Did tiny Boxabl find a solution for soaring housing prices? The short answer is “Definitely not.” But a longer answer is that just possibly, in a very tiny way, they may make a dent in it. A growing number of people are purchasing the company’s products. More important, some very influential people are watching it closely and just possibly may get actively involved.
Boxabl is privately-owned housing startup. The company makes very small, prefabricated homes that are delivered by truck and can be set up in a few hours.
These are obvious advantages, but the main selling point is their very low price. A model called the “Casita” has 375 sq. ft., just enough space to squeeze a full-sized kitchen, bathroom, and bedroom into one. Although the unit is very small, so is the cost: just $49,500.
Boxabl believes there is strong demand for low-priced affordable homes and is mass producing them to tap into that. Specifically, it wants to target the numerous people who are priced out of the housing market - not just those costing a million dollars and more, but also those costing a few hundred thousand. In addition to the Casita, the company also makes several other models that vary in size, features available, and price. All, however, are small and designed to be affordable.
“Popular products like iPhones, cars, and sneakers are low-cost and high quality because they are mass produced in factories using assembly line principles,” says company co-founder Galiano Tiramani, “But until now, this approach has not been introduced into housing. We have engineered a system compatible with factory mass production that can (make homes) faster and at a lower cost than anyone has ever done before...We think we could solve a lot of problems and dramatically lower housing costs for the whole world.”
Be It Ever So Humble
In general, prefabricated homes are much less expensive than conventional houses (although some are surprisingly pricey). Since Boxabl is targeting the lower end of this market, only basic features are included, so the units are practical but not luxurious or fancy. For example, only a few cabinets are included, and the 4 ft. x 8 ft. laminate sheets that cover countertops are very simple and cost just $65. (By comparison, quartz countertops would have been much more aesthetically appealing, but they cost $53 per sq. ft. and were rejected because they would have jacked up the price by a prohibitive amount.)
For the same reason, the company has not covered the very visible hinges on the ceilings, which allow the units to be folded and transported easily. Boxabl’s approach is that things like cabinets, countertops, and ceilings could be upgraded at a later time, but the immediate objective was to use less expensive options to keep the price low.
These cost-saving measures certainly will not suit everyone’s taste. However, other pre-fab home makers also cut corners to hold costs down. Despite their simple appearance, many people want to purchase them.
The Casita and other Boxabl models are usually sold as stand-alone units. Some customers, however, purchase more than one to get additional space. Boxable homes start out at around 400 sq. ft., but when two units are combined, the number of sq. ft. increases to 800, making it comparable to - or larger than - small apartments. Three or more units can be combined to make them larger still and look more high-end.
The idea of purchasing a home for $50,000 - however small it may be --certainly strikes a chord with people of modest means, which include some first-time home buyers, retirees, and many people in between. However, they also could appeal to those interested in owning a second home, a summer home, or a guest house.
“Because we wanted a system that will work anywhere on the planet, we engineered it for all different climates and to withstand all kinds of issues, such as strong winds in Florida and earthquakes in California,” says Tiramani. Boxabl thinks potentially there could be a large market for its homes in California and other areas.
It should be noted that the $50,000 sticker price is not the final cost because it doesn’t include setting up plumbing and electricity, which likely will amount to several thousand dollars. Nor does it include a much higher cost – land, which could add many thousands more, particularly if purchased in a large urban area. Nevertheless, it’s still more affordable than almost anything else out there.
Long Waiting List
There also could be other sources of demand. Some have suggested that small, low-cost homes like the ones Boxabl sells could be used to address the homeless issue, which is a problem across the country.
Boxabl’s homes are made in what is claimed to be the world’s most advanced housing factory, having the capacity to produce 3,000 - 4,000 homes per year. This may sound significant, but with 40,000 people on a waiting list it doesn’t come close to satisfying demand.
Boxabl homes also could be used for other purposes. For example, they could serve as hospitals in disaster areas, store emergency supplies, or serve as classrooms. And since they can be set up so quickly, they can provide temporary shelter, rebuild communities or develop new ones, for retailers, offices or other purposes. The government recently ordered 156 homes.
In the beginning of July, Elon Musk tweeted a message that shocked his many millions of followers. The second richest person on the planet said that he lives in a $50,000 Boxabl Casita. This sparked speculation that his real interest the Casita was to get a better “feel” for living in a very low-priced home, come up with ideas to improve it, and in theory use this knowledge to move Tesla into the low-cost home construction industry - which could become humongous.
Musk hasn’t said or even hinted anything along these lines. Nevertheless, his tweet made some people wonder about a possible Boxabl-Tesla connection. Adding to this is a video on the company’s website, which shows Boxabl units used in setting up a community on Mars - a project Musk speaks about frequently.
The skyrocketing prices of homes, the many millions priced out of this market, the low cost and durability of Boxabl’s models, and the increasing problem of homelessness all point to the need for more reliable and low-cost housing.
Whether a solution to this problem comes through Boxabl, other modular home makers, or from completely different sources, this issue is in the spotlight and will have to be addressed. Investors who find the right opportunities will be handsomely rewarded for their efforts, whether there is a Musk/Tesla connection or not. Don’t be surprised to see more automated home factories springing up in the near future. This is an idea whose time has come.
Sources: bloomberg.com; insider.com; YouTube: Elon Musk’s $50,000 Modular Will Start The Next Big Affordable Housing Trend; Full Home Unfolds in 1-hour, Kitchen and Bathroom; A Look Inside a $50,000 Foldable Tiny House