The New American Starter Home

A cruel housing market is the mother of invention.
Author:
Publish date:
(Illustration: Sebastien Thibault)

(Illustration: Sebastien Thibault)

Luke Iseman, a 31-year-old graduate of the Wharton business school, lives in a white shipping container. It sits on a small lot in West Oakland, in an industrial area of the city where factories— chocolate, cement, and soy—abut residential streets. Iseman moved onto the lot this past fall. Late one afternoon last December, he fired up his forklift and began muscling another shipping container alongside his own. The new container belongs to his friend Sean Kolk, who bought it for $2,300 after it was salvaged from the port of Oakland, just a few miles away. Kolk works for a biotech start-up in San Francisco. The container is his new home, and Iseman is his new next-door neighbor.

Driving a forklift and moving shipping containers around is not the kind of work that most Ivy League biz-school grads hope to land. But for Iseman, it’s all part of a compelling new business venture: an attempt to create a more affordable model of urban home ownership.

In 2014, the percentage of American homeowners under age 35 hit its lowest point on record.

Just a few months earlier, Iseman and five of his friends had bought the lot, a third of an acre, for $410,000. Each of them committed $30,000 toward a down payment and agreed to pay $500 each month to cover the ongoing cost of the mortgage, property tax, and insurance. With that money, each bought the right to occupy one of the 14 spaces available for tiny houses on the lot. Kolk, their first renter, pays $600 a month for one of the eight remaining spaces available. At the front of the lot, a small steel building will provide a kitchen and two bathrooms for residents to share. Iseman also has plans for a communal garden and workshop. Once all 14 spaces are filled, Iseman predicts, he and his friends will be able to pay off their mortgage in about seven years.

Walking inside Iseman’s shipping container, which measures 192 square feet, is not unlike entering a friend’s studio apartment. Space is at a premium. Along the back wall, his bed is elevated to the height of a standing desk for convenient double-duty as a workspace. Beneath the bed are shelves for his clothing. Above the bed, a projector screen drops down to give privacy from the rest of the room and provide home entertainment. A full-size door and four windows, all cut out of the walls of the container by Iseman, provide easy access and plenty of natural light. The floors are varnished bamboo. The container can run comfortably off-grid, although it is currently hooked up to the city’s water supply. Solar panels on the roof provide electricity—more than enough to run household items including Wi-Fi, a video projector, and an outdoor washing machine. A hose connected to the container supplies the water; a propane tank heats the container and the water, and fuels the stove. Iseman paid $12,000 to convert his container into a finished home, and his company, Boxouse, recently began accepting orders for similar units, which cost between $10,000 and $29,000, depending on the level of customization.

Before moving to West Oakland, Iseman and his girlfriend, Heather Stewart, lived in San Francisco’s Mission district, where, with a roommate, they rented a two-bedroom apartment for $4,200 a month. Appalled at the cost, they moved to Oakland, rented a vacant lot, and each converted their own shipping container into an off-grid tiny house. Soon a number of their friends and acquaintances were subletting on the property, living in old buses and campers; Iseman and Stewart were making $1,000 above the rent. Eventually, that lot was put on the market and sold for well outside their price range, and they decided to buy one of their own: the lot in West Oakland where Iseman’s container now sits. Moving his house was as simple as wheeling it across the neighborhood using a forklift and a trailer.

ps_break1.jpg

In 2014, the percentage of American homeowners under age 35 hit its lowest point on record, according to the U.S. Census Bureau. At the same time, according to the National Association of Realtors, the number of first-time homebuyers hit its lowest point since the 1980s. Iseman, who graduated from college with $65,000 in student debt, thinks his generation needs to re-evaluate the current model of housing. “Helping people understand that there are ways to pool resources to own things is helpful,” he says. “It’s feasible for most people our age to save up $30,000 to do something like we’re doing. I don’t think it’s easy, but it appears doable.”

Iseman paid $12,000 to convert a shipping container into a finished home, and his company, Boxouse, recently began accepting orders for similar units.

Iseman doesn’t see tiny houses and shared spaces as a downgrade from the traditional model of single-family or individual ownership. He also doesn’t think a lot of young people would, either, if given the option. “There should be a conscious choice about what you have private for yourself, as opposed to shared,” Iseman says. “We don’t have those choices with most housing situations, and we should. These things should exist on a spectrum. There’s no barrier to making it that way.”

Adjusting to a communal lifestyle might be free of significant barriers, but Iseman still has a number of legal obstacles to navigate in the future. The shipping containers themselves, and other parts of the property, are not up to housing code. Fortunately, city officials have responded well. “It’s exciting to see people being innovative about construction,” says Rachel Flynn, Oakland’s director of planning and building. Flynn notes a few other tiny-house projects in development throughout Oakland, including one the city had already granted a special-use permit to begin construction. Her main concern is ensuring safety. “With containers,” she says, “the big thing is figuring out how to incorporate them into the building code, since they’re not made to be lived in.”

Iseman and the other co-owners of the property are open to working with the city to bring things into compliance. Ultimately they hope their land can act as a hub where other community members can be connected with resources and organizations in the city geared toward starting similar projects. Iseman sees it as an opportunity for a diverse mix of long-time residents and newcomers to establish communal ownership in the area while development intensifies and rent increases. As he puts it, “I want to be able to say, ‘Here’s another site doing something similar’ or ‘Here’s how to start your own.’”

Space on Iseman’s property has been filling up quickly. A number of friends reserved openings within a month of Kolk’s moving in, and Iseman is already looking for ways to expand. Maybe, he speculates, the containers could be stacked on top of one another and secured, as they are on ships. If so, he’d probably need outside investors. Each new question brings on bigger questions, making one thing clear: Iseman’s tiny homes give no indication of his large ambitions for them.

Submit your response to this story to letters@psmag.com. If you would like us to consider your letter for publication, please include your name, city, and state. Letters may be edited for length and clarity, and may be published in any medium.

For more from Pacific Standard on the science of society, and to support our work, sign up for our email newsletter and subscribe to our bimonthly magazine, where this piece originally appeared. Digital editions are available in the App Store (iPad) and on Zinio (Android, iPad, PC/MAC, iPhone, and Win8), Amazon, and Google Play (Android).

Related