -- Tom Pirelli's life changed on a hot, black-shingled roof in Ensenada, Mexico, where he and others were building a plywood house for a poor family as volunteers for a nonprofit. He relished the experience but fought a sense of dismay. "I was disappointed in the quality of houses being built: small and cheap as we could make them, plus it took 30 people two days to build," recalls Pirelli, 59. "As a lifelong engineer, I knew there had to be a better way."

So he designed one. Pirelli is a former tech entrepreneur who sold his $80-million-a-year medical software company, Enterprise Systems, in the late 1990s. In 1997 he launched the Arial Foundation (arialhome.org), a nonprofit based in Riverwoods, Ill. Its original focus was helping inner-city kids. But after his Ensenada trip, Pirelli added a new goal. Now he wants to build a million houses for the poor within ten years. That's more than four times as many houses as Habitat for Humanity (habitat.org) has constructed in the past 30 years.

Using insulated metal panels commonly found in outdoor refrigeration units, Pirelli designed a modular house with a shower, toilet, kitchen, vinyl floor, and ceiling fans. In December he and a group of Chicago-area volunteers built two of the homes in Ensenada. His next step is to build manufacturing plants - first in Mexico and then around the world - and use economies of scale to reduce the house price to an affordable $5,000. In July, Pirelli and his crew will assemble 450 wall and ceiling panels in Ensenada and build eight houses. In the future local workers will replace volunteer builders, filling jobs as they provide shelter.

Pirelli knows the marketing power of round numbers such as one million homes in ten years. He has one more. "I'm investing about $1 million a year to get this project launched," he says. "That should attract a lot of attention."