A house that costs $20k
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A house that costs $20k
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Re: A house that costs $20k
#2It'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.
Re: A house that costs $20k
#3I 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.
Re: A house that costs $20k
#4Excluding all costs apart from material. Yeah, it doesn't cost 20k.
Re: A house that costs $20k
#5Aesthetically 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].
Re: A house that costs $20k
#6Excluding all costs apart from material. Yeah, it doesn't cost 20k.
> 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.
Re: A house that costs $20k
#7> 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.
Re: A house that costs $20k
#8It'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.
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.
Re: A house that costs $20k
#9> 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.
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.
Re: A house that costs $20k
#10> 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.
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.)