“Urban sprawl has triggered a global initiative to create affordable walking neighborhoods within cities that offer a variety of housing options close to employment, hospitality, and entertainment,” said Dirk Brown 90MBA, former president of the Emory Alumni Board and an outspoken advocate for the tiny house movement. “Construction trends have not kept pace with consumer needs for live/work/play neighborhoods, multigenerational living spaces, and reduced housing costs. One solution is to build smaller dwellings with better technology and construction design without destroying desirable neighborhood characteristics.”
“Goizueta Business School has committed to the strategic initiative of studying real estate and private equity,” said Roy T. Black, professor in the practice of finance and director of Goizueta’s Real Estate Program. Black commended the progressive thinking of Atlanta’s tiny home builders and urban planners.
However, he noted that “zoning, construction codes, and neighborhood resistance could be the major obstacles to gaining real momentum in the trend. In addition, lenders must become comfortable with lending on tiny homes and be convinced that they carry no greater risks than standard home loans.”
Brown agreed with Black that pushback from people who subscribe to the “not in my backyard” movement is real, with maintaining property values as their top priority. “Even so, we have to do better,” Brown said. “The intown zoning change to allow accessory dwelling units (ADUs) is a step in the right direction.”
Brown recently constructed a freestanding tiny home on his property in Virginia Highland. By the City of Atlanta’s definition, an accessory dwelling unit (ADU) like Brown’s is a separate access home of less than 750 square feet built on a foundation. Atlanta Zoning Ordinance Update Phase II now allows ADUs on or attached to properties within city limits to create vibrant corridors and districts. Other metro area zoning commissions are following suit. To guide and inform interested builders, the Georgia Department of Community Affairs has published the Tiny House Fact Sheet with important information to consider before embarking on construction.
“The Atlanta City Design is the framework for inclusive growth that Atlanta has been missing. Our next steps will translate directly into our new mobility plan, zoning ordinance changes, conservation and preservation efforts, housing strategy, and other tools and plans,” according to Tim Keane, commissioner for the Department of City Planning in Atlanta. “If built, this design will enable a new generation of growth to create an even better Atlanta for everyone.”
Public-private partnerships enable micro living
One of the Georgia Department of Community Affairs stated goals is “to leverage public-private partnerships to deliver affordable housing” while using the measurable objective to “fund development of affordable housing units proximate to jobs and community assets.” Here in Atlanta, Brown serves on the board of MicroLife Institute, a nonprofit dedicated to educating individuals, groups, and cities about the positive impacts of micro living.
“Historically, single-family zoning in cities has prohibited families from aging in place due to rising tax burdens as property values increase,” Brown said. “We study how we can create more density and reduce gentrification in our city and keep people in the homes and neighborhoods they have loved for years,” said Will Johnston, the institute’s executive director and innovator in the micro living world.
Black, a former real estate attorney, said that “manufactured housing, formerly known as mobile homes, is probably the best solution for the suburbs or exurbs, but 3-D printed homes and tiny stick-built houses get my vote for intown infill, or even tiny home subdivisions if you could find a parcel with enough acreage. An assemblage of four one-quarter acre houses and lots, demolished, would be enough to fit approximately 12-16 tiny houses, with changes in the zoning law.”
To demonstrate how the concept might work for Atlanta, MicroLife has embarked on the Cottages on Vaughan, a Clarkston one-half acre “microhood” that will feature eight tiny homes on permanent foundations ranging from 250 to 492 square feet. The homes will share a common greenspace and consolidated parking. “Pricing is market driven and homeowners will be able to purchase their own home beginning at approximately $109,000,” Brown said. “All aspects of the project will be transparent to educate consumers on the complete journey of tiny home construction.”
Traditional homebuilding includes “stick-built” on-site construction and prefabricated homes built in pieces or fully constructed off site. Shipping containers are being converted into living spaces, like the Gimlet urban container house in Atlanta. Now, 3-D printed housing is gaining global recognition as one potential solution to solving homelessness. ICON, an innovative home builder based in Texas, has inspired public-private partnerships in municipalities across the world to embrace the feasibility of 3-D printed home communities.
Black sees the potential in applying this same 3-D printing technology to new home construction on relatively flat lots in Atlanta. “Printed houses could work well in Atlanta as affordable housing if they are 30 percent less expensive than stick built homes,” he said. “We need to think outside of the big housing box, use existing and abundant materials as starting points, and use creative technology to solve the very real affordability and environmental issues we face today.”
Goizueta, private equity, and real estate
To prepare Goizueta students for understanding the issues, problems, and opportunities in real estate capital markets, a coalition of students and Professor Black started the Goizueta Real Estate Private Equity Fund in 2014 with $25,000 in donated seed money. “The Fund is student-run, and a board of approximately 25 students per year analyzes and recommends investments in Reg. D private equity syndications and real estate investment trust stocks,” Black explained. “Students must perform market research and financial analysis to decide which projects or stocks to buy. When the investments are made, the funds become part of Emory University’s endowment.”
Black added, “We want our students to understand all the ins and outs of real estate investing, development, and finance so they are ready for career paths that will put them in high positions of responsibility. Personally, I hope that many of our students will see affordable housing as a rewarding career path that will only grow in importance in years to come.”