Saturday, March 18, 2017

Why do "tiny houses" cost so much?


I noted a news report that an Oregon county was offering incentives for homeowners to let the county build so-called "tiny houses" in their back yards, and rent them out to the homeless.  The price quoted for the first "tiny houses" was $75,000 apiece.

I find it impossible to understand that figure.  After all, mobile homes are often much bigger, yet they're much cheaper, and frequently include appliances as well.  A single-wide mobile home typically costs $35,000-$40,000, including all related costs (e.g. moving it to your site, connections, etc.), while a double-wide can be twice as much.  Older models on clearance, or used mobile homes in good condition, typically sell for half to two-thirds of the cost of new ones.

There's also the cost of travel trailers.  They can be very expensive, but basic models are relatively low-cost, even at retail prices - certainly in line with, or even below, the cost of mobile homes.  While some travel trailers are flimsily built and won't last long in continuous service, others are sturdy enough to be adopted as permanent homes by so-called "fulltimers".  I also know, from personal experience after Hurricane Katrina in 2005, that so-called FEMA trailers, widely used in disaster zones around the USA, can be bought used, in good to excellent condition, at prices ranging from $10,000 to $20,000 retail (and often half that at wholesale).  Whatever their origin, travel trailers are as large as or larger than most "tiny houses", and can be parked anywhere there are power, water and sewage connections.

So, how do "tiny house" manufacturers justify charging such an exorbitant price for such a small structure?  Can anyone explain?  Has anyone built one, or had one built, so that they can tell us at first hand why these things cost so much?

Peter

21 comments:

Jonathan H said...

I have a friend who has one near Seattle. I was shocked at how much she paid for an unfinished shell on a lightweight trailer.
She felt it was a great deal - I believe they are that expensive because housing in the areas they are popular is so expensive that they seem cheap in comparison, and further that as a rule beater for the same areas that have what are (to me at least) ridiculously over the top planning, permitting, and zoning requirements.
Makers are charging what the market will bear, and getting away with it due to the rules of the area and the expectation of high cost.
Areas such as Seattle, San Francisco, and several other large cities have artificially constrained their housing stocks, driving prices up to crazy heights - the tiny house movement is one way that people are responding to those high costs. The other major way people respond is by finding a job elsewhere and leaving the area. The saying "It's a nice place to visit, but I wouldn't want to live there" applies to those places 9except that some of them I wouldn't even want to visit - once was enough).

Carteach said...

The words 'Government', 'Over priced', and 'Insanely inefficient' are mutually inclusive.

Ruth said...

The ones I've seen are often using fairly high end finishes, or buying (at high prices) "old" finishes and reusing them. Also, many of those neat little storage options cost a small fortune to buy by themselves. Which also adds to the price. Plus yup, they're charging what the market will bear.

riverrider said...

look at it this way, they have to have everything a regular house does only in a lot less space. it still has a kitchen, and a bath, which are the most expensive rooms of your home. cramming all this in the tight but sturdy envelope takes time, labor, which is the biggest expense of all. typical rule-of-thumb labor on a house is 110% of material cost. that heavy duty metal frame isn't cheap either. the single wide/double wide trailers are built in a factory on an assembly line by cheap labor. when i worked in one, we built 5 or 6 houses a day. the trailer frames are flimsy, the rafters are sometimes 2x2 lumber, cheapest shingles etc.

Ron Merrell said...

Living in a spectacularly overpriced market myself, I investigated these myself some years ago and came to similar conclusions. These are almost all essentially being made by boutique builders using premium materials, and the labor costs are high because each one is unique or made in very low quantities. Mobile homes are marvels of cost efficiency due to economies of scale and clever design. Tiny houses have no efficiencies of any kind. I have found them built by their owners for far lower costs using less expensive or salvaged materials - but as these houses are being highly scrutinized by the deeply conservative government approvals process, using these materials can end up with the house not being approved at all. If you want to try this as a DIY project - perfectly straightforward - I would suggest doing it somewhere where the local government is less intrusive or nonexistent.

Anonymous said...

I have a "tiny house" on my hunting property. It is essentially two attached 12'X12" sheds, without a wall between them. The interior space is 288 square feet. With insulation in the walls, two windows on the front and back, one window in the bedroom, a dining area, living room, kitchen, bathroom, a single bedroom; all powered by standard 240v/100 amp service or a generator. It has an electric hot water heater and electric, 220v wall-mounted space heaters in the living room and bedroom. Total cost of materials was about $5K.

Now on top of that, you would need to connect it to either a septic tank/field, have a well dug (or connect to city water) and connect to an electric grid. Not sure how much that would cost, but would probably add $20 to the cost.

I suspect the "tiny houses" cost has something to do with the type of people who are attracted to them. My guess is that they are mostly progressives for whom the smugness factor of being able to tell us all how low their "carbon footprint" is, and how they're not using more resources than their "fair share" more than makes up for the lack of comfort and ludicrous cost. They would be happy living in caves.

I could be totally wrong about that, but I wouldn't want to live in a house that small.

Waidmann

Mad Jack said...

Not all tiny houses are over-priced, trendy sheds. Many are reasonably priced and designed for someone who lives off the grid. A good friend of mine did this for about 20 years, and has recently returned to civilization - she says she's happy, by the way, but she misses her privacy.

House trailers are built very cheaply and won't last nearly as long as a tiny house. Trailers are assembled in a factory using cheap materials.

jbrock said...

Hipsters pay through the nose for 'tiny houses on wheels' so they won't have to admit they're living in trailers.

Joe Allen said...

Anonymous nailed it: virtue signalling by upper middle class progressives.

Some of the most interesting alternative housing designs I've seen recently are based around repurposed shipping containers.

Another building method I've been fascinated with for over 20 years is monolithic dome houses.

C. S. P. Schofield said...

Back in the day when I was working for FYE, the latest hit album by a mainstream pop star cost about $7, whereas if you wanted something obscure, like a little known modern classical composer, or a foreign language disc, you were looking at $16-$21.

Tool-up costs on mass produced thing get read over hundreds of thousands, or even millions of copies. Tool up costs on the rare have to gat paid off with a few hundred sales.

When CD players first cake out, they cost $1000 or more spice. Now they cost under $50. Same deal; when they were new tech that wasn't a sure sale, the tool up costs had to be recovered quickly.

Now, apply this to houses. if, and I say IF, tiny houses take off as a social phenomenon, they will get cheaper. OTOH, if they are the housing equivalent of Laserdisc, they will stay expensive, and die.

Anonymous said...

Or you could just print one:
https://singularityhub.com/2017/03/05/watch-this-house-get-3d-printed-in-24-hours/

-JM

Erik said...

There is actually a specific legal category for these houses in Sweden, called Attefallshus. They're limited to 25 sqmtr (about 250 sq ft), and if you dont want to do it all yourself you can buy a kit for as low as $7k, or you can get a finished house delivered "key ready" for anything between $30k to $50k. And this is in Sweden which is not a low price country and also requires houses that can stand the winter there.

I just cant see any reason for a higher price, the $50k houses i've seen are really high end designer houses.

I've read about similar ideas from politicians to get people to build more of these to help solve the housing problem with the refugees that came here. But they just wanted people to build them themselves, they didnt offer to pay for them.

Sherm said...

I was talking with a builder once and, at the time, government compliance was on the order of $20,000 per house exclusive of labor and materials. No way one of these high cost areas is going to forgo that kind of income (or more) just because someone wants a smaller house. Someone (else) has to keep the community's wheels greased.

eriko said...

Another way to think about them is that there not houses but custom boats. Mobile homes and RV's are built in factories with off the shelf systems. The high end tiny house has a custom frame and a hand build body. If the builder is good it is actually road worthy and meets RV spec's so that you can go to rv parks and use their hookup. Waste storage needs to be on board black water, grey water and or composting toilet. Solar power and a battery bank if you want to be off grid. Propane storage non stock small fridges and stoves.

Basically a comparison to a boat makes more sense to me.

Anonymous said...

A tiny house is different from an RV because it is typically built to standard housing code even though it may reside on a trailer. They tend to be heavy and overbuilt compared to an RV.

An RV is built to RV code and is much cheaper and lighter.

Interestingly enough, insurance requirements have driven some tiny house companies to certify as RV manufacturers so their customers can purchase coverage for their new mobile homes.

Unknown said...

In short?
Because the people buying these tiny houses wouldn't be caught dead living in a mobile home or a trailer.

Anonymous said...

RVs aren't designed for long-term occupation, and mobile homes are barely mobile. These are something new, and as others have pointed out, not built to economies of scale. They are still a niche product.

There are plenty of lower cost alternatives, like building your own. Converting an old bus also appeals to me.

Antibubba

Anonymous said...

Doing it this way would preclude the "mobility" the tiny house devotees appear to regard so highly, but.....pre-cast, post-stressed concrete panels are pretty good for assembling small structures. I've seen a couple 24X24 guest houses built with them, and assembly, including the pre-manufactured roof panels (concrete panels on steel trusses), takes about one day with a medium-size crane and well-trained crew of 6. If the slab the panels rest on is done right, the interior fitments - bathroom, kitchen, interior wall panels, etc. - can sit crated on the slab while the house is assembled around them, and it's another 2 days for installation of all the inside stuff, including a ductless split system for heating/cooling, couple days longer for tile instead of carpet if that's your preference. Nothing fancy, all standard sizes, with attachment hardware, plumbing and electrical conduit already cast into in the concrete panels, it's like Legos. The resulting <600 sq ft isn't luxurious, but more than adequate for simple living, and there's opportunity to "fancy it up" to the limit of your budget. (I'm waiting for someone to assemble several of them, connected by gerbil tubes and centered around a courtyard, into a 3-4K sq ft house.)

Theother Ryan said...

I have looked at this a lot. The answer I found is people choose tiny houses for different reasons. Some, particularly in big cities do it to get around zoning laws. Others do it for environmentalist reasons. These folks often care less about cost than a fiscal conservative or survivalist. Also they might want fancy surfaces and features which seem counter intuitive to you and I. Granite, fancy appliances, etc cost money even in a small place.

Anonymous said...

Another opinion worth nothing, lol.

Because the 'Tiny House' footprint is so small, the fixtures and appliances which are used are expensive because of that feature. Recall that the'earth friendly composting toilet' Clivus Multrum literally had the house built around them because of their bulk. With space being such a premium, the fitting together of the house's components is much like a puzzle, especially if servicing of said were anticipated.

I do agree that construction costs can be held down substantially. Design the interior plan around 4' wall sizes so cut down on cutting interior sheathing to fit. Closets - half that depth (24" deep). All in an effort to reduce time to install and having to buy extra materials that will be thrown away later. Super insulation (SIP) panels can reduce the size of heating / cooling unit.

Lastly, if home has to be built on site, the people who build these have to be relocated to that location, so housing cost for them is also added into budget.

Anonymous said...

Found this video link to small home ideas that sounded pretty good to me.

https://vimeo.com/120916980