AFFORDABLE HOUSING: A Tiny Home in a Backyard? Boxabl Says Yes. But It Depends on Where You Live.
Tiny homes are one of the hottest trends in the affordable housing market. A new startup is taking this trend to an extreme by manufacturing tiny modular homes, to be placed in existing property owners’ backyards.
Boxabl lives up to its name, as the modular units will soon be built on a factory assembly line and then folded — due to their innovative technology — and shipped to property owners in the continental U.S. Upon arrival, they’re unfolded into units the size of a studio apartment.
The company is the brainchild of father-and-son-team, Paolo and Galiano Tiramani. They believe there’s a huge opportunity to lower the cost of housing “dramatically”.
They believe the housing construction paradigm is ripe for disruption, as homes are still built by hand. They also believe their factory style of mass production will “dramatically” lower the cost of housing.
They also want a piece of the global construction market. The forecast for 2023 is more than $15 billion.
But there are several caveats that concern the legality and add to the cost of making these homes a viable, affordable option, depending on where you live.
Costs and Caveats
Each accessory dwelling unit, as they’re officially called, (Boxabl calls them “casitas”), costs $50,000 — exponentially less than the average home price in the U.S.. But that’s just for the unit itself. A buyer still needs property — either theirs or someone else’s — with permission to put the unit on it.
And, that permission is not always granted. These modular units that go in backyards have traditionally been known as “granny flats,” because they were originally designed for elderly relatives as part of a homeowner’s property.
These self-contained units have since evolved into accommodations for relatives of any age, as well as potential income opportunities as rental units.
But some cities don’t allow the use of granny flats at all. And, even if they do allow them to be put in a backyard, they may not allow them to be used as rental units.
California Dreamin’ to Start
California backyards are the first target market for Boxabl. And, luckily, state law here is more conducive than it’s been in the past, in terms of getting an accessory dwelling unit on someone’s property.
That’s thanks to Gov. Newsom, who signed AB 68 in 2019. This law made significant changes to ease the installation of granny flats by reducing obstacles to their approval and construction. All in an effort to increase California’s affordable housing supply.
Under this bill, municipalities are now required to approve one detached, accessory dwelling unit up to 1,200 square feet that is a new construction, for single-family homes.
It remains to be seen if other states will follow suit.
And, anyone looking to buy a Boxabl home will also need to hire a contractor to assemble it. Boxabl will keep a list of recommended contractors but does not supply its own.
Paolo Tiramani, co-founder and CEO, is an industrial designer and mechanical engineer who holds over 150 patents; these have generated more than $1 billion in retail sales in a variety of industries.
Galiano Tiramani, co-founder and director, is an entrepreneur who has founded several startups, including a cryptocurrency exchange and ATM network, which acts as a custodian for customer funds — with an annual trade volume in excess of $10 million.
They launched Boxabl in 2017 and proceeded to build a 170,000 square-foot factory in Northern Las Vegas. They’re in the final stages of setting up this factory.
They claim on their crowdfunding site (see below), that ultimately this factory will produce about 3,000 homes per year.
The units are in pre-production right now. Eventually, the factory workers will build one or two units per day.
The intent is to pay these employees approximately $25 per hour, Galiano Tiramani told inter-TECH-ion.
Boxable has filed more than 17 patents for its assembly-line style of mass production.
What They’re Made Of
Boxabl doesn’t use wood to build the units. Instead, it uses materials like steel, ceramic boards and expanded polystyrene foam for insulation. This foam is a lightweight, rigid, “closed-cell” insulation, which only allows for minimal water absorption.
As a result, these units can withstand harsh weather like snowstorms, hurricanes, and floods. And, they can withhold up to a quarter million pounds of pressure. They are also constructed to be seismically-safe.
At this time, the casitas can be delivered by truck or train anywhere in the continental U.S. Eventually, the company plans to export them outside of the country as well.
The units can be shipped and then assembled on location due to what’s known as “tilt-out-tech,” which allows them to be folded during transit.
This technology is also what makes factory production possible and scalable around the world, Galiano Tiramani said.
What Each Casita Contains
The casitas can be unfolded and set up quickly, according to Galiano Tiramani. Each occupies 375 square feet, with ceilings that are more than 9 feet. They come fully furnished with full-sized appliances including washer/dryers, dishwashers, ovens and microwaves — essentially everything but a couch and bed.
Buyers can get multiple units and stack them on top of each other.
Boxabl started with more than $2 milion invested by the co-founders.
To date, the company has raised about $12 million.
It’s currently doing a Title III equity crowdfunding raise on StartEngine, which means that the investment opportunity is open to both accredited and non-accrediteed investors. The minimum investment required is $500.
Orders Received So Far
On its crowdfunding page, Boxabl claims that it’s received more than 30,000 pre orders. But with only about 10% of these reservations having paid a deposit.
Housing at Military Bases
Housing America’s active-duty military is one demographic that’s already taken off. Recently, Boxabl scored a federal contract for more than $9 million to build and deliver 156 casitas.
These units will be set up at a military base in Florida.
Helping the Homeless
Ultimately, Tiramani said he’d like to see the Boxabl units used to house the homeless.
But where and who will pay for them — cities or counties or nonprofits — remains to be seen.
Effect of the Pandemic
Like many businesses, new and established, the pandemic took its toll on Boxabl. The company experienced a shortage of raw material supplies and price increases because of that. But it survived. And its co-founders are hoping their new paradigm will be a successful option for the affordable housing market nationwide.
inter-TECH-ion intern Noah Chavarria contributed to this article.