Tiny Is the New Big: The Next Wave of Space-Defying, Affordable Homes

modular-apt
modular-apt

With home and rental prices continuing to climb to wallet-bursting record highs in many major cities, renters and aspiring homeowners have plenty of reasons to despair. But wait! There’s a new wave of more affordable homes that are beginning to change all the rules—and shatter long-held definitions of that fuzzy phrase “livable space.” From upgraded Mongolian-style yurts to microapartments that make old-school studios seem spacious, these places are bending form and function into innovative directions to meet the new realties of U.S. housing.

“Affordable housing is becoming a bigger issue, especially in cities,” says urban and regional planning professor Robert Silverman of the State University of New York at Buffalo. “These are creative solutions that have come up to address this pent-up demand for entry-level housing” for first-time homeowners.

Most of these creative options are all about living large while keeping things small.

Microapartments: Extreme downsizing

Could you squeeze into this micro-apartment? They're going up in expensive cities across the country.
Could you squeeze into this micro-apartment? They're going up in expensive cities across the country.

If you can wedge yourself and all your worldly goods into a New York microapartment, you could save 15% or more of the price you’d shell out for a studio apartment in the same neighborhood.

Microapartments are cropping up in major metropolises where there aren’t enough homes to meet demand. And, as you’d expect, the units are typically substantially cheaper than more spacious (and traditional) studios. But not always.

After some delays and false starts, tenants at Manhattan’s first microapartments, developed the Monadnock Development firm, will move in to their brand-new, sardine-scale homes in a few months. Some will be paying just $950 a month, after winning a lottery last year for one of the 14 units the firm designated “affordable.” But the rest of the 55 units, fully furnished, will run anywhere from $2,446 to $2,907 a month, utilities and housekeeping included, for those willing to squeeze into a 250- to 365-square-foot space in the heart of Manhattan.

The median square footage of a newly completed rental in a multifamily building was 1,043 square feet in 2013, according to the U.S. Census Bureau.

But if these new Lilliputian living quarters sound pricey, you have to factor in the luxe amenities. The minuscule apartments have specially made, convertible furniture to help tenants make the most of their limited space. Plus, tenants get extras such as Wi-Fi and weekly housekeeping service. And Ollie, the firm providing the furnishings and perks, also has microapartments and co-living spaces in Los Angeles, Pittsburgh, Jersey City, NJ, and elsewhere in the works. It organizes communal activities such as whitewater rafting trips, potluck dinners, and happy hours for tenants.

“In exchange for trading space, you get other amenities and services that matter more,” says Chris Bledsoe, co-founder of Ollie parent company Stage 3 Properties.

An influx of these units could lower housing costs across the city, says Jessica Yager, executive director of New York University’s Furman Center for Real Estate and Urban Policy. More housing stock, after all, drives prices down across the market.

Co-living spaces: A step up from Craigslist

Coliving spaces are popping up in expensive cities across the nation.
Coliving spaces are popping up in expensive cities across the nation.

Co-living is another trend focusing on adding community-based amenities to urban rentals, but with some classy group living thrown in for good measure—sort of a cross between ’90s TV staples “The Real World” and “Friends.”

Those willing to share their living space (and lives) can pay, on average, up to 25% less (when housecleaning services, utilities, and kitchen and bathroom supplies are added in) than comparable market prices at the well-appointed properties in hipster Brooklyn run by Common, a supplier of upscale “community driven housing.”

“This is not cheaper than going on Craigslist and getting your own roommates,” says Brad Hargreaves, CEO of Common, which screens tenants before allowing them to move in. But “community is really a central part of what we offer.”

That includes weekend art workshops, Sunday potluck dinners, plenty of communal spaces, and a social messaging app, which makes it easy for residents to post that they’re watching a movie and anyone in the building is welcome to join. “Weekend at Bernie’s,” anyone?

Common tenants can sign up for three-, six-, and 12-month leases to live in the furnished 1,000- to 2,000-square-foot suites. Bedrooms range from $1,100 to $2,500. The arrangement is popular with young professionals moving to the city on short notice, Hargreaves says.

Other major co-living communities include OpenDoor in San Francisco, the Tomorrow Building in Chattanooga, TN, and Krash, which has spaces in Boston, New York City, and Washington, DC.

It’s a giant step up from the typical postcollegiate group living, says Susan Wachter, a real estate and finance professor at the Wharton School at the University of Pennsylvania.

“It’s a better option than living with your parents,” Wachter says. And “it gives you a launch place to be in the city to take advantage of higher-wage jobs.”

Tiny homes: How small can you go?

Obsessed with tiny homes? This Twentynine Palms, CA house could be yours for $45,000.
Obsessed with tiny homes? This Twentynine Palms, CA house could be yours for $45,000.

When her three grown children flew the nest, Elaine Walker, now 58, decided to downsize. She traded in her four-bedroom, 2,200-square-foot home in Mont Vernon, NH, for a 117-square-foot home on wheels back in 2008 after reading a magazine article on the tiny-home trend and then seeing it again on “The Oprah Winfrey Show.”

Her new residence was completed in 2010, for a grand total of just $42,000. She’s lived in it full time since the beginning of the year in a RV park in Palmetto, FL.

“When it’s that small, money isn’t really an issue, so I was able to customize it the way I wanted,” says Walker, who works from her wee home for a financial services firm.

Getting rid of her costly mortgage, property tax, and energy bills will also set her up nicely in retirement, she says. The only downside? “It doesn’t accommodate having guests over very well,” she says.

The tiny-home movement continues its seemingly uninterrupted march toward world domination, evidenced in part by the multitude of reality TV shows devoted to the pint-size structures. People in all parts of the U.S. are ditching their comparatively bloated homes for abodes that measure 400 square feet or less. Call it an urge to purge. Or a desire to simplify. Or maybe just a way to spend way less on a house and to never again have to search endlessly for your car keys.

In comparison, the median size of a newly built single-family home was 2,446 square feet in the last quarter of 2015, according to the National Association of Home Builders.

“The tiny-home movement has been a low hum since the turn of the century. But it really kicked in with the Great Recession,” says geography and planning professor Mark Stemen, who taught a course on tiny homes at California State University in Chico last fall.

In Chico, about an hour and a half from Sacramento, tiny-home enthusiasts can spend anywhere from $100 to $500 a square foot, depending on how fancy they want their little houses to be, he says. He’s had students who built them for as little as $5,000 on their parents’ or friends’ property.

“More and more people [are] starting [to look] at this as a default option they could actually afford or would solve some of their financial problems,” Stemen says.

The container myth: They’re actually more expensive

Container homes, like this Union Pier, MI stunner, typically don't come cheap.
Container homes, like this Union Pier, MI stunner, typically don't come cheap.

Architectural marvels made out of shipping containers may seem like a steal. Like tiny homes, they’ve gotten plenty of online attention lately. Buy a couple of the containers—and voilà, there’s a home. Right?

But wait! “Container homes are definitely not always cheaper than standard housing,” says Mark Hogan, an architect and principal at San Francisco–based OpenScope Studio, a firm that has done two container build-outs. “A container home is probably two to three times more expensive than a standard suburban home built out of wood framing, on a per square foot basis.”

The biggest expense is insulating the vessels, which can overheat in the summer and be quite cold in the winter. To do that, builders typically put up new walls to cover the insulation—which defeats the purpose of having a ready-built box.

Another challenge: Once containers are cut open, they lose sturdiness. So they need to be reinforced—often with pricier steel beams that require skilled welders who don’t come cheap, Hogan says.

“It’s not as simple as just buying one of these boxes for $2,500 and moving in,” Hogan says. “You still have to put a roof on it. You still have to put in windows. You still have to build a foundation, run utilities, and install plumbing.”

He doesn’t believe many contractors could even make a container home habitable for less than $100,000.

Brad Tomecek of Tomecek Studio Architecture pegs the container markup closer to 15% more than a traditional home, per square foot.

And then there are the (near) Trump-level luxe models. The largest container home his Denver, CO–based firm built clocked in at 1,700 square feet and included three of the shipping crates. The opulent abode cost a whopping $552,500—that was in 2012—and didn’t include the cost of the property it sat on.

Yurts: They’re back

This yurt, in Centuria, WI, is selling for $40,000.
This yurt, in Centuria, WI, is selling for $40,000.

Yurts: They’re no longer just for Mongolian herders. Sales of the circular homes have been steadily rising in pockets of the U.S.

“We’ve seen quite a few retirees buy a piece of ground and put a yurt on it and get out of debt,” says Ivy Fife, the marketing manager of the Colorado Yurt Co. “And it’s young people, too.”

The company’s largest model, which has a 30-foot diameter and encompasses about 706 square feet, costs about $20,000. It has a wooden frame and vinyl cover. Owners still need to put down a typically wood or concrete foundation and then hook up utilities such as electricity and running water, which can run another $20,000, she says.

Some yurts are insulated, although most owners install a wooden stove. The company has one model that can sustain up to 150 pounds of snow per square foot. They can also be used for camping as well as studio or office space.

As for the challenge of furnishing a circular home? Well, these things have been a staple of central Asia for 3,000 years. You’ll figure it out.

The post Tiny Is the New Big: The Next Wave of Space-Defying, Affordable Homes appeared first on Real Estate News and Advice - realtor.com.


Related Articles