Yes, you can build a house for $20,000
Architecture students take on affordable housing in rural Alabama as a class project. So far, they've designed 10 interesting, inexpensive homes.
Six years ago, a group of Auburn University architecture students were presented with a challenge: Could they build a house that people dependent on public assistance in rural Hale County, Ala., could afford?
From that challenge, the $20,000 house project was born.
Since 2005, the students participating in the university's Rural Studio have designed and built 10 different $20,000 houses, which have gone on to become homes for people who previously had lived in substandard housing. The students have kept in touch with the residents to see how they use the homes, to further refine the designs.
"We came up with the number $20,000 because it is the amount people on government assistance could actually afford to pay – the mortgage is only around $100 a month. Also, the homes would be an investment for the person, appreciating in value over time," Andrew Freear, the Rural Studio's director, said in an interview for the university website. "We are trying to get these houses to be built by a contractor, so it is actually about $12,000 in materials and about $7,000 to $8,000 in labor and profit. That was the challenge we put to ourselves."
The first house was about 780 square feet. The most recent house measured 530 square feet, plus a large porch.
The $20,000 houses may be smaller than your standard double-wide trailer, but they are superior in a number of ways. They are more energy-efficient, which means lower utility bills, important to people struggling to get by on limited incomes.
They are also sturdier and don't deteriorate and lose value as quickly as a trailer does.
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The latest $20,000 house was featured in The Wall Street Journal. It was built in a square rather than a rectangle because it's more economical to build that way and cheaper to heat because the furnace is in the middle. And it looks less like a trailer.
Freear talked to Krista Tippett of Public Radio International's "Speaking of Faith" program a few years ago about
how the students work with the clients who will inhabit the houses. He explained it this way:"For my students, we don't really talk about it being charity, I'll be actually frank to you. The, what we see as being the exchange that's taking place here is that our client is a good and willing and interested and observant and rigorous and questioning client. And that's the privilege that we have in that situation. Yes, we will work with you. We want to listen to you. We want you to be very critical about what we do. Don't just say give us anything.
"And we work with people who don't know what an architect does, so we have to educate them as to what an architect can bring to a situation. We educate them to understand drawings, to engage in a conversation about spaces, to engage in, you know, the question of, what do you want? When people have never been asked what they want. We make lots of models. We make lots of perspectives, so people can begin, or at least try to begin, to imagine themselves in that place, because they have never been asked to do that before. They've never been asked to imagine before. And that's an amazing situation to be in as a student, I think."
The Rural Studio hasn't yet come up with a $20,000 house that can be easily replicated nationwide, but the students are working on it.
I think someone is unfamiliar with single family housing. The cost of material in a house is minimal, and almost nonexistant in compairson to the critical costs of building fees, local taxes on building (such as education bonds to fund spanish language instruciton) and the costs of sewer, water and electrical extension, and of course the last--road construction.
An average single family house in California probably has a total of 20,000 in raw building material, the rest is fluff and frills and taxes taxes taxes.
So how much are these 20,000 houses with a lot, sewer building permit/fees and utilitiy hookups?
To EstateBuyer,
With regard to what MichiganRealEstate says. what he has indicated is true, But in doing my investigation on this, I have come up with these facts, which you should consider if you do consider investing in Detroit Metro real estate:
1) Almost all of the $ 5000.00 per house real estate will be in the City of Detroit, and not in surburban Detroit.
2) If you buy that $ 5000.00 house, most likely that house will be run down, and will require extensive repairs/refurbishment which will be required to comply with City of Detroit home liveabitity requirements and to meet current code and standards requirements befere anyone (you or a Tenant) can move into the property. This may cost $ 20,000.00 to $ 30,000.00 (or more) per house.
3) Property taxes per dollar property value in the City of Detroit are some of the highest in the United States. For example, for a typical $ 50,000.00 house in the City of Detroit will be $ 3000.00 to $ 4000.00 (or more) per year for a homesteaded (owner occupied for 183 days or more per year) property, and considerably more for a non-homesteaded property. This equates to 6 to 8 percent of property value per year (assuming that the property is homesteaded) compared to approximately 2 percent of property values per year on a national basis. And all of these property taxes are to pay for very highly paid civil servants, police and teachers in the City of Detoit.
4) If you own and drive a car in the City of Detroit, you will pay the highest auto insurance rates in the United States. For an average auto insurance policy written in the City of Detroit, look at paying about $ 5090.00 a year for a basic liability/comprehensive/collision auto insurance policy. And given that public transport in the City of Detroit is meager at best, you will most likely need a car to get around.
5) Although I have not investigated the cost of homeowners insurance, I suspect that homeowners insurance rates in the City of Detroit are probably high due to the problem of crime related to home break ins and the damage from these break-ins due to the crime spree in Detroit. You do need to do some investigating on this.
But don't get me wrong about Michigan in general. There are still other places in Michigan outside of Detroit in Michigan where you can still buy property cheap, and not have to put up with the problems/hassles of the City of Detroit. I am personally looking at retiring and buying a home in Northern Michigan, where auto insurance rates are about 1/3 of what they are in the City of Detroit, Property taxes are about 1/3 of what they are in Detroit, where you can buy a reasonably good sized home in good shape with some land for about $ 80,000.00, and where you do not have to constantly live with the crime problem that Detroit has.
So before you consider buying a house in Detroit, do your research, and see what you come up with. I have did mine, and decided to stay away from Detroit Metro. Good luck....
The article did not directly state whether or not land, or land improvements werr counted in that $ 20000.00. Where the homes were built (rural Alabama) and the land was already improved and paid for by others (e.g. a water well was dug septic put it, electric and telephone utilities ready on the property, etc.), I assume land is relatively cheap, so if the price included the land, I may believe that the $ 20000.00 house argument.
However, it may be difficult to replicat this nationwide, since labor, land, and materials costs vary widely across in the United States. For example, you could not do this in surbaban NY City, where a small land plot to build that small home may run you $ 150,000.00 plus, labor costs are considerably higher than in rural Alabama, and where zoning regulations may require you to build a 1500 square foot home or larger.
But barring that, there are still many places in the United States where land plot costs are still relatively inexpensive (for example in Northern Michigan where I am considering retirement you can buy a small land plot for $ 2500.00), labor costs are low (e.g. builders pay close to minimum wage for construction labor), and where land improvements are already there (e.g. water/sewer/utility connections are up to the property line, and only have to be extended by the builder from the property line).
But giving the above, the concept is interesting, and should be investigated on a nationwide basis, and adapted accordingly.
Some asked about the durability and hurricane resistance. The article addressed the issue somewhat by saying that the structure could endure 100 mph winds. It is much better in this regard than a mobile home. Some strapping would help however if it has not been done. As to durability, the metal siding and metal roof are very durable and relatively maintenance free. I have metal farm buildings and know that to be the case.
As to the size, they are small indeed, but really, we could do with a lot less than the average size house of today. The house size in the articles should be fine for a couple anyway.
Lastly, some commenter's are correct in writing that the prices of the houses in the article does not include the land and perhaps well and septic if in the country. This could easily boost the price to over $40,000. As also mentioned, there are many areas where you can find a good house needing a little or no work for nothing short of cheap in today's market. I have seen many houses in High Point, NC and, just outside Myrtle Beach, SC, two markets of which I am familiar, that have 3 bedrooms and 2 baths for less than $40,000. Some were brick. A lot of them were in good neighborhoods.
Pharmacydoc, like most righties, you ASSUME that poor people don't work hard, or even work at all. And public education is only as good as the local government is willing to pay for it to be. These are not handouts, these are houses that poor people can afford, and the students who design and build them are learning in a way no classroom, textbook or lecture hall can teach. It's a win-win situation.
And by the way, we are one of the richest nations in the world, if not THE richest. Corporations are making record profits in recent years. The wealthy have gotten phenomenally wealthier. We are 14 trillion dollars in debt because people like you think that investing in our country is "socialism". Taxes that are the lowest percentage of GDP in 50 or more years are "too high". (Compared to what? Not our own history, not other nations.) Cutting taxes on the rich has not created jobs, especially good-paying jobs. It has contributed hugely to our deficit, as have two unfunded wars and a big pharma handout disguised as a Medicare drug plan.
Some of our country's greatest achievements occurred during times when taxes were high and debt was incurred. (I E the Civil War) Those debts were always repaid because our government was run by intelligent, fiscally responsible people who cared about the future. Now we have a bunch of selfish and self-serving dunderheads who would have you think we are a dirt-poor nation with no resources and no future. The latter may become a self-fulfilling prophecy if the current destruction of our education and social systems continues. America - from first in the world to third-world nation, compliments of the Republican Governors and the Tea Party suicide squad.
This is an interesting concept but there are some unanswered questions about these homes.
1) Will they survive hurricane force winds?
2) I doubt the 20K price tag includes the cost of the land and laying the utilities in place which then pushes the acquisition costs up significantly from a percentage standpoint.
3) How many people can comfortably live in these? Is this meant for a couple or would it be expected that a family may try to live with 4 or more members in one of these?
4) What are the expected maintenance costs per annum? Can replacement pieces be purchased at a Lowes or Home Depot or do they have to be special ordered?
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.
msn real estate is social
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