According to the World Bank and numerous think tanks, the world’s cities will become increasingly urbanized in coming decades, with accompanying challenges in finding affordable housing. A report by the McKinsey Global Institute predicts that 1.6 billion people worldwide will either be "financially stretched by housing costs" or be living in "crowded, inadequate, and unsafe housing."

McKinsey defines affordable housing as that requiring no more than 30 per cent of income.

Small, temporary, modular homes are one potential solution. Tim McCormick, a product designer in Palo Alto, California, has devised a concept he calls “Houselets,” described as “simple, mobile, modular building in available space.” The term Houselets borrows from the idea of parklets, which are small, temporary parks installed across one to three parking spaces.

According to McCormick, the concept arose from wondering what urban land was relatively cheap and available. Parking spaces and parking lots came to mind, as well as other idle parcels scattered around typical cities. Creating small, cheap, modular housing for those spaces has resulted in the Houselets concept.

In addition to the ability to use cheap available land, key features of this approach include:

  • Open source design: core features provide some standardization and accommodate each builder’s unique ideas. The homes could be factory built by a professional builder or built by the homeowner.
  • Modular design: a standardized structure can be built using common components, such as perforated steel tubing, then completed with a variety of roofing, cladding and interior systems.
  • Non-site specific and non-proprietary: modules can be moved, bought, sold, changed, and combined more efficiently than standard housing options. They’re highly adaptable to different sites and needs.

McCormick is building three prototypes using bolted-together perforated steel tubes for the structure. They’re designed to be installed off-grid, so they include composting toilets, solar power systems, and independent water systems.

Several ideas besides cost also factor into the Houselets concept. In developed countries, more people are single and want to live alone rather than with roommates. People also want to remain mobile, and fewer people own cars, which potentially frees up space formerly used for parking. Plus, technologies such as solar power and sanitary systems have become more functional and reliable, which makes it easy to deliver a small home that’s immediately liveable without grid connections.

Another small home option for expensive cities is shipping container homes. Though often existing without “official” zoning or building code approval, several builders are making headway in gaining that approval.

Luke Iseman and Heather Stewart fled their expensive apartment in San Francisco, rented an industrial lot in Oakland, California, and built a couple of homes from 20-foot shipping containers. Other alternative housing pioneers joined them and soon they all shared a sort of tiny home community. The cost of their lot rent, and the cost of each container, is less than their previous monthly rent. In addition, Iseman and Stewart started a company to sell plans, kits, and finished homes. Iseman said the price of a finished home would be less than $30,000.

Rather than avoiding the spotlight, Iseman and Steward courted media attention, knowing that it might attract building authorities who probably wouldn’t approve of the project. As Stewart wrote in her blog, “things done in secret do not work as engines for change.”

Just recently, the couple moved the containers to a different lot after the city shut down the project. Stewart noted that they are going through the formal permit process for site number two, and are looking at a minimum of $37,000 for needed permits.

Sydney, Vancouver, Hong Kong, and New York City all struggle with affordable housing. As a highly-urbanised nation with high housing costs, Australia seems like an ideal market for alternative buildings such as modular buildings and shipping containers. However, as in other countries, existing codes and zoning are often impediments to new ideas.

Many municipalities have minimum size requirements for homes, for example. As noted in this article, unnecessary concrete foundation work required by code added $8,000 to the cost of a Salt Lake City home. The concrete driveway and parking areas cost thousands of dollars more, and the city would not permit another container home on the site to help defray some costs. Until those codes and zoning are changed, non-standard, large-scale developments won’t happen.