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This Tiny House Cost Only $20k

In a tiny Alabama town, you’ll find a group of students and advisors who have managed a considerable feat, one that is changing the very foundation of real estate.

Rural Studio, Auburn University’s design-build program, has devoted more than a decade to a significant project: designing a tiny home that is affordable enough for those living in poverty to buy it while maintaining aesthetic appeal AND paying the local construction team a living wage to build it.




At the beginning of 2016, after many prototypes, the team finally finished their first pilot project. They partnered with a commercial developer outside Atlanta and built two one-bedroom homes in an upper-class neighborhood with materials that cost a total of $14,000 for each home.

The overall goal of this project is to allow anyone, even those living below the poverty line, the opportunity to invest in a home that is safe, functional and efficient. These homes, dubbed the 20K Home, may soon be available to the general public.

“We’re in a kind of experimental stage of the program, where we’re really trying to find out the best practice of getting this house out into the public’s hands,” says Rusty Smith, associate director of Rural Studio. “Really this first field test was to find out all the things that we didn’t know, and to find out all of the kind of wrong assumptions that we had made, and really find out how we had screwed up, honestly.”

The two one-bedroom pilot homes are the product of years-worth of hard work and fine-tuning, totaling one hundred thousand hours. While the homes themselves are incredibly well-designed and implemented, the designers are realizing some obstacles they may face when it comes to obtaining permits for the dwellings.

“The houses are designed to appear to be sort of normative, but they’re really high-performance little machines in every way,” says Smith. “They’re built more like airplanes than houses, which allows us to have them far exceed structural requirements. … We’re using material much more efficiently. But the problem is your local code official doesn’t understand that. They look at the documents, and the house is immediately denied a permit simply because the code officials didn’t understand it.”

The design of the foundation of these homes deem them even safer than a typical foundation. However, the design is so different from what code officials see in consult guides that they may reject a permit because they don’t understand how it works.

“There’s a thousand and one things in the houses that are like that,” he says. “You’d never see them, the construction techniques, but the house is filled with them. Construction techniques that make the house not just less expensive, but actually makes it perform better than they normally would.”

Smith and his team then decided to create a ‘guide’ for their homes, to educate both local officials and homeowners. It includes instructions on how to build each piece of the home as well as how to educate officials who may doubt its compliance.

“A traditional construction set basically tells a builder what to build,” says Smith. “And what we learned that we really need is what we’ve come to refer to as not a construction set, really an instruction set. That not just tells what to build, but specifically how to build it and even more important, why it should be built that way.”

Permit issues aside, the team ran into a multitude of other problems that needed sorting. For instance, they hit a logistical wall when they approached banks about insuring and mortgaging future homes they would build.

While the pilot project homes are owned by the community and don’t require a bank mortgage, a typical home-buying situation requires a loan from a bank. If someone is hoping to buy one of the homes but doesn’t have $20,000 cash to pay for it, banks won’t finance such a small mortgage.

According to Smith, Regions Bank (which works with Rural Studio) told him that a mortgage for a $100,000 house costs the bank the same amount of money as a $20,000 mortgage (around $2,300). “There’s a lack of scalability,” Smith says. “There are these structural things you can only scale down so far.”

However, Regions Bank is hoping to find a solution for the mortgage issue. They are working to create a new mortgage product that even the poorest of citizens can afford.

“The most daunting problems aren’t brick and mortar problems, they’re these network and system problems that are threaded together and all intersect in the built environment,” he says. “We’re able to attack all these problems simultaneously—when we see a lever over here and wiggle it, we can very clearly see the implication it has on other systems down the road.”

Another serious challenge was making the homes with the least amount of money possible but also making them just as beautiful as traditional homes. The team believes those living close to or below the poverty line shouldn’t have to give up the pride that comes with a good-looking home in exchange for affordability.

“When was the last time you were driving down the street by an affordable housing project and you thought, ‘Boy, I really wish I lived in one of those for myself,'” Smith says. “The goal of 20K House is really to design a house that’s affordable, that anybody could have—and that anybody would want.”

Once the team has finished their instructional guide, they hope to share it with anyone and everyone who wants to use it. “The ultimate goal of the project is to give it away,” Smith says.

While the project was originally meant to create the homes for less than $20,000, students and advisors alike believe more money will be necessary to provide a living wage for those building the homes. Some have suggested using factory-made prefab parts but the team has rejected the notion based on their assertion that one of the goals of their project is to create local jobs. There is also an option for buyers to build it themselves, saving money that would have been spent on labor.

Either way, the cost will be minimal compared to the prices of traditional homes.

“We provide the information to you, so that if you wanted to sort of self-service the house yourself, it is a house that with the right set of instructions, anybody who wanted to could build it,” Smith says.

The team of students, advisors and their supporters are eager to start helping low-income families get into their very own tiny home. Smith is becoming impatient to share their developments with the general public.

“We’re behind schedule, quite honestly,” Smith says. “So many people need it now.”

One of the Cheapest Tiny Houses We Have Seen

*photo credit: Jessica Ashley Photography



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