The innovative social housing developer wants to build the winning concept in its model village of New Earswick in York. It hopes to follow up this project with a much larger mixed-income community of 540 homes based on similar ideas in Derwenthorpe to the east of the city.
Foundation director Richard Best believes the real challenge is applying good design to inexpensive homes - an area he feels has been long overlooked.
He said: 'Although British architects win international awards for major commercial and cultural buildings, residential architecture for the middle and lower housing market has been largely ignored.
'The foundation can lay some claim to being a godparent of liveable suburbs, since our village of New Earswick was a precursor to garden communities in Letchworth and Hampstead.'
'We hope our competition can make a useful contribution to good suburban design at the start of a new century,' he added.
Teams of architects, developers and surveyors need to submit expressions of interest by the end of March.
Four finalists, who will each receive £10,000, will be selected on 15 April. Further information about the competition can be found on the foundation's website at: www.jrf.org.uk/housing andcare/suburbanhousing/