Moving Into a Shipping Container, but Staying Put

Living in a shipping container? It’s not something Scott Crosby had imagined for his family of five.

But they’re about to have the experience this month when Mr. Crosby’s family moves from San Francisco to their former hometown, San Diego. They will be living in a small beach bungalow they own — three bedrooms and one bathroom packed into 1,100 square feet — which isn’t a lot of space for a couple with three young daughters.

That prospect led Mr. Crosby, 45, who started a software company that was bought by Google, to the shipping container. He was looking for an affordable way to add space to the house, which has a large backyard, when he saw a photo in a magazine of a small home made from a recycled shipping container. It was manufactured by Montainer (rhymes with container) in Missoula, Mont. “I thought that would be perfect for us,” said Mr. Crosby. “So I pulled the website up on my phone and ordered one. It was dead simple.”

Mr. Crosby put down a $2,500 deposit for a $65,000, 24-foot-long, 8-foot-wide container that will provide his family with an extra bedroom, living room, bathroom and kitchenette. The container is made of Corten steel, which is marine-grade, corrosion-resistant and so tough it is used to build bridges and ships.

Mr. Crosby said the simplicity of the ordering process was ultimately what sold him on the home. “I don’t have to make any decisions about the layout, the appliances I need or about the permitting,” he said. “I just clicked a button to buy and that was it.”

Montainer is a start-up capitalizing on the “tiny house” movement, which is driven by people who want to live smaller, more simplified and less environmentally impactful lives. Ryan Mitchell, creator of TheTinyLife.com and the Tiny House Conference, said the popularity of these homes was also being driven by people who needed housing that was more affordable. Nearly half of the renters in the United States spend more than 30 percent of their income on housing, according to Harvard University’s Joint Center for Housing Studies. The homeownership rate nationally is 64.5 percent, and 2014 was the eighth consecutive year the rate has fallen.

The Tiny House Conference, which began in 2014, drew 400 people this year, more than double last year’s attendance. “I do think the interest is more than just a response to the recession, because if that was the case, my numbers would have dipped,” Mr. Mitchell said. “But since the recession my website traffic has quadrupled. I’ve got millions of visitors a year.”

At Wheelhaus, a Jackson Hole, Wyo., company that has been making custom tiny houses since 2007, revenue has tripled in the last three years, said Jamie Mackay, the owner and founder. Its houses are 400 to 1,500 square feet and cost $89,000 to $295,000.

Montainer started in 2013 when Patrick Collins, the chief executive, and the company’s other founders, Thomas Finch, Joel Egan and Matt Duguid, created a Facebook page and a website. That first year the site received 1,200 inquiries from potential buyers. “The website has had about 12,000 unique visitors a month since then, and we also have 50,000 followers on Facebook,” Mr. Collins said.

A Montainer home comprises one or several recycled containers, which the company calls modules, and it offers about 10 configurations. Modules come in many sizes, but are generally 20 or 40 feet long. Both lengths are 8 feet wide and 9.5 feet tall. The 20-foot shipping container has 160 square feet of space, and the 40-foot container has 320 square feet. The inside is designed either to be a complete home or a component of a home (one module, for example, might be a bedroom, living area and bathroom). Customers wanting larger homes can fit several modules together like Lego blocks, Mr. Collins said. Montainer will produce 15 homes this year and, based on preorders, 30 to 50 next year.

The most common order is the one-module home. Most of Montainer’s clients are on the West Coast, in markets where housing is very expensive, like in Seattle and the Bay Area.

Because the majority of tiny homes in the United States are made from wood, using recycled materials gives Montainer’s homes a cachet. “I love the fact that they are taking something that’s been discarded and finding a new use for it,” Mr. Crosby said.

Homes made out of shipping containers aren’t common, but have been done before. Keetwonen, a housing project of shipping containers in Amsterdam, was built in 2006.

Unlike tiny homes from other companies, Montainer houses lack wheels. Wheels allow owners to essentially park their homes where they can, said Derek Diedricksen, founder of the tiny home company Relaxshacks and author of the coming book “Microshelters.”

Montainer’s homes are installed on a foundation and must meet local building code and permitting requirements. The permitting process can be arduous, so the company realized that to be successful it would have to handle that process for customers. Mr. Collins said Montainer’s homes also met building code requirements for nearly every jurisdiction in the United States, for single-family homes and accessory dwellings. (If permits cannot be secured, the customer’s deposit is refunded.) Houses are built and delivered fully permitted and ready to be installed.

Financing is another problem. Montainer wants to sell its homes to mainstream buyers who otherwise could not afford to buy a house, but Mr. Collins knows that won’t happen until his customers can obtain mortgages. But traditional bank loans generally aren’t available for tiny houses because of the their size and the newness of the market. So Montainer’s customers have had to pay in cash, with some using home equity loans, which limits the market.

“Many lenders won’t do a home loan for anything less than $100,000 because it’s not profitable,” said Greg McBride, chief financial analyst at Bankrate.com. He said loans for tiny homes also could not be securitized — where the lender sells the loan to an investor as part of a mortgage-backed security. “These homes are too small and unconventional to do that, so the bank bears all the risk for a property,” he said. “That also means if the loan isn’t paid, the bank can’t count on selling the property to recoup, because the market for the home isn’t well established.”

Mr. Collins said Montainer was in talks with a few credit unions in Montana and Washington State to provide financing to customers.

“We know it’s going to take time for these kinds of homes to gain acceptance from the standard mortgage underwriting market, but as clients buy and then resell them, that will change,” Mr. Collins said. “And right now, anyway, there’s no shortage of people willing to buy one with cash.”