The search for affordable housing in the US is becoming critical as rents soar and home ownership becomes more of a distant dream than a reality for millions of people.
With inflation continuing to pinch and a shortage of available houses, younger Americans are looking for alternatives to traditional accommodation, from sleeping in bunks, to “tiny homes”, to ad hoc dwellings erected on a larger property.
Perhaps the most vivid illustration of America’s housing crisis is the growing popularity of “pods” — small rooms often furnished with only a bed — in expensive areas such as Palo Alto, one of the main cities of California's Silicon Valley.
Pods owned by Brownstone Shared Housing are 2.4 metres tall and include a bed, foldaway desk and a charger for electric gadgets, with access to a communal area that has other facilities including a bathroom and kitchen.
The cost? About $500 a month.
Christina Lennox, one of the company’s founders, says the idea came from her own experience of trying to find somewhere to live.
“I moved out to California from Arizona to attend a church leadership college,” Ms Lennox says. “We received housing. After college ended, I was on my own and was going to go homeless.
“Palo Alto is one of the most expensive places to live in the world. The rents are more than double we are charging, even for a studio.”
Ms Lennox points to the difficulties faced by people moving to the area to work for local businesses. Pod tenants are chosen in part for their compatibility rather than the size of their wallets, she says.
“The category they fall into is young professionals, 20s to mid-30s. We have culinary interns, a Tesla employee, we had a poet, Stanford researchers and teachers.”
As Ms Lennox stretches out on one of the pods, she says it is far more comfortable than a bunk bed.
She hopes the company will go national and even international, looking at cities such as London experiencing a similar housing crunch.
Similar projects are popping up in New York, San Francisco and Los Angeles.
The rise of pods and other alternatives is taking place as a generation already struggling with student debt now faces a housing shortage and soaring costs.
Emaar Properties: real estate across the UAE — in pictures
“Millennials are competing for mid-priced housing and what use to be called 'starter homes' with institutional investors who are turning traditional homeowner properties into rental property,” says Robert Silverman, professor in the department of urban and regional planning at the University of Buffalo.
“All of this activity puts additional upwards pressure on housing prices and rents.”
Residential rents in the US increased by an average of 15 per cent last year, double the rate of inflation in many parts of the country, In increasingly popular spots such as Austin, Texas, the figure was 40 per cent.
“The affordability crisis is worsening and it’s increasing up the income spectrum,” says Caitlin Sugrue Walter, vice president of research at National Multifamily Housing, the trade association representing the apartment industry.
“People who are well off now can’t afford to buy but they have considerable renting power, which is driving the market up,” she tells The National.
Then there is the shortage of supply, as house building has yet to recover from the 2008 crash.
“We estimate we need to build 328,000 [homes] a year to keep up with annual demands Ms Sugrue Walter says. "We have had a decade of underbuilding ... we are running at full capacity and it is still not enough.”
The pods are only one way in which the US is trying to square the circle of soaring demand and affordability: “tiny homes” are also gaining in popularity.
The idea is hardly new. The movement dates back to the mid-19th century and the publication of On Walden Pond by David Thoreau, the first great experimenter in small-space living.
It came into vogue in the 1970s as part of the counterculture movement, with pioneers such as Lester Walker citing Thoreau as an inspiration. By the end of the century, it was boosted further by Jay Shafer, who wrote The Small House Book in 1999.
But it was the 2008 financial crash that provided the impetus for living smaller, as families struggling to pay their mortgages downsized.
Tiny homes are rarely bigger than 500 square feet — about a fifth of the size of a normal family house.
They come with a much lower price tag, costing up to $75,000 — a fraction of what a buyer would pay for a conventionally sized dwelling.
They even come with a chic cachet, with Elon Musk renting one in Texas while working on SpaceX.
The other option is what Americans call an ADU, or Accessory Dwelling Unit, which is built on the land of an existing home.
These come in an array of shapes and sizes, from converted garden sheds to granny flats. And like tiny homes, they cost far less than a normal house, Even on the expensive Pacific coast, the price tag can be as low as $116,000.
But planning laws in some areas can thwart the construction of ADUs. In the last election, former president Donald Trump campaigned to protect the suburbs against cheaper housing developments, indicating that the ADU movement is likely to have to battle political headwinds.
Prof Silverman is sceptical about the viability of large-scale development of pods and tiny homes, believing they are attracting interest because of media hype.
“Auxiliary units may have a little more promise,” he says.
“They are basically studio-style units built on the lot of an existing home. They are more cost-efficient since they have smaller square footage, but that also limits them as an option to only small households.”
However, smaller households are becoming more of the norm, In 1960, the average US household averaged 3.33 people. Last year it had shrunk to 2.51.
And so, as prices rise and households shrink, these alternative housing forms might be the way of the future.
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
How the bonus system works
The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.
The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.
There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).
All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.
Global state-owned investor ranking by size
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China
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UAE
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Japan
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Norway
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Canada
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Top financial tips for graduates
Araminta Robertson, of the Financially Mint blog, shares her financial advice for university leavers:
1. Build digital or technical skills: After graduation, people can find it extremely hard to find jobs. From programming to digital marketing, your early twenties are for building skills. Future employers will want people with tech skills.
2. Side hustle: At 16, I lived in a village and started teaching online, as well as doing work as a virtual assistant and marketer. There are six skills you can use online: translation; teaching; programming; digital marketing; design and writing. If you master two, you’ll always be able to make money.
3. Networking: Knowing how to make connections is extremely useful. Use LinkedIn to find people who have the job you want, connect and ask to meet for coffee. Ask how they did it and if they know anyone who can help you. I secured quite a few clients this way.
4. Pay yourself first: The minute you receive any income, put about 15 per cent aside into a savings account you won’t touch, to go towards your emergency fund or to start investing. I do 20 per cent. It helped me start saving immediately.
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%3A%3C%2Fstrong%3E%20Eco%20Way%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20December%202023%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Ivan%20Kroshnyi%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Electric%20vehicles%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Bootstrapped%20with%20undisclosed%20funding.%20Looking%20to%20raise%20funds%20from%20outside%3Cbr%3E%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
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%3Cp%3EDirector%3A%20Khalid%20Fahad%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Shaima%20Al%20Tayeb%2C%20Wafa%20Muhamad%2C%20Hamss%20Bandar%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
2021 World Triathlon Championship Series
May 15: Yokohama, Japan
June 5: Leeds, UK
June 24: Montreal, Canada
July 10: Hamburg, Germany
Aug 17-22: Edmonton, Canada (World Triathlon Championship Final)
Nov 5-6 : Abu Dhabi, UAE
Date TBC: Chengdu, China
End of free parking
- paid-for parking will be rolled across Abu Dhabi island on August 18
- drivers will have three working weeks leeway before fines are issued
- areas that are currently free to park - around Sheikh Zayed Bridge, Maqta Bridge, Mussaffah Bridge and the Corniche - will now require a ticket
- villa residents will need a permit to park outside their home. One vehicle is Dh800 and a second is Dh1,200.
- The penalty for failing to pay for a ticket after 10 minutes will be Dh200
- Parking on a patch of sand will incur a fine of Dh300
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
RESULTS
5pm: Handicap (PA) Dh70,000 1,400m
Winner: AF Tathoor, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
5.30pm: Handicap (TB) Dh70,000 1,000m
Winner: Dahawi, Antonio Fresu, Musabah Al Muhairi
6pm: Maiden (PA) Dh70,000 2,000m
Winner: Aiz Alawda, Fernando Jara, Ahmed Al Mehairbi
6.30pm: Handicap (PA) Dh70,000 2,000m
Winner: ES Nahawand, Fernando Jara, Mohammed Daggash
7pm: Maiden (PA) Dh70,000 1,600m
Winner: Winked, Connor Beasley, Abdallah Al Hammadi
7.30pm: Al Ain Mile Group 3 (PA) Dh350,000 1,600m
Winner: Somoud, Connor Beasley, Ahmed Al Mehairbi
8pm: Handicap (PA) Dh70,000 1,600m
Winner: Al Jazi, Fabrice Veron, Eric Lemartinel
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
UAE currency: the story behind the money in your pockets
Profile of Udrive
Date started: March 2016
Founder: Hasib Khan
Based: Dubai
Employees: 40
Amount raised (to date): $3.25m – $750,000 seed funding in 2017 and a Seed round of $2.5m last year. Raised $1.3m from Eureeca investors in January 2021 as part of a Series A round with a $5m target.
more from Janine di Giovanni
Cracks in the Wall
Ben White, Pluto Press
