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As for the residents of the houses, rent is kept at 30% of income, which means the large majority of residents pay a maximum of $200 — including all utilities and internet — every month.
How are they planning to sustain this long-term?
Surely, someone is paying for the difference. Unless I totally missed it from the article 🫣
These places are tiny at 240 square feet. There's not going to be much $$ tied up in them for material and utility costs can't possibly be that hught because the homes are so compact.
If each home cost $40k, which is probably generous, over 30 years that's $111/mo. Internet is probably a commercial line to the site and then a local network type setup. The real question is how much the land cost.
Rent might not cover everything 100%, but it would be close. It wouldn't surprise me if some money from the locality was involved since people living on the streets isn't free and simply providing housing can be a massive first step to getting people reintegrated back into society.
It's why the tech millionaire financing this isn't a tech billionaire.
You're one of today's lucky 10,000! Landlords typically charge even more than the cost of building and maintaining the house, and then just pocket the rest as profit. It's bonkers!
Based
When I lived in germany full time, I would've loved to live in a tiny home, but germany would've rather put me on the street than allow a tiny home lmaoo.
Honestly when I see "tech millionaire" and "altruism" in the same article, I expect to seese seriously ghoulish shit.
I still have concerns around the long-term outcome - the land is ostensibly still privately held, and I assume the homes are as well. I'd like to
Worst case the business will forcibly close due to lack of rent payments, though, right?
Honestly when I see "tech millionaire" and "altruism" in the same article, I don't expect to see someone actually using their wealth to do something decent.
Millionaires still have their humanity on occasion.
Imagine if the public sector did this and didn't limit it to a single development.
We could even build bigger-than-tiny sized units. Maybe include additional amenities like schools and health clinics and food malls in the immediate vicinity. Throw in a rail stop so people can get to the metro center easily. You know... actual urban development.
No idea where we could get money for that, though. Maybe if Canada didn't exempt 50% of capital gains income from taxation for some reason... But no, that would never work.
Feels like now is the best time for other nations to have low capital gains taxes. No?
I get that he enjoys staying involved with the project including providing/helping services for the community, but this probably doesn't need to use the "30% of income rent" crutch that is typical. Would be less time consuming to sell homes at cost, perhaps partner with bank to guarantee mortgages at low rates, let the community be a self managed HOA. Can make unlimited communities that way instead of tying up all your/his time into this one.
That may be fine at first, but the price of those houses will skyrocket every time they're sold until they reach the current market prices again. By only renting them, he can ensure the price stays artificially low.
This is good, but if we address this at a systemic level, we don't need to put people in tiny low-density homes unconnected to anything for it to be affordable.
Presumably local governments have some mechanism for when they know a house costs X materials and Y labor, and they see new construction costing significantly more than that.
The result is detached homes@avg 75USD/sqft and apartments@55/sqft. With current interest rates of 6.768%, you'd get ~400 sqft homes with a $200/mo 30 year mortgage at those prices, 600sqft if interest rates were 3%.
I was like, holy shit that 55/sqft must be some 10 times as much as my rent (I'm not sure how much a foot is; I think I'm paying about 20-25€/m^2 per month). And then I realized those are BUYING prices. Holy shit.
827USD/m2
To be clear, this isn't exactly an apples to apples comparison; even if the US did free trade school with subsidies for living costs and everything, you're not going to get skilled metal workers and carpenters working for $35/day. While labor costs are only ~25% of the cost of construction, the same applies to how low you can get material costs, even when you've got central planning for concrete and steel industries.
I meant holy shit, as in, holy shit that is such an affordable buying price that I confused it for a steep rental price at first.
Yup. A group local to me put up around 20 tiny homes with a grant from the city. With the cost of upkeep, it would have been cheaper for the city to pay for 20 hotel rooms. Which wouldn't have had any fewer amenities than the tiny homes they made.
There's some benefit to them as backyard "mother in law houses" or for a cabin in the woods. For solving homelessness, no, there are better options.
Remember, theres a gigantic difference between the wealth of a billionaire and the wealth of a millionaire. For one thing, its possible to make a million without harming others, a BILLION though, you HAVE to sacrifice others to achieve.
On paper, sure. But I might argue that the process of accruing paper wealth as a backstop against misfortune and a reserve during retirement is inherently deleterious - forcing people to forego quality of life in the immediate term as a hedge against the future. This is a highly inefficient process for individuals to manage - who carry the whole cost of an incidental risk/exceptionally long life. And it is the whole reason public pensions and public insurance came to exist.
That's before you get into the moral hazard of certain professions and fortunate individuals being predisposed towards retirement, while others work right up until their dying days.
While the guy happened to manage to acquire almost $400 million by selling his company, it seems that he's really trying to do some good with that, quite frankly, ridiculous amount of money.
Also it seems that his employees were compensated somewhat above market rate while he owned the company.
Not exactly a dragon of his own making, we shall observe his career with great interest to see if he follows what seems to be his chosen path, as of now.
The difference between a million dollars and a billion dollars is about a billion dollars
Some rocker tried to do that in LA and they arrested him and kicked out all the homeless.
Impressive, it's even a walkable place seen that it is a mixed use neighborhood with commercial buildings too