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Tiny-House Living Could Help Provide Compact Homes For Millennials

Second of two articles on tiny-house living.

Tiny-house living could provide the path to homeownership for Millennials, a 45-million person population of potential first-time home buyers, housing advocates say.

Most Millennials—those young Americans age 25 to 34 years of age—are renting tiny apartments, and not getting married, starting families and forming traditional households fast enough.

What’s the problem? A major part of the dilemma is the soaring price of new homes and condominiums, which skyrocketed 29% between 2000 and 2016, according to the National Association of Home Builders. This problem has been acerbated by the lag in U.S. per capita income, which only has grown a pathetic 1% during the same period.

“If housing costs continue to rise, we could see about 600,000 fewer households formed over the next decade,” predicted a gloomy Len Kiefer, Freddie Mac deputy economist.

In Chicago, even Millennials who choose to rent have to dig deep in their pockets to afford basic downtown housing.

“Urban Millennials who choose to rent a studio apartment in a downtown Chicago high-rise will pay about $1,400 to $1,800 a month in rent, plus utilities,” said Realtor Sara E. Benson, president of Benson Stanley Realty.

For example, a 487-square-foot studio at Eugenie Terrace, 1730 N. Clark St., goes for $1,818 to $1,863 a month, plus utilities and parking.

At Presidential Towers, 555 W. Madison St. in the Loop, monthly rent on a 471-square-foot studio ranges from $1,375 to $1,430, plus utilities and parking.

However, Benson noted that Millennials who choose to buy a condominium would be surprised at today’s resale prices on studios—the “tiny high-rise” choice. Here are some recent studio resale transactions:

• 2000 N. Lincoln Park West. A 400-square-foot studio on the 12th floor sold for $157,000, or $176 per square foot, in December of 2017.

• 2400 N. Lakeview. A 490-square-foot unit on the 3rd floor sold for $160,000, or $326 per square foot, in December of 2017.

• 3660 N. Lake Shore Dr. A 448-square-foot unit on the 20th floor sold for $180,000, or $401 per square foot, in November of 2017.

• 1660 N. LaSalle St. A 500-square-foot studio on the 12th floor sold for $181,500, or $363 per square foot, in January of 2018. A parking space was available for a monthly fee.

So, what are the options for fulfilling the American Dream for thrifty, ecologically conscious Millennials seeking a simpler, more affordable life in Chicago? One viable option could be tiny-house living, experts say.

Typically, tiny houses are affordable, economically accessible, sustainable and ecologically friendly, advocates say.

Downsizing of space, reducing the carbon footprint, use of recycled rainwater and solar power can lead to living a simpler, less burdensome lifestyle off the grid.

Today, a tiny house generally is defined as a residential structure consisting of less than 500 square feet of space. Most tiny houses sleep four people and measure less than 400 square feet. The floor plan includes a living room, kitchen-dinette, a shower bath, two sleeping lofts, a through-the-wall heating/cooling system and maybe a solar panel or two.

The average cost for a do-it-yourself built tiny house is about $23,000, but retail cost typically is $75,000 or more. If a 500-square-foot tiny-house sold for an affordable $100,000—a fraction of the cost of a North Side Chicago resale studio condo—the monthly mortgage payment would be a little over a $1 per square foot.

For example, if the buyer of a $100,000 tiny house placed a 20% down payment and obtained a 30-year fixed-rate mortgage at 4.5%, the monthly payment for principal, interest, real estate taxes and insurance would only be $540 a month. Water, sewer, garbage fees, plus gas and electric utilities would only add about $150 to the total, so the monthly tiny house “nut” could be under $700—about half the rent of a typical studio apartment.

The question is where do we get the land to build thousands of tiny houses? With Mayor Rahm Emanuel’s reelection campaign already on the horizon, this writer is hoping a light-bulb will soon go on at City Hall.

Although Rahm has been selling South Side vacant lots for $1 to neighboring property owners, he must be wondering what the city should do with the vast real estate wilderness on Chicago’s South Side that is not in the backyard of President Obama’s namesake future library.

The city of Chicago estimates there currently are about 10,000 vacant lots on the South Side—most of them stretching from McCormick Place around 22nd Street to Hyde Park and from Lake Michigan deep into Washington Park, Englewood and West Englewood.

Back in 2011, the late William Lavicka, an affordable housing advocate and leading city renovation specialist, estimated that the “Chicago land bank” contained 40,000 to 50,000 lots when you take into account both city-owned and privately owned vacant property on the South Side and West Side.

If some of this property could somehow be resurrected from delinquency and put back on the active real estate tax rolls for the construction of 10,000 tiny houses, millions of dollars in new revenue could be injected into the sagging city budget.

Because a typical 15-by-30-foot tiny house doesn’t require much space, up to three units could be erected on concrete slabs or on wheels on a subdivided 25-by-125-foot city lot with some zoning and building code variations. Existing neighborhood utility hook ups likely would be nearby.

Ultimately, mini-neighborhoods of tiny houses could be privately developed to provide eco-friendly housing for first-time buyers, and suburbanites seeking in-town digs for a weekend in our world-class city.

Yes, permanent tiny homes even could be provided for Chicago’s poor and homeless residents, who always seem to be last on the list when it comes to finding affordable housing in a safe environment.

For more housing news, visit Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit

“The book is Escaping Condo Jail by Sara Benson and Don DeBat. I would say that anybody thinking about buying a condo, or even anybody serving on a condo board, or anybody who has any connection to a condo, this is must reading—all 600 and something pages. Thanks a lot for a great book!”


Steve Sanders, “Your Money Matters” WGN TV, December 22, 2014

By Don DeBat

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