The traditional approach to address the affordable housing crisis has been accomplished with rental housing by passing through federal dollars to landlords and rental property owners. While there will always be a place for rental properties, Tiny Homes are an opportunity to directly invest in the residents in the community who would otherwise be in a position to undertake a path to homeownership if homes were available in their price range. 

The U.S. Department of Housing and Urban Development suggest that affordable housing should not not exceed 30% of your income. While 30% for high income earners may be enough to purchase a home in most cases, people with incomes closer to the median income level in any given community often have no path to homeownership. In the city of Racine Wisconsin, the annual median per capita income is $24,550.00 in 2021 dollars.  At this rate of pay housing cost should not exceed $613.75.  The average Social Security payment as of February 2023  was $1,693.88 which means affordable housing should not exceed $508.16. This puts affordable housing out of the reach of many. So what options do we have? 

Option 1 would be to expand the Housing Choice Voucher Home Buyer Program to purchase single family 1 and 2 bedroom small homes for seniors, disabled, and small families. In 2021, 13,693 homeowners used Housing Choice Vouchers to purchase homes across the country. In the state of Wisconsin, 309 Vouchers were used to purchase a home. Those seeking housing are generally required to contribute 30% of their income. The 70% from the voucher program is not contributing directly to those most in need when used for rental payments.  Ten years of housing choice vouchers combined with the 30% contribution from the homeowner can cover the entire cost of an affordable home priced between $93,360.00 and $147,024.00. 

Option 2 would be to establish a home buyer grant program similar to the Neighborhood Stabilization Program II (2009). This program provided a $22,000 forgiveable grant to first time home buyers. It required the homeowner to remain in the home for 10 years with no repayment requirement. By creating a similar grant program that would provide funds to supplement the 30% contribution from the home buyer. 

Option 3 involves working with local banks and credit unions to begin the conversation on providing federally backed mortgages on the smaller homes. FHA and VA loans have no square footage limitation on stick built or modular homes. The only requirement is that the homes be marketable in comparison with homes of a similar size. By focusing on local lenders we continue to invest in the local community.