Will Tiny-House Communities Help Middle-Class Homebuyers?
The novel approach one Arizona town is taking to attract and keep teachers
The housing market in the United States may have bounced back since the Great Recession. But fairly stagnant wages, higher home prices and steep rents have made it harder to afford buying a home. The State of the Nation’s Housing Report 2018, from the Joint Center for Housing Studies at Harvard, said “nearly one third of U.S. households paid more than 30% of their incomes for housing in 2016.” The squeeze explains why purchasing a tiny home in a tiny-house community has become more attractive for some buyers.
To help middle class homebuyers, the Vail Unified School District in Vail, Ariz., is offering land owned by the school district as a site for a tiny-home community.
Tiny Houses for Teachers
John Carruth, associate superintendent, says the idea was born during a spring 2017 meeting about hiring and retaining teachers. “There are no apartments within our school boundaries, which is 425 square miles, and our teachers who rent apartments must drive 20 to 25 minutes and pay $700 to $800 in rent,” says Carruth. “Our teachers also expressed an interest to be a part of the community in which they teach.”
The average teacher’s salary there is between $33,000 and $41,000. According to Zillow, a leading real estate site, the median home price in Vail is $266,700, making purchasing a home out of reach for many teachers.
During the meeting, the group came up with the idea of providing land for tiny homes the school district owns on the 15-acre site of the original historic town site of Vail.
“There are some original structures on the site from the early 1900s. And revitalizing the original site, as well as providing affordable housing to our staff, just made sense,” says Carruth.
Another benefit for the residents, Carruth says, is that this area is centrally located within Vail, within walking distance of three schools, a grocery store, restaurants and other businesses.
Turning the Idea Into Reality
Many in the school district were intrigued by the tiny house idea; an initial meeting to gauge interest drew over 40 people. To turn the idea into reality, the district spent about $200,000 on infrastructure and other improvements.
Carruth says detractors who don’t understand school budgets may say, “Why don’t you just use that money to give the teachers a raise?” But, he explains, “We cannot use the money earmarked for capital improvements on salary. We’ve given our teachers a 10% raise. But even if we gave them 20%, it still wouldn’t help them with today’s home prices.”
The school district has approved a company called Luxtiny as the builder of the tiny-home community. Its homes are about 400 square feet with the average cost, including appliances, at $65,000 to $68,000. Carruth says that puts the monthly payment at about $500 to $600; residents will also pay $125 for all utilities, including internet access.
The community expects to accommodate up to 20 homes.
Downsizing to a Tiny House
Sherry Stebbeds, 65, who manages the Luxtiny tiny-home community in Lakeside, Ariz., says she and her husband, Rick, 72, moved there to downsize. “We paid over $200 a month for our utilities [where we lived before]; our utilities here total $62 a month,” says Stebbeds. And, she adds, “we save on homeowners insurance.”
Stebbeds says visitors are amazed at what she and her husband can fit into their 399-square-foot house.
“I love to bake and cook, and I have a gourmet kitchen,” says Stebbeds. “It was also important we not have a loft, so our layout is all on one level.”
Luxtiny allows for an additional storage shed, as well as an additional 144-square-foot guest house for family members who may want to visit.
Steve Dedmon, owner of Luxtiny Manufacturing,, plans to build 40 lots on six acres of land in Lakeside, leased by the homeowners — much like in Vail.
“I really think these are the way of the future,” says Dedmon. “People can have a custom home for up to $72,000, instead of $250,000 to $300,000.”
James Young, director of the Washington Center for Real Estate Research in Seattle, says tiny-home communities may be an answer for some finding it challenging to afford rent. But, he notes, tiny homes alone won’t help much in high-density cities.
“If a person must buy land, that’s 50% to 60% of the cost of your total purchase in an expensive housing market such as Seattle,” says Young. “So, unless there is a community of higher-density tiny houses on leased land, I’m not sure tiny houses are the answer to housing affordability."