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.

By Teresa at MSN Real Estate Jul 27, 2011 12:41PM

Photo courtesy of Daniel Wicke/Rural Studio, Auburn University 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.

 

Post continues below

 

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.

 
56Comments
Jul 29, 2011 4:30AM
avatar
$20,000 which is $12,000 in materials and about $7,000 to $8,000 in labor and profit.  Um, so what about land to put this house on, property taxes, sales taxes, closing costs, etc.  There is no way this house could be built for a $100 a month mortgage.
Jul 29, 2011 3:56AM
avatar
Hey middle class ... this is your future.
Jul 29, 2011 1:27AM
avatar

Why do the houses need such a big porch?

I guess it's for all the work shoes LMFAO!

 

Jul 28, 2011 2:50PM
avatar
"someone", you are very defensive and hostile.  Perhaps the government needs to provide you with some anger management classes.  Your lack of personal responsibility is evident by your inability to express yourself in a meaningful manner.  Your inability to discuss the key points at hand leaves you with nothing more than a childish rant.  Are your poor communication skills the fault of your high school (guessing that college never happened) or do you take responsibility for it?  Most important of all.....how did you know I like Twinkies??
avatar

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?

Jul 28, 2011 2:16PM
avatar

 Really! Their college kids! GIVE EM A BREAK! This is how you learn you OAFS!

 We have a lot of grade school children posing as congress and you spend your time here?

 Get real or get OUT! Your the problem!

Jul 28, 2011 12:39PM
avatar
Great concept. However there are tornados in Alabama. The house not being attached to a foundation does not seem to offer more protection than a mobile home.
Jul 28, 2011 8:20AM
avatar
There are towns in Kansas offering free land if you will build on it.  You'd want a below-ground shelter in addition to the house as they have tornados there.  I guess they do in Alabama too.  The funny thing is, you can buy a nice little house in the midwest for $25,000 to $30,000 with central air and a nice yard.  It depends on where you want to live.    
Jul 28, 2011 4:12AM
avatar
I have been discussing this type of smaller housing with close friends for the past eight years. There has been a need for it for several reasons such as economics, people sizing down for retirement,less maintenance, and on and on. There is a company in a town east of Austin Texas that has been producing small country homes built on an assembly line and delivered to your lot for several years. They are exceptional, however they run much more than $20,000. But my point is maybe Americans should start looking at this concept of smaller homes with a more open mind. Looking for the negative, ex. hidden cost, hurricane winds, effect of jobs in America, older homes in some state are cheaper, and if America could see my political view we could afford our old larger homes. The smaller home site is a needed alternative for many Americans for many reasons. Many of the issues concerning a few can easily be worked out. Increases in costs can almost be expected on any new home being built. However, a $20,000.00 starting point for a new smaller, contemporary home is just good common sense. The idea of driving smaller cars in America has been held back by the same type of skeptical thinking.   
Jul 27, 2011 9:18PM
avatar

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....

 

 

Jul 27, 2011 8:43PM
avatar
Gail..no..these are NOT houses that poor people can afford.  they are houses that poor people can afford due to the government assistance they get.  So...they ARE handouts.
Jul 27, 2011 8:14PM
avatar

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. 

Jul 27, 2011 7:19PM
avatar
Hello MichiganRealEstate, you said, "$20,000 could buy you 4 houses in the Detroit area." please tell me/us more. I am interested to buy such houses.
Jul 27, 2011 6:18PM
avatar

Not a problem to build a home for $20,00 and a real cute one at that. However the land it sits on is a different story..

Jul 27, 2011 6:15PM
avatar

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. 

 

 

Jul 27, 2011 5:57PM
avatar
There is a place you can buy an already built home for $20,000 or even less here in California if you can believe it. It's the city of Trona, California and it's located in the Mojave desert. The homes are so cheap because they can't even give 'em away. It's a one company town with that company mining chemicals outta the ground with sulfur being their biggest money maker. If you don't mind the constant smell of sulfur & living in a 100 year old dilapidated shack, you'll love it!

Jul 27, 2011 4:00PM
avatar

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.

 

Jul 27, 2011 3:39PM
avatar
A lot of areas require a minimum square footage, which is near impossible for $20,000.
It is possible to create a $20,000 house if you build a Tumbleweed house on a trailer.
This keeps your costs down, and allows you to move whenever you get tired of your neighborhood.


Jul 27, 2011 3:33PM
avatar
Well, I may not have had my house built by students but only paid $12,000.00 for it a mere 7 years ago. Have had it paid off for 5 years and STILL have a hard time with survival in this economy. It's not a shed either, 3 bedrooms, 1.5 bathrooms, and full basement.

Jul 27, 2011 3:32PM
avatar

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?

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

FIND YOUR DREAM HOME OR APARTMENT

or

WHAT'S YOUR HOME WORTH?

HOME IMPROVEMENT PROFESSIONALS

Find local plumbers, electricians, contractors and more.

from our partners