
Austin Startup Sees a Big Future for Little Homes - alexjray
http://austininno.streetwise.co/2016/01/15/micro-living-austin-kasita-homes-offer-affordable-urban-housing-option/
======
basseq
Some math:

A 208 sq-ft. mini-studio for $600/mo (+ the up-front purchase cost, whatever
that is). That's $2.88/sq-ft.

By way of example, I found a 538 sq-ft. studio in downtown Austin for
$1,387/mo. That's $2.58/sq-ft.

So, by area, the Kasita is more expensive. (This should not be surprising.)
The argument then becomes one of absolute dollars: the difference between a
538 sq-ft. studio and a 208 sq-ft. Kasita being fairly moot, so hey, save
$600+/mo.

And I laud this: I think there's a great market for micro-housing. (See also:
all the "Tiny House" shows on HGTV.) I don't understand why I need to buy a
"pod" and then convince developers to put a "rack" on their lots. Just build
smaller apartments: the math should work out.

~~~
flubert
If you can swing the $53/month mortgage, you might like to take a look at:

[http://www.zillow.com/homedetails/11451-Lansdowne-St-
Detroit...](http://www.zillow.com/homedetails/11451-Lansdowne-St-Detroit-
MI-48224/98031530_zpid/)

...looks like a nice neighborhood, and the inside seems we'll maintained. So
that's $0.04/sq-ft/month.

~~~
goda90
I've thought about the idea of establishing a micro community in Detroit. Buy
up cheap adjacent houses and lots and get entrepreneurs interested in a
combination of tech business(to draw outside money) and local service
businesses(restaurants, stores, etc to service the community members and
attract more people) to move in. The biggest investment would be establishing
good security, utilities and internet.

~~~
grizzles
I'm interested in this, maybe as an investor too. I like the idea of ways to
enhance the 'buy and hold cheap houses' investment concept. I also have one or
two ideas on how to do that. Send me a message if you go ahead with it. My
email is in my profile.

------
teekert
I'm pretty sure there is a market, but it feels so much like: "Here slave,
have this small cabin." "Let's make this the new normal for the workers so
they can do with even less wages as we increase profits." "Hey, what are you
whining about? It looks like an iPhone inside out, doesn't it, it's design,
isn't it?" "It has a microwave, hasn't it? You can live on mac and cheese. You
know what, we'll place them on campus, you'll be home in a sec!"

~~~
msabalau
Perhaps the assumptions that cause people to aspire to a McMansion are the
ones that "enslave". "Here, have a bigger container, so you can collect more
things."

~~~
fluxquanta
There's a television commercial[0] currently airing for Quicken Loan's "Rocket
Mortgage" product that is literally saying this and it bugs me every time I
see it.

[0]
[https://www.youtube.com/watch?v=QlRm6Y5iVfw](https://www.youtube.com/watch?v=QlRm6Y5iVfw)

~~~
alttab
Yeah I get scared when I see that one. They are literally tone deaf.

------
dpflan
It's important to note that this is not a one-time $600 apparently. It's more
like, find a developer who has created a rack, and pay to rent a space in that
rack and plug in your home and continuing paying for space in that rack. I
guess moving is a lot easier - just find a rack in another location.

"The idea is to have developers purchase racks and individuals purchase
Kasitas that fit into them. The developers would make money with homeowner
association fees. And homeowners would own their Kasita, paying about $600 a
month -- or about half of an equivalent studio in central Austin." [from
linked source]

But I'm still even confused by this wording and the $600 tag - is it just
cheaper rent in another form and a different ownership model?

~~~
fencepost
This business model exists, and has existed for a long time.

The big problems that I'm aware of with it are that moving your unit can be a
headache - think "transportable" not "portable," that units tend to depreciate
(vs appreciation for permanent structures), and the ever-present concern about
tornadoes in much of the country.

And yes, it's called a trailer park. As I understand it, you generally
purchase and own your own mobile home, but you're leasing a pad from the park
owner along with the costs for utility hookups.

~~~
gertef
Since trailer parks tend to be the choice of low-income /lowe-wealth
residents, in practice the mobile homes tend to be owned by the parks and
rented.

~~~
fencepost
That's pretty variable - the person I knew who lived in a mobile home had one
that he'd inherited from his mother. I think the lot rent was not too far from
what I'd previously been paying for a pretty nice apartment which really kind
of sucks since all he was getting for that was a cement slab with some utility
hookups.

The other problem he had was that because he owned the mobile home, to get out
of the whole situation he had to either find someone to buy it (and take over
the space or move it) or he had to get it out of the space himself. The
residual value of a 20+ year old mobile home is really pretty low if it hasn't
been kept up well, but I think he eventually sold it off to someone for a
small amount of money just to avoid having to fix it up enough to be moved.

------
CullingTheHerd
As has been stated in other comments, it's not that we don't have enough homes
or that we don't have affordable homes.

Perhaps the "free-market" is not the optimal distribution system for housing.
Said another way, perhaps the manner in which we meet our most basic needs of
shelter, security, and stability should not be left to the free market.

A corollary then might be, perhaps if social and political frameworks had
priority over (but not to the exclusion of) economic frameworks runaway real-
estate prices might not so inevitably lead to the unnecessary but unyielding
march of the unwilding of our environment (when there are massive tracts of
dilapidated real-estate crying out for redevelopment), gentrification of
communities and the concomitant loss the cultures of those pushed out into
either the diaspora or relocated into projects, and the hand-to-mouth
existence that many of us experience, even full-time and well paid persons.

$600 houses are a red-herring to the real issues, not a solution to anything.

~~~
zanny
Another option is to actually make it a free market by reintroducing
homesteading. Undeveloped or unused land, after a period of abandonment, would
effectively become open game for anyone to start developing and the previous
owner would forfeit it.

Using real estate as a store of wealth, like gold, is incredibly toxic for
society, because it basically takes money (and in the case of real estate,
land) out of the economy to mitigate fiscal risk.

~~~
HeyLaughingBoy
That's pretty much a non-starter. There's plenty of cheap, undeveloped land in
the middle of the country for sale but there are few buyers. Out here where I
live, it's not unusual for even very nice homes to be for sale for _years_
before an offer comes in.

In the middle of a city? If you have someone sitting on land waiting for the
price to go up and you threaten them with "not using it," then odds are
they'll put a cheap building on it and sell storage space or something. What
would that accomplish?

~~~
rlonstein
> In the middle of a city? If you have someone sitting on land waiting for the
> price to go up and you threaten them with "not using it," then odds are
> they'll put a cheap building on it and sell storage space or something. What
> would that accomplish?

I saw this in action. I wanted to buy an old firehouse for conversion to
owner-occupied loft and workspace. Current owner had purchased it in the early
1980's for a few tens of thousands of dollars from the city and the
neighborhood had declined-- only half-joking it was the corner of Crack and
Stab just down from Needlestick Park. The owner had moved cross-country and
left the property and it's value had declined but it was adjacent to a
gentrifying neighborhood and a short walk to a city bus stop. When I tracked
them down they never responded to calls or letters, the local attorney they
had last used had no contact with them, and they had stopped paying taxes. The
city finally declared that they would seize and auction it off not because of
the back taxes but because the sidewalk was not being cleared of snow and the
exterior was unmaintained. Suddenly the absentee owner paid up half his
delinquent taxes and let a local guy who repairs cars park vehicles in the
bays, etc. Great improvement, now there are beat up cars and junk and the roof
has started to collapse but because the sidewalk is clear, it's good.

~~~
CullingTheHerd
that's actually really interesting. that's local government at work for you,
in the most real and annoying sense. people getting involved and trying to
change things at the local level only to be stymied by some a-hole preventing
a good change by satisfying the letter but not spirit of the law. gotta love
local politics/government. such a beautiful mess.

------
baltcode
This is where I'd like to see more innovation. The kind of stuff that takes
most of the time and money for most people. Housing, cleaning, food storage,
plumbing, transport, security. How come cars, homes, wholesome dinners, home
repair, car repair costs more or about the same as 20-30 years ago. We have
more and more materials to work with, efficiencies of industrial processes and
machines has improved and more stuff is automated. How come the little guy/gal
is not getting any of it other than the internet?

In many part of, say the Rust Belt, or many innner cities there are tons of
abandoned buildings and houses. If only the repairs and maintenance costs
decreased, a lot of people could use them.

~~~
alexjray
Completely agree baltcode, as amazing as teslas and iphones are homes are the
center point for everything else. There is a huge housing crisis and it
effects much more of the economy, environment and community than most people
realize and I can't help but feel like there is much more innovation to be had
on this front!

~~~
mathgeek
The problem you run into is that housing (the land, really) is both a useful
object and a rather solid investment. It's that dual functionality that makes
it a different problem from disposable objects (iPhones and cars, as
examples). Very few cars or phones are purchased as investments directly
(meaning you see the value appreciate). Housing is almost exclusively an
investment, both for finances (whether collecting rent or being able to
leverage the value down the road) and for the land it sits on.

A world where most housing becomes disposable (i.e. it is not directly tied to
the land it sits on) would be very different from the one we currently live
in.

~~~
derekp7
"A world where most housing becomes disposable (i.e. it is not directly tied
to the land it sits on) would be very different from the one we currently live
in."

So basically the trailer park model?

~~~
mathgeek
That's what I envision, but I like to be optimistic that it wouldn't be _that_
bad.

~~~
derekp7
One variation is the campground model. I have a camper parked at a fairly
decent campground, costs are about 2.5K a year (plus electricity and waste
disposal). But where I live the camping season is about 5 months. However, it
doesn't have the feel of a trailer park -- instead if feels like a resort
area.

------
coldtea
Don't really understand the US rent prices. I mean, I can understand SF or
Manhattan being expensive.

But the US has huge empty countryside, vastly expansive residential areas,
AND, for the most part, houses that to European sensibilities seem like made
for dolls (thin wood panels for walls, cheap construction, no concrete or real
bricks to be seen, etc). And parts are much cheaper than in Europe.

Both of these factors should keep prices very very low. $600 per month micro
homes? You can get $600 per month regular, spacious home, in a city like
Berlin -- and much lower in other places.

~~~
ctdonath
Distance.

Urbanites & Europeans don't seem to grasp how _far_ it is between the
affordable/cheap housing and the "tech centers" in downtown wherever (or how
vast the USA is in general). I've got a reasonably good housing price in the
'burbs, but that means a 40+ minute drive in (leaving _before_ 6:00AM, every
minute thereafter = a minute longer drive), and 90+ minute drive back (leaving
at 4:00PM prompt, again gets worse the later I leave). Sure, there's lots of
cheap land not far out, but a major media company isn't going to relocate
there, and us contractors aren't going to relocate just to be close to it.

We also average bigger homes, roughly twice the size as in Europe.

~~~
coldtea
> _Urbanites & Europeans don't seem to grasp how far it is between the
> affordable/cheap housing and the "tech centers" in downtown wherever (or how
> vast the USA is in general)._

Well, I'm probably an exception, as I've travelled all across the US (several
coast to coast road trips and such, from Highway 1 to Route 66 and loads
more).

But I don't see a 10, 20 or 30 mile commute as a problem. He have those in
Europe too, and in much worse highways or congestion in some cases (e.g.
inside the city one can spend 30 minutes to get across 5 miles).

> _We also average bigger homes, roughly twice the size as in Europe._

True, but also a lot of trailers and projects, which one doesn't see much, if
at all, in Europe. The closest will be some small, confined, old buildings in
Eastern Europe. (And I think our "projects" equivalent are much better).

~~~
surge
That's because you have no room for cheap housing to exist on, and cheap/low
quality houses are usually built where the land is cheap. Simply put, land is
at such a high demand or premium there, and its rare to see a situation where
you'd spend so much for the land and not bother to put at least home of
equivalent value. You don't have much land to waste on a trailer or projects.
Here you can get a parcel of land for a couple of thousand, so someone will
put a cheap home (trailer) on it and it makes sense, but you won't often see a
trailer on land that costs as much or more than the trailer. So the economics
of it just work out there that anyone who would live in a trailer in Europe
couldn't even afford the land if they couldn't afford a house. There if you
can't afford to build or buy a house, you certainly could not afford the land
to put it on.

On the commute you're assuming that because driving 30 miles down the highway
is easy you don't also have to cross through the city once you get there to
get to the office. Take that 30 mile commute, say that takes 20-25 minutes to
get 25 miles of it down the highway to the city, now you're in the city, so
now you add the 30 minutes it takes to get through those last 5 miles now that
you're in the city dealing with the same traffic as a city resident. Now you
have the reason why the commute is worse. You still have the same commute
through the city, unless the office and is on the edge of the city and you
live on that end as opposed to the opposite side so you don't have to go
through or around.

~~~
coldtea
What would be the reason for a tech company to have its offices in the city
center though?

~~~
cauterized
If the city is ringed by suburbs, being in the city center gives you access to
potential employees from all the suburbs, not just the nearest ones. As well
as employees who would prefer to take transit to work rather than drive (a
growing demographic). Plus if you're trying to attract younger employees,
they'd generally prefer to work somewhere that's convenient to the same places
that are convenient to their friends' offices and close to bustling after-
hours businesses. They want to meet friends after work, and would rather
travel 15 min within the city rather than 40 min back to the city or in a ring
around the city in order to do that.

------
Bjorkbat
Meanwhile I live in Downtown Albuquerque for $770 a month plus < $100 a month
for utilities. Maybe not as developed as downtown San Francisco (far from it
actually), but there's still more breweries, music venues, coffee shops, and
restaurants than I know what to do with.

I can't take this solution seriously as long as I pay almost the same price
for a loft apartment with exposed brick walls, bamboo flooring, a washer and
dryer, and a number of other nice things that I'm too lazy to list. I
especially can't take it seriously knowing that there are communities
practically begging for people to reverse the trend of the rural exodus.

Granted, the tech community isn't as strong here, but you'll still probably
figure out a way to make things work if you've got out-of-state connections
and don't mind dealing with our slightly confusing tax policy.

------
geogra4
The problem isn't that there aren't enough homes, or that we don't know how to
build cheap homes.

It's simply that desirable land is so incredibly expensive.

Unless these homes can be stacked to the sky in an affordable way, I have my
doubts that this will change anything.

------
CalRobert
Of course, one of the issues with small homes in the US is that you're usually
legally forced to add parking, which might take even more space than these
homes. What good is a 300 square foot home when you're legally forced to build
400 square feet of parking for it?

In San Diego it's illegal to build a house unless it comes with 2 parking
spaces. An apartment requires 1.25 spaces. This is ridiculous, of course, and
part of why most US cities that were built after the 40's are dreadful.

------
ck2
This is hilariously naive for both the buyer and seller.

Who wants to live in a space the size of your college dorm room past your
freshman year?

Also, all it takes is one bad neighbor and your life is hell since you have no
space buffer. If not a booming stereo at all hours, then something as simple
as slamming doors to wake you up at all hours.

Young men, maybe, could deal with this for a short while. The turnover
otherwise would be very high.

------
SwellJoe
I have lived, at various times, in a motorhome (240 square feet with the slide
out), a travel trailer (190 square feet, and my current home), an apartment
(600 square feet), a full sized house, a small house (800 square feet), and a
big house with roommates.

I am thoroughly sold on tiny houses. I don't need a McMansion to be happy.
Don't want one, in fact.

But, I don't like these and don't find them attractive, at all. They have the
negatives of an apartment and none of the benefits of a tiny house, as I see
them. The "rack" concept is antithetical to the independence I want from a
tiny house...if I hate my landlord (as history indicates I will), or otherwise
want to move, I have to relocate my whole house to another compatible rack.
That virtually guarantees I can't move to where I want to move (because
there's no way this is going to be hugely popular). So, I'm stuck selling the
thing. Might as well buy an apartment (also a thing I would never do).

I think they're trying to solve several problems at once, and ending up with a
suboptimal solution for all of them. One problem is high rents in downtown
Austin (which truly has gotten out of hand, and will only get worse as long as
Austin remains the fastest growing city in the US), another problem is home
ownership which is out of reach for more people than ever (for a variety of
reasons, and it is most pronounced in growing cities), and finally I think the
tiny house thing is a backlash against the suburban dream of huge houses. The
thing is, though, that this won't be affordable...the small number of
available locations to "park" your tiny house will guarantee the landlord is
in a position of strength when negotiating rent so this will be more expensive
than other tiny homes in general. The issue of wanting to own your own home
isn't solved when you don't own the land it sits on, as you're still a renter
with the added stress of what to do with the damned thing when you move.

Anyway, I like that tiny houses are becoming more "normal". I don't like that
the model for how it's being implemented looks a lot like renting.

------
larrywright
For what it's worth: here in the midwest, that's almost what I pay on the
mortgage for a 3 bedroom, 2500 sq ft house.

------
hippich
basically, it is "rack-etized" mobile park. From my understanding, due local
MUDs being over capacity and pretty expensive per-pad costs to bring sewer,
electric, water (i assume they are not going to deal with gas.) mobile parks
are no longer "easy" investments.

I.e. from tech-standpoint it might be feasible.

From consumer standpoint - price they are offering - not sure, we need to see
price of the "kasitas". Unless something drastically changed during last few
year, it should be possible to find decent "traditional" apartment for +- same
amount. And if you account for price of "kasita" \- it might actually become
on par of fancier appartments.

But most risk is in infrastructure for that project - it might get
prohibitively expensive. and $1m does not sound like a lot to make that
happen, unless they plan investors building "racks" AND pay for bringing up
utilities AND dealing with state/MUD.

------
jokoon
If you consider the 5% of the poorest people, and consider the environmental
cost of concrete, and how dense urban areas are stressful and that there needs
to be more space between homes, then this totally makes sense.

What I'm more worried about is insulation, humidity, and other stuff like mold
and durability. Also those types of house are not really viable if you can't
sit down just outside next to it if there is too much noise or pollution.

So to be honest, it seems to be more a problem of urban planning than anything
else, which can be political. A tiny house is interesting if other parameters
makes it interesting.

------
Overtonwindow
Move to Atlanta. Midtown apartment, 1,100 square feet, $980 per month. No tiny
house or pad or lot or anything needed. Heck you could buy a 3,200 sq ft house
15mi from city center with a mortgage that's only $1,200 a month; like me.

------
eastbayjake
If Oakland city leaders were more proactive, they might use their 90 day rent
hike / eviction moratorium[1] to recruit modular builders and create zoning
exceptions for this type of housing. $600/month would be a lifesaver as median
rent in Oakland hits $2950 for a two-bedroom. (It would also probably be a
cheaper way for SF to house the homeless than acquiring or building new SROs.)

[1] [http://sf.curbed.com/2016/4/5/11365144/oakland-rent-
eviction...](http://sf.curbed.com/2016/4/5/11365144/oakland-rent-eviction-
moratorium-city-council)

~~~
pessimizer
The rent isn't engineered into the building.

------
okyup
Not really new. I've seen many companies creating similar homes - it's been
popular for a few years at least. The more interesting ones (in my opinion)
are the ones optimized to be highly efficient for living off-the-grid and
self-sustainably.

It's scary at the same time. Humans are getting smaller and smaller and more
irrelevant and powerless and less individual. In the future we'll probably all
live in little pods under some kind of gigantic government that controls our
lives. Maybe we'll be happy, but we'll be shadows of the diverse and complex
beings we once were.

~~~
aaronbrethorst

        Maybe we'll be happy, but we'll be shadows of the
        diverse and complex beings we once were
    

These "diverse and complex beings" you refer to. When did we fit the model
you're thinking of, exactly?

~~~
okyup
At all times up until present - constantly fluctuating, but generally trending
upwards with the ascent of the evolution of life and of human beings. And
perhaps it will continue for a long time yet. However, the majority of humans
long to end it or at least to set it back.

------
epenn
Please be safe to live in... then please, please, please build these in
Boston.

~~~
mmcwilliams
They've been building micro units in Boston for a while now, but the results
are less than impressive: [http://realestate.boston.com/news/2014/11/26/micro-
units-pop...](http://realestate.boston.com/news/2014/11/26/micro-units-pop-up-
in-boston-fetch-high-prices/)

$2,000/mo for 420sqft

~~~
ghaff
Although I don't have the figures, I suspect that by the time you factor in
all the infrastructure for a unit (elevators, common areas, hallways, parking
(?), etc.) you don't really cut out all that much cost by reducing units by a
few hundred square feet.

Seaport rents are particularly extreme for reasons that I confess I don't
fully understand but you definitely get into diminishing returns as you
decrease apartment size.

------
Zigurd
Comparing Kasita with the cheapest rents just means it isn't for those
markets.The question is whether there are enough high cost markets where
Kasita rack density and potential speed of installation for Kasita is
financially compelling to the developer and Kasita owner to make sense.

In very general terms, in the US, Kasita will be a tough sell. In most places
land is cheap enough that something like the Rural Studio $20k home designs,
which are around 550 sq ft, are going to prove significantly more cost-
effective.

------
6stringmerc
Maybe it was personal frustration when dealing with proprietary Sony
connectors in audio-visual world, but I certainly wouldn't be interested in
doing such a lock-in with my living arrangement. Nothing personal. Oh, in this
economy though, and not in Austin, there are people renting ~$300/month
rehearsal spaces and living in those around here. No showers or kitchen, but
for those who want to be different in their own way, well, they find them. I
personally dislike that work-around though.

------
pdharka
"Wilson said people need to see it to believe." \- I wonder how much he is
doing that. If he could get some show like Big Brother to have to use the
Kasitas for a season, that might break down the resistance of people, making
it normal or even fashionable to live in it.

AirBnB has a lot of research and data on housing, the market needs and prices
all over the world. Finding common grounds with AirBnB (and having them
invest) might give them the strategic partnership needed to find their
product-market fit.

------
wahsd
It's amazing how the hipster and tech-douche crowd loves solving problems they
are the cause of. It's so wonderfully reflexive and blusteringly ignorant.

------
vansteen
Comparing to a flat in my city Paris, France... Many people (student, young
professional) lives in small flats like that. I lived in a flat like that. The
price of a 25sq-meters flat (= 270sq-ft, the Kasita) is around 200 000 US$ .
To rent one, it's around 850 US$/month I lived in London too. It's even more
expensive.

------
ArkyBeagle
You need a Big Pickup to move one ( you won't be moving it all the time ) but
a fifth wheel is easily available now and has more square feet than those
little cubelets. I came really close to making a business of nothing more than
hauling used fifth wheels up to North Dakota during the oil boom.

------
mikestew
So this guy invented the hipster trailer court? Because the stereotype of a
trailer court and its residents is something _everyone_ wants in their
neighborhood!

(And, personally, I'd have no problem living in a mobile home in a trailer
court, were it not for the people I'd likely live next to.)

------
patrickg_zill
You can go even tinier:

[http://www.amazon.com/Shafers-Book-Backyard-Sheds-
Houses/dp/...](http://www.amazon.com/Shafers-Book-Backyard-Sheds-
Houses/dp/1565238168)

100 to 120 square feet. And they are (or can be made) transportable.

------
fasteo
"Kasitas" is slang for "Casita", which means "little home" in Spanish

------
Animats
Why is this in Austin? Ten miles from downtown Austin is farmland.

------
cphuntington97
Une maison est une machine-à-habiter.

~~~
Isamu
Le Corbusier! I guessed right. Now I have to admit I don't really know what he
meant by this.

~~~
cphuntington97
Pick any modern automobile, and you can drive to your destination with ease.
Each car maximizes some manner of cost, comfort, materials, efficiency, and
safety. Compare a modern car with a 100 year old vehicle, and you will find
innovation in absolutely every area. A machine for moving people. You don't
need to bring anything with you. You don't need to bring your own chair to sit
in, for example - the car already has that.

Now, pick any modern house. You will find almost no innovation compared to a
house that is 100 years old. You'll need to bring your own chair, since the
house just has empty rooms. Think of all the things you need to do in order to
live. Shouldn't the architect of the house take all of these activities into
consideration? Le Corbusier uses such examples as -- shouldn't there be a
place to store artwork, so that there is always something different on the
wall? Shouldn't there be recessed lighting, so there is no dusty chandelier to
clean? Shouldn't there be as much natural light as possible, to avoid the need
for artificial light in the first place?

Shouldn't the house be a machine for living, just as the car is a machine for
driving? Where style is not bolted on, but rather the formal outcome of
functionality?

Another phrase he uses that I really like, "the answer to a question well
posed," or, "the solution to a problem well posed."

But anyway, I'm rambling. Read "Toward An Architecture." Any book that gets a
new translation at almost 100 years old is probably worth a gander.

------
electriclove
Trailer park?

------
trothamel
Am I the only one thinking of the stacks from "Ready Player One"?

