Living in Detroit on $10,000 a year it might seem impossible to buy a new house, thankfully now it’s possible thanks to a new neighborhood on the city’s northwest side. Two blocks of newly built tiny houses were designed to help people living in poverty to move into new houses.
The program they use is rent-to-own, homeowners will pay $1 per square foot in rent monthly. That means that for example a 250 square ft. house the rent will cost $250. On the other hand a similar home in the city will probably cost twice as much. You will pay off the entire house after a maximum of seven years.
“Poor People lack an asset,” said Faith Fowler, a pastor and executive director of Cass Community Social Services, the local nonprofit that designed this program. “They don’t have anything that they could use as collateral, they don’t have anything they can sell to climb the economic ladder, if you will. They don’t have anything to leave their children. We saw this as the start for poor-people making as little as $10.000 a year can end up owning a home in seven years.”
Other programs like the homes built by Habitat for Humanity, residents must have a mortgage. “People making that small amount of money can’t qualify for a mortgage,” pastor Fowler said. “So they’re essentially locked out of housing that serves as a piggyback for the rest of us. In Addition to the pride of having a place you can call your own, the beginning of wealth, or the security of having an asset you can call your own, was very important to us. More important than the tininess of the home.”
Houses range in size from 250 to 400 square feet, come equipped with a basic and a kitchen but no bedroom. They are funded by private donations and foundations. Professional builders handle the foundation, shell, roof, electrical and plumbing, the rest is done exclusively by volunteers. Part of the materials are also donated which reduced the costs of the houses. Most of the houses cost around $40,00 to $50,000 ($15,000 of which are the foundation and utilities). “For about the price of an expensive car, we can give you a pretty nice home,” Pastor Fowler Says.
The small size of the houses also reduced the heating costs, even in extreme cold homeowners should pay about $30 monthly for heating and electricity.
The residents must go take monthly classes on financial literacy and home maintenance. Also the Cass Community HQ can help with education and nutrition programs as well as mental health counseling.
The organization thinks that this model can be used elsewhere. “Certainly for cities that have an abundance of relatively inexpensive land, this is a great proposition,” says Fowler. “It also makes sense in some rural areas. Everywhere I travel, I see homeless people now. It’s not just cities anymore. Two or three tiny homes might make a tremendous difference in a rural setting.”
Seven homes have been built so far, which should grow to 25 for the entire neighborhood. The second phase would involve building 10 slightly larger homes for families. It helps that Detroit doesn’t have zoning restrictions or minimum size requirements for small homes. This month, the first residents are expected to move in.
Most importantly, this project and the housing it provides is slowly transforming a bleak neighborhood. “The neighbors are ecstatic,” pastor Fowler said. “You get the sense that with these tiny, bright, beautiful new homes there’s a renaissance occurring in a small way in a neighborhood that hasn’t had much to celebrate for a long time.”