Pittsburgh-based cityLAB, which focuses on experimenting with economic development, has a new plan for addressing population decline in the city’s Garfield neighborhood.
The nonprofit wants to build a tiny house, the first in the city, to encourage would-be buyers who may lack the finances for other housing options. Tiny houses and micro-units are becoming more popular as people trade square footage for centrally located affordability in many U.S. cities.
On top of a recently announced grant from the city, cityLAB hopes to round out financing by turning to another trend: crowdfunding.
According to TribLive:
cityLAB announced Friday that it is preparing to start an online fundraising campaign to attain about $100,000 so it can build a 350-square-foot home on North Atlantic Avenue. It will be part of a larger crowdfunding effort the nonprofit is starting called Small Change.
The tiny house project has an overall price tag of $190,905, about a third of which is needed to prepare the vacant lot for construction. That includes a $49,000 grant from the city’s Urban Redevelopment Authority, a $27,500 grant from nonprofit Bloomfield-Garfield Corp., an $11,000 grant from nonprofit Neighborhood Allies and a $3,905 donation of kitchen and bathroom materials from furniture chain IKEA.
“Typically, a bank would finance the majority of a construction loan,” cityLAB writes on its website. “But since the Garfield tiny house is the first tiny house to be built in Pittsburgh, there are no comparables, and since there are no comparables, there is no established market. This is a problem for most banks.”
The site refers to Small Change as “one of a new breed of equity crowdfunding platforms,” and notes that the opportunity is open to accredited investors (that includes wealthy people, banks) only.
CityLAB hopes to sell the house for $99,500 and pay back the crowdfund investors with a small return.
The organization bills the project as “an exploration of living small as a potential driver of economic development.”
Regarding the city grant, an Urban Redevelopment Authority rep told TribLive, “We’d pay a consultant at least $49,000 to look at these issues [related to tiny-home development], so I think this is a worthwhile investment.”
Jenn Stanley is a freelance journalist, essayist and independent producer living in Chicago. She has an M.S. from the Medill School of Journalism at Northwestern University.