A house that costs $20k

http://www.fastcoexist.com/3056129/this-house-costs-just-20000-but-its-nicer-than-yours

by prostoalex • 10 years ago

312 210 10 years ago

fastcoexist.com

avelis• 10 years ago

It's fascinating to see innovation in this space.

I am also curious to see how the mortgage and realtor industry responds to this type of demand in the future.

SwellJoe4• 10 years ago

As noted in the article, the current mortgage situation isn't good at all.

I wanted to buy land a couple of years ago, to build a tiny house on. I went in willing/able to put a 30-40% down payment on the property, with plans to build my own tiny house completely self-funded over the next year or so. The banks were simply not at all equipped to address that. Despite my excellent credit (high 700s) and low debt, and the cash to make the down payment and good income, they made it clear that I would be able to get a loan on a regular sized house with much less money down, but would not be able to get a loan on just a piece of land with plans to put a tiny house on it.

They were also willing to talk about loaning money for the land, if I could show how I was going to afford to build a "regular" house on the property (requiring going through a builder and getting a loan on the future house). In short, the was no way, short of paying for the property entirely out of pocket I would be able to buy land and build my own tiny house on it.

It was incredibly frustrating. I mean, I'm talking to these folks and they are, with a straight face, saying, "Well, as a first time home buyer, you could put 5%-15% down and buy a house, with the bank loaning you the other ~$160,000." And, I'd say, "OK, but what if I put $25,000 down, and only borrow $50,000 from the bank, and buy a piece of land, and over the next year I build myself a house on that land." And, they'd reply, "That's just not gonna happen."

So, several banks would have been happy to loan me $160k with $16k down on a full-sized house, but no one was willing to loan me $50k with $25k down on land for a tiny house.

I gave up on buying at that time. Will save up and pay cash for a plot of land in another year or two, and build my tiny house then.

I doubt it will change any time soon. Home builders have no motivation to build smaller, banks have no interest in betting on self-built homes. Which is understandable to some degree...but, the sheer hardheadedness of the response was really surprising, to me. I'd always assumed I would have no trouble getting whatever kind of loan I wanted, as long as I brought enough cash to the table. But, for land-only deals, many banks want to see 50% or more down payment, which is silly.

So, tiny houses remain mostly the privilege of those wealthy enough to afford to buy land without a mortgage, or those who don't mind living in places where land is very, very cheap. It's also possible to park a tiny house in a trailer park or RV park (and I know some folks who do that), but that misses the point of home ownership, for me.

techsupporter2• 10 years ago

If you're interested in knowing why, it's because mortgages are sold as securities these days (and have been since before the Big Collapse). If your mortgage is significantly not like the other mortgages, it can't be bundled and sold into the pool of other securitized mortgages. That means your lender has to carry the note itself and the overwhelming majority of lenders--banks and brokers--don't do that.

The other problem: banks need a property that, if foreclosed upon, can be sold to recoup their investment. A friend of mine is having this exact problem. He has a house that could withstand a bomb being dropped on it but it is built to his preferences and the banks he has visited to inquire about refinancing have all said that a sale would be difficult. Too risky to use as collateral since they can't be relatively certain of recovering against loss.

What you're looking for is a "portfolio loan," where the financial institution keeps your loan on its own books. Some credit unions do this (mine does) in situations like yours. The interest will be commensurate with the credit union's guess of how easy your property will be to resell (both in the opinion of the underwriter and of the outside, independent appraiser) to pay for the risk but it can be done.

_s• 10 years ago

It falls down to the value of your proposal, eg:

Land: $25,000 Resale at $20,000 to $30,000

Tiny House: $25,000 Resale at -$5000* to $35,000

Normal House: $100,000 Resale at: $75,000 to $125,000

* Next owners may want it removed

A $50,000 loan doesn't make sense / is too risky.

I know the above is grossly over simplified, and there's hundreds to thousands of factors going into a risk / valuation but currently banks aren't equipped to handle tiny homes, not to mention the market for them isn't as big yet to justify it.

maxwelljoslyn• 10 years ago

That loan situation sounds incredibly frustrating. The banks are like, "come on man, it's cool, borrow more money from us," because that's in their interest ... but if you don't wanna play by their rules, then you get shot down.

Sorry to hear it -- both "sorry" in the sense that I wish it hadn't happened to you, and sorry because I myself have had pipe dreams of buying my own land and building on it, so here is some evidence against that being possible.

ascorbic2• 10 years ago

I love things like this, but also saddened that in the UK the land to put it on would cost at least ten times that amount. The planning system here is a disgrace.

rwmj3• 10 years ago

UK housebuilding companies are sitting on (by various estimates) 400,000-600,000 plots of land which have planning permission, but they haven't built on. That's about 3 years' worth of new houses. The reason is to hold up prices, and because (with "ever-rising" prices) if they build in the future they will make more profit.

There are problems in the planning system, certainly, but at the moment we need an undeveloped land tax to stop this behaviour.

Sources: http://www.theguardian.com/society/2015/dec/30/revealed-hous... http://www.local.gov.uk/media-releases/-/journal_content/56/...

mdw• 10 years ago

I really hope housing becomes a key electoral issue for the next government. The current housing crisis in the UK is impoverishing an entire generation.

dazc• 10 years ago

The reason is to hold up prices...

Not just this but also because they still need capital to finance the construction process. Borrowing short term is a model that works for them when demand is high - they don't want to be sat holding empty properties after all.

Longer term finance, allowing houses to be built for rental, is one solution that's slowly gaining traction with pension funds and the like.

Of course, as you say, the status quo suits the major housebuilders just fine so there is a lot of inertia when it comes to adopting new and innovative business models.

semi-extrinsic• 10 years ago

The government is not at all interested in fixing this, because it would probably crash the housing market. Which people (both politicians, many of the people who elect them, and perhaps most importantly all of the people who fund their campaigns) think would be a Very Bad Thing.

Seriously, it may be hard for young people to enter the housing market. But no-one wants to go for a solution that leaves the people who do own houses today with mortgages bigger than what their house is worth on the market. You don't help 10% of people by screwing over another 70%.

mseebach3• 10 years ago

The link does not support your assertion that there is planning permission on those plots. After the hand-waving about profits, there are nearly identical quotes from developers explaining that the bottlenecks are planning permission, skilled workers and building materials.

nostrademons• 10 years ago

A land tax in general may not be a bad idea:

https://en.wikipedia.org/wiki/Land_value_tax

makomk4• 10 years ago

Also, if they don't build homes fast enough, the national government steps in and overrules the local planning process, allowing the companies to build on other, more desirable greenfield sites that they ordinarily would never have gotten planning permission for.

MrBuddyCasino• 10 years ago

A relative of mine is building a house right now. They bought a property and they need to start construction within 1 year, or else they loose that property. Not sure if it works that way everywhere in Germany.

noja3• 10 years ago

Excluding all costs apart from material. Yeah, it doesn't cost 20k.

rgbrgb2• 10 years ago

How do you design a home that someone living below the poverty line can afford, but that anyone would want—while also providing a living wage for the local construction team that builds it?

Material is $14k.

noja3• 10 years ago

The articles says "Originally, the project aimed for a house that would cost $20,000 in total, including construction, though they now believe that more money may be needed to provide a living wage for builders."

So more than 20k.

Plus land. How much does the land cost?

roel_v3• 10 years ago

6k = 12 working days for a builder skilled enough to do everything from working an excavator to hooking up hvac. So they're claiming a house that can be build in 12 day, by a single person, ready to move in? Clickbait.

rgbrgb2• 10 years ago

Aesthetically not really sure, but definitely a cool idea. Here's hoping they build some of these in the Bay! I can see people buying these in expensive areas to offset the cost of the land.

Kind of reminds me Modern Shed [0].

[0] http://www.modern-shed.com/

Ao7bei3s• 10 years ago

How do you design a home that someone living below the poverty line can afford

Why not rent a flat instead? Wouldn't that be much more economical (no property prices, lower heating costs, less maintenance work, less risk, not built on the cheap)?

I don't understand the fixation on owning a house / living in a single-family house many americans seem to have.

techsupporter2• 10 years ago

One facet of it is cultural: For a lot of people, someone isn't seen as a "real adult" until he or she owns a residence. (Obligatory "if you have a mortgage you're just renting from the bank and have to fix the water heater yourself" line here.)

Another is financial: There are heavy tax incentives towards ownership, though this is lessened in the era of cheap money. (On the other hand, if a mortgage can be had for cheap, that puts upward pressure on house prices because fewer units of currency go towards borrowing costs.)

Still another is logistical: Most areas of the U.S. have very few renter protections. If your landlord wants you out and you're not under a current lease, you're out (property rights of the owner and all). This goes double for the desirable places to live. For those who can manage it, the stability of "my housing cost is a known quantity that varies only a little bit outside of my control" (obligatory "did you save for a new hot water heater?" goes here) outweighs the relative immobility of property ownership. Plus, a somewhat high price is put on the ability to paint one's own walls, have a pet, and do minor renovations without asking for permission. Witness the plethora of "home remodeling" shows and TV channels. In many rental units, doing this is not just frowned upon, it is actively forbidden by the lease.

As always, to stave off the inevitable replies of "but my rental experience has never been like that," your miles may vary. I lived in one apartment in Texas that let me do everything short of bulldozing my unit. I lived in another in Seattle that charged me $300 because I got a drop of orange drink on the carpet in a bedroom.

creshal• 10 years ago

So, the US favours owning residences because renters have nigh zero legal protection?

timje1• 10 years ago

I think this is also why home ownership is prized so highly in Britain - at least since the rental market was deregulated.

zo1• 10 years ago

"Still another is logistical: Most areas of the U.S. have very few renter protections. If your landlord wants you out and you're not under a current lease, you're out"

This sort of thing happens when you don't have a contract that enumerates what happens if either party wants out.

PhasmaFelis• 10 years ago

Judging from the name, I'd guess they're targeting rural areas. Rural land is dirt cheap, and it's not uncommon for even very poor families to have a decent plot that's been in the family for generations; but if there's a house on it at all, it's decrepit and crumbling.

This is the same group that Habitat for Humanity serves, for example. My mother helped build a Habitat house in Belize a while back; the land was a tiny scrap of muddy landfill in the middle of a slum, but the family owned it free and clear.

(These areas don't generally have apartments available at all. The economics don't support it.)

SwellJoe4• 10 years ago

America is big.

Things are spread out in most cities and towns. When living in the city, one gets value in exchange for giving up the privacy of owning your own home and land. And, it is not realistic for people who are poor, or even middle class, to own a home in a major metropolis, and so they often do live in an apartment or townhome (a mini-house that shares walls with one or more other townhomes...somewhere between a condominium and a real house). I would accept that kind of lifestyle if living in a densely populated city. I wouldn't if living in most mid-sized cities in the US...but, housing is still expensive. A tiny house on a plot of land fits the bill perfectly for me. I don't need more living space than an apartment provides, I just need more space than having neighbors on the other side of the wall provides. I also want a garden.

Americans who grew up in rural areas have an even more extreme view of how much space is the right amount than I do (I grew up in the suburbs, and still hate apartments).

Also, I want to own where I live, by the time I get close to retirement age (which I'm still a few decades away from, but it's part of the usual retirement plans for most Americans, and they start working on it during middle age).

Loughla2• 10 years ago

Americans who grew up in rural areas have an even more extreme view of how much space is the right amount than I do (I grew up in the suburbs, and still hate apartments).

Yep. To add to this. The right amount of space for me (raised rural) is so much that I can see neither see nor hear the neighbors unless I choose to. So, about 1/4 mile between us at a minimum. (Am currently working on purchasing property across the road from our home to avoid ever having neighbors.)

I think people forget just how incredibly massive this country is.

DiabloD3• 10 years ago

Rent does not build wealth. Rent is the act of transferring wealth from the poor to the rich. Rent is, essentially, theft from society itself, it leaves everyone poorer when most people rent.

Rent in America today is identical to the serfs of old.

The post-WW2 thing the Government did with getting everyone mortgages so they would be home owners that caused the eventual economic collapse 10 years ago? They had the right idea, but the wrong execution.

Instead of making everyone homeowners, make everyone fiscally responsible so that getting a mortgage wouldn't be hard for them in the first place.

I don't entirely blame them though: building Freddy and Fannie was magnitudes easier than fixing the broken parts of American society and (lack of) education.

This is one of the large reasons why I'm supporting Bernie, he actually has spoken in depth about how to fix the underlying bullshit that keeps so many Americans renters instead of being homeowners and building their personal wealth.

It has been proven in at least one study that financial stress causes a measurable drop in IQ: literally, being poor makes you stupid. We need less stupid people, to put it frankly.

Edit: Don't downvote. Reply with your counter-viewpoint. HN isn't Reddit.

Edit 2: Bernie said it better than me: http://imgur.com/gallery/DaHIv

tempestn4• 10 years ago

I actually think you are right that the real challenge is spreading fiscal responsibility. However, it doesn't follow that everyone should own a home, or that rent is somehow evil.

If you rent, you pay rent. If you own, you pay interest on a loan[1] and maintenance costs. There is also a forced savings component in the form of mortgage principle payments. There are also less tangible benefits to both renting and owning. Renting is entirely flexible and allows you to relocate with ease. Owning gives more flexibility in customizing your home. Different people will ascribe different values to these benefits. Especially for someone who does not yet know where they want to settle long term, renting might be very attractive.

Because of the forced savings aspect of owning, renting will almost always be cheaper on a cash-flow basis. Therefore, if a person earns a middle class income[2] and is fiscally responsible, it provides an opportunity to put money into a diversified, low-cost investment portfolio. Eventually, that portfolio should grow to the point where purchasing a modest home is possible. What's more, it will hopefully start a habit that will continue through life, and eventually provide for a comfortable retirement.

So again, I absolutely agree with you that finding a way to better teach smart personal finance is critical. I just don't see at all how it follows that everyone must own a home (immediately).

[1] Or if you own outright, you pay the opportunity cost on funds that could be invested elsewhere.

[2] Obviously at a certain level of poverty, there simply is no additional money to put away, even after any discretionary spending is cut. That isn't an issue of affordability of homes though; it's an issue of poverty, which needs to be tackled directly.

pliny• 10 years ago

Renting gives people who already have a home incentive to build new housing.

It also allows you to live somewhere without (a) tying up all my capital + credit in some super-undiversified equity[1] and (b) buying a massive amount of downside risk on the local property market.

The comparison with serfs is, I think, an example of the worst argument in the world[2], paying someone for use of their property seems fine to me on the face of it, and yes it's something serfs used to do, but the things we don't like about serfdom were the violent coercion and the idea that the nobility got their property illegitimately, on the other hand if I built an apartment building and then I rent the apartments to people neither of the elements that cause me to hate serfdom exist here.

Instead of making everyone homeowners, make everyone fiscally responsible so that getting a mortgage wouldn't be hard for them in the first place.
I don't entirely blame them though: building Freddy and Fannie was magnitudes easier than fixing the broken parts of American society and (lack of) education.

Well, at least you don't blame them...

Saying something like "make everyone fiscally responsible" is not actionable, but offering people better terms on mortgages is actionable.

People also have risk preferences that just don't line up owning their own home, like wanting to live in property markets where they can't afford a home (like NY or SF), and no amount of fiscal responsibility will change that for most of these people, you either need to change their preferences (by making these place less attractive) or dramatically increase the supply of housing.

[1] Even worse, for a lot of people the value of their home is somewhat correlated with their income, like if the local property market tanks it's more likely that the local job market suffered a downturn also, so that it's more likely that they've also lost their jobs, so now you might have to default on a mortgage, and also you have no income.

[2] http://squid314.livejournal.com/323694.html

gozur882• 10 years ago

Rent does not build wealth. Rent is the act of transferring wealth from the poor to the rich.

That's not a general rule. It really depends on rents, interest rates, and the cost to purchase housing. In a functioning market rents bring in just a tiny bit more than the monthly mortgage payment, including taxes and fees. There have been times in my area where you came out ahead renting, and times when you came out ahead owning.

The government makes a terrible mistake when it pushes home ownership for people who cant afford it. In the US home ownership is a characteristic of the middle class, not a cause. It's as much consumption as it is savings.

majewsky2• 10 years ago

Rent is, essentially, theft from society itself, it leaves everyone poorer when most people rent.

Not necessarily. It depends on whom you're giving the money to. If it's a profit-oriented company or investor or the like, then I'd tend to agree with you.

On the other hand, I'm renting my apartment from a housing cooperative that I'm also a member of. The cooperative releases a yearly financial report detailing that rents are for the most part used for maintaining the buildings owned by the cooperative, and to buy new land and construct new buildings.

I consider that model very sensible; it allows me to delegate all tasks relating to the maintenance of my apartment to people who are more competent in this area, and who can negotiate better rates with craftspeople.

It also gives me much of the social security that people usually associate with self-owned apartments or buildings since my lease contract literally states that the cooperative is not allowed to throw me out of the apartment (given that I obey the rules of the house, of course). But at the same time, I have the flexibility to easily move to a different apartment somewhere else in the city (or somewhere else entirely) without having to deal with selling the apartment and buying a new one.

SeanDav• 10 years ago

There are many good reasons to rent a house, just as there are many good reasons to own a house. However, there is no God-given right to own a house. If you want to own your own house, work hard, save for it, make a plan, have patience.

forgetsusername2• 10 years ago

so that getting a mortgage wouldn't be hard for them in the first place.

So, you think that paying massive amounts of interest to financial institutions, over decades, all while being tied to a specific physical location and having a disproportionate amount of your wealth tied up in a single asset class is "fiscally responsible"?

We need less stupid people, to put it frankly.

The word you're looking for is "fewer".

he actually has spoken in depth about how to fix the underlying bullshit that keeps so many Americans renters

I appreciate many of his views, but if his platform has anything to do with "turn renters into owners" then it demonstrates his lack of economic wisdom, and will be part of the reason he won't get elected.

hammock• 10 years ago

Rent in America today is identical to the serfs of old. Instead ... make everyone fiscally responsible so that getting a mortgage wouldn't be hard for them in the first place.

Replace rent with debt is your solution? Mortgages (banks) are the new feudal lords

logfromblammo5• 10 years ago

They probably did the wrong thing with mortgages-for-all. They set up Fannie Mae and Freddie Mac as mortgage clearing houses that repackaged the loans into investments. So the net effect made all owners with a mortgage functionally equivalent to renters with a landlord, but with fewer obligations on the financiers. If you have a mortgage, you effectively have an absentee landlord with an agent on Wall Street, who doesn't even know your name.

They probably should have made mortgages secured by land property illegal to offer, except by credit unions serving a geographical region. That would severely limit housing options in less developed regions, but at least the money invested in housing there would stay there instead of getting siphoned off to international finance centers. If your mortgage payment goes to all your neighbors, you can get it back from them every month by offering them local goods and services. If it goes to a holding company, there's nothing you have to offer that it wants, other than cash. So that cash has to come from whatever it is that your region can export.

If the only thing Appalachia has for export is coal and whiskey, then everyone with a non-locally-owned mortgage is dependent on those industries to make payments.

vacri2• 10 years ago

As an Australian who has rented all his life, you live knowing that the rug can be pulled from under you at any point. I think in my state that the notification period to 'get out!' is 90 days, but it may be shorter. Owning your own home also means you can do what you like with it, have what pets you like, so on and so forth. The equation is more than comparing dollars out.

jensen1233• 10 years ago

Why not rent a flat instead?

Flats usually suck because you have noise from neighbors. Of course, you can build flats with better sound insulation, but that obviously costs more, although I'm not sure how much more.

okc6• 10 years ago

When a section of society is forced to rent off a richer section of society, then you have a self perpetuating financial inequality - a poverty trap. For people in poverty, house ownership isn't a financial option. Giving poorer people the option to own or rent, gives people empowerment over their future.

drone• 10 years ago

A lot of the poor, rural, families these low-cost homes are targeted at are living on land owned by the family for generations. They often do small-scale farming or large-scale gardening (depending on your definition) and hunting/gathering on the property for food.

In many cases, there will be multiple generations of the family living in separate houses on the same property. At least, these things were all true when I lived in family property in West Virginia in the 80's. We had four houses on about 200 acres in a valley, nearly an acre of garden, and other relatives would regularly stop by from nearby valleys on hunting trips, sharing what they managed to catch for what we managed to grow.

jandrese4• 10 years ago

My experience is that owning is cheaper than renting in the long run. It makes sense in the broad context because when you rent you still have to cover all of the costs, but they just get hidden in your monthly rent, and additionally you need to pay the landlord--an expense you don't have with ownership. There is a modest benefit in spreading out the risk as well, if you have a major maintenance expense you won't be responsible for the cost up front, however homeowners can purchase insurance that does the same thing (but are usually a pretty bad deal IMHO).

There are some efficiencies to renting. The maintenance can be done by dedicated staff at negotiated rates instead of having to hire outside work. But the efficiencies don't really appear until you're living in a massive complex with lots of other customers to spread the cost around.

When I bought my first house my $1700/month rent for a 800 square foot apartment became a $1000/month mortgage for a 1400 square foot townhouse in a better part of town. And unlike renting I would eventually run out of mortgage after 30 years and have a big asset in my name, one that is likely to appreciate in value over the long term.

In the long term renting is a pretty bad deal for everybody but the landlord.

rplnt• 10 years ago

Yeah, there's no way I'm clicking on this clickbait title.

adrianN2• 10 years ago

I would be scared to buy a house that uses non-standard construction methods. Not because I don't trust the plans, but because even with cookie cutter houses, the construction people mess up a lot of things and you really have to pay an additional person to check the construction. Trying to get construction companies to build a house using novel techniques and do it without major errors is, I imagine, quite an undertaking.

keithpeter• 10 years ago

UK: we had big problems with 'system build' council housing in the UK in 1960s and early 1970s. Google 'Bison' and 'Ronan Point' for background.

I'd hope that we have (all) learned a bit about pre-manufactured sections and assembly since then and perhaps pre-manufactured units with quality control/JIT manufacturing techniques would be better than the current bricks on site based construction.

UK: the problem would be the land to build on anywhere near population centres and utilities by the way...

derefr• 10 years ago

Unless, perhaps, one of the advantages in these alternative construction techniques is that they're more construction-error-tolerant. That's, for example, one of the key advantages in suspension bridges: any individual support cable can be installed in a stupid out-of-tolerance way, because load is just redirected evenly to all the other cables. Usually, in fact, "cheaper to build" almost always means "because the materials and techniques used mean that even a sloppy construction process will still produce good results."

petecox2• 10 years ago

Well it sucks to be an early adopter but the students are currently on 20Kv20.

Hopefully after 20 iterations the designs are getting better each time, incorporating real world feedback from the people who built the previous ones.

Perhaps these 'novel techniques' over time might be adopted by industry.

flexie• 10 years ago

They say it's nicer than my house, but apart from the price I don't see anything nice about it. Honestly it looks really bad.

$20,000 is impressively cheap, but like with the iphone making smartphones popular or the Tesla making electric cars popular, I think smartly built houses aren't gonna take off until their design and specs are top notch.

yitchelle2• 10 years ago

20K? Would love to see the itemised material costs, labour cost, adminstration fees for building this. Also have a projected on-going maintenance costs as well.

At the end of the day, the aim of this house is "a home that someone living below the poverty line can afford."

Already__Taken• 10 years ago

The article pretty clearly states it's just material costs.

yitchelle2• 10 years ago

My point is what is the real cost of living in this house, can the folks living under the poverty live really afford to live in it?

jonnycowboy• 10 years ago

14K for materials, 6K for labour was the goal.

ACow_Adonis• 10 years ago

It's kind of hard for me to tell whether the house is nicer than mine when there's so little detail in the article on the actual house.

Look, i'm more than supportive of innovative design and doing things cheaply, but for an article that was heavy on "the house is so cheap", and "its built kinda more like a airplane", and "it uses all this innovative stuff", there's a startling dearth of information.

Sqm, plans, insulation, facilities, utilities, safety? Is it a house I'd want to live in or build, or is it a $20,000 shed with furniture? I'm not being snarky, I really want to know!

vacri2• 10 years ago

Same here - annoying to see the same 'corner angle' photography tricks that real estate agents use to hide shortcomings.

mathgladiator2• 10 years ago

I want to know too; having somewhat recently bought a house, and I've started to upgrade it. I can see $20,000 going really fast for simple things.

morganvachon2• 10 years ago

Indeed, I bought a "handyman's delight" (i.e. money pit) for $43k just outside Atlanta during the recession in 2009, and to get it to roughly the same condition as my neighbor's house, I'd have to spend another $40k. It's mostly cosmetic work that it needs, but there are some structural and functional issues that need to be addressed as well. We're still debating whether we should hold onto it and fix it up (it currently appraises for $80k with the few improvements we've done, mostly due to the location) or just sell it for what we owe and buy a better house.

st3v3r5• 10 years ago

This is starting from scratch, though. You have existing stuff that you have to work within.

bsbechtel2• 10 years ago

Agreed. I don't see anything particularly innovative or unique about this house. Manufactured homes cost roughly the same, and are roughly the same size and quality. There's not a whole lot of info really detailing what is so different or great about this home.

viperscape• 10 years ago

Manufactured homes in the US are typically high quality now because of the national safety standards it must meet for each state, in addition to holding up to things like high winds, heavy rains, tremors.

jleahy• 10 years ago

Plus they explicitly said that it's going to cost more than $20,000...

AnimalMuppet• 10 years ago

It's more than $20,000 if you have someone build it for you. If you build it yourself, it's $14,000 (plus your time and labor).

One thing they didn't mention: land cost.

marincounty• 10 years ago

They left out current building codes. I have a general contractor's licence. To build anything involves so many rules/codes it's rediculious.

Every year the building department in your town/city usually includes the latest codes, and prohibits so many things. It all sounds great until you are paying someone to build something. The various building code manuals take up at least two feet of space on my shelf.

Where I live, I couldn't build a cabin with wood stove. It would need a electric plug every 6'. I couldn't even use logs to build it without approved man made insulation. And forget the wood stove. They are illegial.

toomanybeersies2• 10 years ago

You really have to wonder how necessary some of these codes are.

Houses already last 60 or 70 years, which is plenty, by the time they're at a point where they need rebuilding they're hopelessly outdated.

I was helping my father with building a house over Christmas, some of the regulations are ridiculous, we had to build a massive retaining wall with 200 mm posts going 1.5 m down, just because the earth it was retaining could theoretically have a car drive down it at some point.

You have to seal the concrete ledge that bricks sit on with bitumen. It used to be that you had to seal it 50% of the width, but they've just changed it so that it has to be the full width of the ledge. How much difference does it really make?

You can no longer use nails for fastening down corrugated iron roofs, you have to use special screws. People have been nailing corrugated iron roofs down for literally hundreds of years without issue.

dwiel2• 10 years ago

I tried to build a nice, cheap small house and ran into these exact same regulations. Almost all of the regulations we hit were from the 'International Building Code' which covers a large part of the US. I'd say building a to code house here costs at least $50k - $60k. This is just bare minimum meet the code. To add to your list:

  - composting toilets are allowed, but you still need a sewer hookup available, just in case
  - heating had to be automatic (thermostat + gas/electric), wood stove/insert only is illegal
  - outlets every 6' and even more in the kitchen
  - stairs cant be steep, even to lofted areas and so take up more space, more $
  - minimum square foot requirements

We had a nice building department that helped us work around some of the codes, but even that took a lot of time (money).

Where we were and what we were trying to do would have cost significantly less if we were allowed to use composting toilets [1] and grey water and avoid sewer. Many states are coming around to grey water laws, but as of now I don't think any allow no sewer/septic, even if you don't have anything draining into them. You have to have them for 'backup'

[1] http://www.sun-mar.com/

Loughla2• 10 years ago

Or what's the difference between this and a manufactured trailer? Those are very cheap and mobile, even.

It seems like just new marketing for old, low-income housing.

I wish someone would address that, at the root, this move to micro-housing is focused always on cost, and lack of available funds for young working people.

sageabilly2• 10 years ago

Lifespan of a mobile home is estimated at 30-55 years depending on area and on how much upkeep the owner does. There's also a huge stigma around living in a mobile home, and serious logistics involved in hauling the mobile home to its final destination as it has to be delivered in one or two pieces on a long flatbed trailer.

Shivetya• 10 years ago

The numbers are seemingly tossed about without all those pieces you need to add it up. It reads more feel good we got an investment to sell you than actual talk from a home builder. The costs completely ignores the costs of land and ongoing taxes as well. Besides issues with neighbors they are likely going to need to get all new zoning as this price point won't support larger lots.

I am all for good priced construction, groups like Habitat for Humanity would benefit too, but to ignore known savings and counter with "jobs" and such without quantifying it all comes across as a late night infomercial

rubidium3• 10 years ago

Here's what looks like more info from the designers.

It's a really cool program. Each year they come up with a house design and BUILD it for <$20K.

http://www.ruralstudio.org/projects/20k-v8-daves-house

search the projects tab to see all of them back to 2005

strgrd• 10 years ago

Where can I buy one though?

jernfrost• 10 years ago

Probably nice for the US, but in much of the rest of the world, it is the price of land which dominate the price. Any system that aims to reduce house prices really need to deal with limited supply of land to build on.

Even on Iceland which has vast amounts of space and tiny population, house prices are high because the areas where people want to live is in high demand.

Now if you could just build your house at any arbitrary location on Iceland then that would not be a problem. But people needs schools for children, hospitals, jobs etc. That limits the options.

The US has fairly cheap land because it is flat, it is easy to build infrastructure and there are a lot of roads everywhere which you can connect to. The city planning also space out things a lot leaving a lot of land for building.

raggiskula• 10 years ago

Icelander here, I'm more concerned how well does this house work in icelandic conditions? Does it handle earthquakes well? What about regular storms? Being wet for months end? Constant freezing and thawing? Can you put it in an active volcano? Does if float on magma? There are lot of questions here!

luisramalho• 10 years ago

Does it float on magma?

Do houses in Iceland really do that?

mrweasel• 10 years ago

While I'm not really concerned about it, I doubt that it would live up to Danish building regulations. I'm mean we pressure test our homes... then install ventilation systems because living in a house that can parse the pressure test would be unhealthy. We then continue to get headaches and stuffed noses because the ventilation systems aren't any good either.

Anyway, it doesn't look like this house would fit the required amount of isolation.

efaref• 10 years ago

Indeed. My house is 20 minutes away from the centre of one of the financial capitals of the world. You couldn't buy enough land to build one of those houses on for half a million. You wouldn't get planning permission anyway, and I doubt it meets the local building regulations.

thruflo22• 10 years ago

The founder of WikiHouse (open source housing system, similar build cost) wrote a book on the topic: https://dl.dropboxusercontent.com/u/1850356/ARighttoBuild_CC...

reustle• 10 years ago

The nice thing about a cheaper house is you then have more money to spend on a better plot of land.

petecox2• 10 years ago

I see this as an opportunity for existing land owners to replace a house.

Every summer, somewhere in Australia, we have whole rural communities razed by bushfire. Rebuilding is costly and time consuming and there's a threat that fire may return within decades.

Constructing something that is quick and cheap and with low insurance premiums in case of natural disaster may benefit communities where the expected lifespan of a dwelling may only be 40 years.

yusufp• 10 years ago

I think the idea of approaching things like this from first principles is a great way to create change.

Everything we take for granted could potentially be made in a much better way for a lower price. It will be interesting to see applications of this thinking in other areas.

kriro• 10 years ago

It doesn't look very sturdy, which seems to be a wrong assumption on my part [1], but 20k for a decent house is nice...assuming you own the land already. For comparison, how much do the Amish-houses cost (materials) and how long do they take to build them? I only know them from movies but they seem like low-cost/quickbuild type houses, too.

Edit: Building instructions for this could be a good application for a VR-based tutorial :)

[1]: "They're built more like airplanes than houses, which allows us to have them far exceed structural requirements. ... We're using material much more efficiently. But the problem is your local code official doesn't understand that. They look at the documents, and the house is immediately denied a permit simply because the code officials didn't understand it."

huuu• 10 years ago

Material cost of houses is already 'cheap'.

But you also need a place to build it. In The Netherlands ground prices range from $100 - $500 per m².

Then you need sewage, electricity, gas, labor, and so on. I don't think you could make those much cheaper.

rubidium3• 10 years ago

Yes, but this is the state of Georgia in the United States. You could buy a nice sized lot plenty big enough for this house in a poor part of the city for $0.5-3K.

jdc• 10 years ago

Looks like a PR piece.

http://paulgraham.com/submarine.html

https://www.google.com/search?hl=en&q=Rural%20Studio%27s%202...

http://www.prweb.com/releases/ruralstudiosept15/artfarmseren...

rloc• 10 years ago

It worked, the story is ranked 3 right now on HN.

jensen1233• 10 years ago

I think it's really impressive that they were able to build a house like that for only 20K.

The article mentions zoning laws and size requirements, which I found odd. Do many places not allow houses below a certain size to be built?

NoGravitas• 10 years ago

It's extremely common in the US.

jensen1233• 10 years ago

Huh, that doesn't make any sense to me. Smaller houses would make cities more walkable/livable and thus be better for people's health and the environment.

Do people want those kinds of laws in order to protect their "investment"? I mean, I guess maybe your house will be worth more if all the other houses nearby are large and thus expensive?

Of course, now in the digital age, I guess such laws seem sillier than they did earlier. You no longer need a huge amount of books, music records, train set, pinball machines, billiard table etc., since you can fit all those things in a small computer.

chvid• 10 years ago

Reads too much like an advertisement piece.

Building a 60 m2 wooden shack have always been cheap compared to a proper house.

Much of the cost of a house lies in the cost of land and the cost of connecting it to water and electricity.

These costs are high because of scarcity and the policies of cities. Policies that ensures that values of houses do not fall and people do not go under water in debt, that areas are filled with proper gentry, that there are nice open spaces, nature, farmland etc.

Even if you could build a house for 0 dollars many places would still have an affordability issue.

ben_bai• 10 years ago

I like the concept of small and cheap houses, unfortunately in my country, Europe/Germany this would not qualify as a house built to the newest regulations. It's just a shack.

evthewolf• 10 years ago

If you consider the cost of land (in Ireland) you'll still spend a fortune and end up with a pretty small place. For one / two this could work, imagine having a family in there!

lukasm• 10 years ago

There was a company in Poland that was building houses like that - they went bust. The main problem is cultural. People look at it and see a shed and they want a "proper" house. "Can I retire here?" "Is it an investment?". What is more, there is a segway syndrome (you like a dork). You will be that weird guy that lives in this weird house. And there is a liquidity problem.

rubidium3• 10 years ago

This house is not for you. This house is for poor people who live in rural or urban decaying homes. Their roofs leak and collapse, their insulation in non-existent, their plumbing doesn't work. This is a big issue, and having worked with a number of situations like this, being able to get someone a new house for $20K that functions would be huge.

$20K (or even $30K) for a functional, well-designed, "tornado-resistant" house would be a big help to many in the rural and urban south.

dsfyu404ed• 10 years ago

Tornado resistance can be accomplished with a trailer home, some design tweaks, a big concrete pad and a lot of big lag bolts.

structural interior walls that act similar to the bulkheads of a ship) to prevent the structure from deforming and folding over/apart

vox_mollis• 10 years ago

This house is not for you. This house is for poor people

Not everybody who earns a good income is required to spend it on pointless status-signaling. Some of us enjoy inexpensive, low-footprint, low-consumption living.

delbel• 10 years ago

Roof looks good to me. If its the same delta rib panels I installed, I had a choice of a 83 year warranty or a 100 year warranty. Snow load angle looks good also. They are off the ground and the roof extends out a bit so that the water stays off the side. I think they are built fine.

garrettgrimsley• 10 years ago

They were referring to poor people's homes.

jonstewart2• 10 years ago

The article doesn't mention this explicitly, but it sure seems as though this tiny house project is geared towards Appalachia and the rural South. Appalachia is generally the mountainous parts of Pennsylvania, West Virginia, Virginia, Kentucky, Tennessee, and North Carolina (maybe some parts of Ohio, too). It has its own culture and dialect. It is also the poorest region of the United States; Appalachia is a huge component of why the US is not like other first world countries.

In Appalachia, it is not uncommon for desperately poor families to live in shacks or horribly broken down mobile homes, on land that's been passed down for generations, sometimes predating US independence. So, this house helps to solve the safe, modern, cheap problem for housing in Appalachia. Also note that one of their goals is making it sustainable for contractors to build and providing lots of instructions--that's to help provide jobs. There aren't a lot of jobs in Appalachia.

So, this is why the house is not an apartment building. It's not built for Germany.

jonstewart2• 10 years ago

It even has a porch with rocking chairs. That is a clue.

sageabilly2• 10 years ago

My first thought when reading the article and seeing the pictures is that there's no way this design (as depicted) would work in Appalachia without enclosing and insulating around the bottom of the house. Otherwise, your pipes would freeze and the house would be way, way too cold during the winter. I was also disappointed that the article didn't go into the R-value of the house itself as that's going to be extremely important with regards to where the home could be built. I'm assuming it's probably pretty good, given that it's new construction materials, but I would not want to weather out an Appalachian winter in one unless it had been properly designed to withstand a harsh winter.

logfromblammo5• 10 years ago

Auburn University is in Alabama. These houses are designed for the rural South. You don't have to dig down too far to reach the frost heave line (14" or less). The primary climate concerns are therefore summer cooling, storm drainage, and tornadoes. When there is a freeze warning, people let their faucets drip.

These designs could be used in Tennessee and North Carolina, but that's as far north as I'd be willing to try them.

But then again, it's a lot easier to dig deep holes for piers than a full basement, and you could insulate the underside of the house more thoroughly than is usually done.

sotojuan• 10 years ago

Appalachia also is what I would call the "center" of traditional American folk culture. It's no mistake that a big portion of the artists featured in the Anthology of American Folk Music come from there. Very fascinating area.

brianbreslin• 10 years ago

Slightly off topic, but what would a modern looking pre-fab house cost? I've always wanted to buy a piece of land somewhere rural and have a house built so I can take mini getaway vacations with my dog.

gravypod• 10 years ago

I have always wanted to toy with this idea. I'd love to save up a nice chunk of change and build something like this.

I'd like a small house out in the middle of the country.

A bathroom with shower, a kitchen with a stove, and a single living space.

Solar panels, backup batteries, well with pump and filter, and a internet hookup (satellite/landline).

I was hoping to find that this article would talk about the prospects of building something like that, but unfortunately this article is not exactly what is in my "dream".

sageikosa• 10 years ago

All other things aside, the cost of buying a home in densely populated region with situational amenities such as subsidized schools, hospitals, fire stations, zoned shopping districts, reliable power, water, sewer and communication network access is also largely about the real estate market in the area.

protomyth• 10 years ago

I would love to see a bit more of these. I do wonder if they have a version with insulation that would work in a northern climate. This would be a great project for the reservation I work on simply because it is impossible to get a home loan on the reservation. It would be interesting to see mass production.

fweespeech• 10 years ago

http://www.artsatl.com/2016/01/serenbe-rural-studio-artist-r...

And $20,000 is still an aspiration. These two cottages and the deck between them cost $135,000 to build. Smith is hoping that if a contractor understands process, he can bring it in more cheaply. Smith will be able to test that hypothesis: Nygren is invested in the collaboration and the concept. He intends to build more cottages and will be raising funds to do so. He says,

This title is misleading. It is $67,500 / house and the costs are on par with new construction for a similar structure. :/

beat2• 10 years ago

People have been building homes cheaper than that for a long time now. What makes this different?

When I was a kid, I spent a lot of time on my grandfather's farm in southern Kentucky. I didn't realize it, but it was rural poverty. He didn't have electricity or running water (this was the early 1970s). But at least it was a wood house, with glass windows and doors and a decent fireplace and a coal-burning stove.

Back in the far back of the same property, up a dirt trail in the woods, an old black man lived alone in a shack. One room, walls made out of tar paper and corrugated steel. That's a house that can survive in that kind of terrain, and it cost a lot less than $20k. (Interestingly, my father treated that old man with great respect and deference. My father didn't respect anyone, so it boggled me, even as a small child.)

Around the world, entire neighborhoods of "shantytowns" arise around cities, made from the discarded junk of richer people. Shelter is shelter. People build it because they can't make a living wage and pay someone else to build a house for them...

pbreit• 10 years ago

The unfortunate thing about "modern prefab" is that it is so dang expensive when the minimalist designs with builds in a controlled environment should be inexpensive.

dharma1• 10 years ago

Not of personal use for me, but they should just put the plans on github or even a blog. Couldn't find any detail on the site (http://www.ruralstudio.org/)

pkaye• 10 years ago

So the location is in a small town somewhere so likely not many job around. That means either you are okay with a homestead type of living or are rich enough to buy this as a second home.

IkmoIkmo• 10 years ago

The $20k is an aspiration (read, total bs atm), the pictures you're seeing are for a house that cost $135k.

http://www.artsatl.com/2016/01/serenbe-rural-studio-artist-r...

It must be mentioned that houses carry a huge location premium, everyone knows this. You can buy a big beautiful home in the middle of nowhere for the cost of a studio in the middle of NY or SF.

Living isn't all that expensive, living close to where jobs are, or close to the 'heart' of a vibrant local culture, that's expensive, and it looks like the actual cost of building isn't the most significant part of that equation. Land is expensive, so you need to go up, and building up and space-efficiently (i.e. reasonably tall buildings with smart, space efficient units) is where a lot of these 'open-source plans for cheap rural houses with materials from Home Depot' completely do not apply.

It's a bit like building your own PC. Yeah you can build a much more powerful machine at a cheaper rate than a Macbook... but you're forgoing all kinds of factors like mobility which are extremely essential to many of today's consumers. Similarly, you can build a cheap rural home and completely forgo on extremely essential factors like proximity to jobs, culture and infrastructure.

It's great for some people, but not for most.

tejohnso• 10 years ago

"pictures you're seeing are for a house that cost $135k"

yet

"Smith says they have priced materials for these homes, each under 550 square feet, at Home Depot, at about $13,000."

So it would be nice if they had detailed the real costs. As indicated, the material cost is relatively insignificant.

up_and_up• 10 years ago

They said the actual cost for building the structure is $67,000. Not sure if that includes items like well and septic, etc which are 1000's of dollars.

thesz• 10 years ago

After surveying the house designs, I can't help but share this: http://inhabitat.com/magical-dome-house-in-remote-thailand-c...

$8000 for 3 room house with small pool, which is so fun that it looks like toy.

apurvadave• 10 years ago

It seems like there are lot of comments about how this kind of house wouldn't work (yes, this won't work in downtown NYC). But it also seems like there are lots of communities - poor, displaced - that would benefit massively. I'm a big fan of projects like this, even if they only serve to push the innovation of affordable housing further.

robotresearcher• 10 years ago

But it cost nearly 7X that amount. From another article about the same property:

And $20,000 is still an aspiration. These two cottages and the deck between them cost $135,000 to build.

http://www.artsatl.com/2016/01/serenbe-rural-studio-artist-r...

donatj• 10 years ago

It's not nicer than mine. Maybe on dollar to metric niceness, but it's much smaller and offers fewer amenities.

no_wave• 10 years ago

Terrible article... no mention of plumbing, toilets, heating, ductwork, or electricity, which are the main factors that dictate how normal houses are designed (which is why materials like cob aren't the game-changers that their devoted proponents claim).

listic• 10 years ago

Historical weather records in the vicinity: http://en.tutiempo.net/climate/2015/ws-722286.html

badthingfactory• 10 years ago

"This House Costs Just $20,000—But It’s Nicer Than Yours"

later:

"In Serenbe, their first problem was a zoning issue: The houses were too small."

It sounds like this house is probably not nicer than mine. Titles like this really annoy me for some reason.

Raticide• 10 years ago

Around where I live it's the land that costs you the most, so it doesn't really matter what the house costs. Hell, some people buy a property and give away the building for free to anyone that's willing to move it off their land.

A house that costs $20k

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