LIVIN’ LARGE

Oak­land startup takes a mi­cro ap­proach to max­i­mize hous­ing

The Mercury News Weekend - - FRONT PAGE - ByMarisa Ken­dall mk­endall@ ba­yare­anews­group.com

OAK­LAND » When en­tre­pre­neur Luke Ise­man looks at the­mas­sive stacks of red, blue and gray ship­ping con­tain­ers that loom over the Port of Oak­land, he imag­ines an end to the Bay Area’s hous­ing short­age.

With the cost of rent­ing and buy­ing con­tin­u­ing to soar, Ise­man’s Oak­land startup is find­ing creative ways to turn cold, cor­ru­gated steel con­tain­ers into cozy homes.

Con­vert­ing a ship­ping con­tainer into a liv­ing space can be much cheaper and quicker than build­ing a tra­di­tional house, and pro­po­nents en­vi­sion vil­lages of these box homes — or tow­ers of them stacked like apart-

ments — of­fer­ing a fresh sup­ply of lower- cost hous­ing. There’s also po­ten­tial for a lu­cra­tive busi­ness model, us­ing the box homes as Airbnbs or other tem­po­rary rentals.

But ques­tions re­main about where res­i­dents can put their boxes, and whether city of­fi­cials will ap­prove the al­ter­na­tive homes — un­der­scor­ing the dif­fi­culty of solv­ing the hous­ing cri­sis.

“These are su­per funky and not for every­body,” said Ise­man, the founder of startup Box­ouse. “But we have to do some­thing.”

Ise­man’s artsy, in­dus­trial con­tainer homes are just 160 square feet — big enough for a full-size bed, a small ta­ble and chair, a toaster oven, hot plate and kitchen sink, and a tiny bath­room. They come with a front door and one win­dow, and are in­su­lated with sprayed polyurethane foam, a yel­low goo ap­plied be­tween the con­tainer shell and its in­te­rior ply­wood walls.

Ise­man sells the homes for any­where from about $8,000 for a bare- bones model to $ 50,000 for a fully loaded ver­sion com­plete with so­lar power, wa­ter and a mini sep­tic tank. So far he’smade al­most two dozen, many of which he’s sold to friends or rented to ten­ants.

Tiny homes like the ones Ise­man is build­ing have be­come trendy in re­cent years as peo­ple look to down­size and cut costs.

But so far, Bay Area zon­ing and per­mit­ting rules largely have not em­braced in­no­va­tive hous­ing ideas like con­tainer homes — some­thing San Francisco en­tre­pre­neur Den­nis Wong learned the hard way.

He had his own dreamof us­ing ship­ping con­tain­ers to cre­ate im­me­di­ate, tem­po­rary hous­ing on empty lots, and bought a dozen con­tain­ers to build a three­story pro­to­type. Wong hoped San Francisco would treat his build­ing as a tem­po­rary struc­ture, like a food truck. But the city in­stead forced him to go through the stan­dard per­mit­ting process, whichWong feared would take years.

“They use his­tory for their frame­work of how to build cities,” Wong said, “and that’s a prob­lem for in­no­va­tion.”

So he aban­doned his plan and moved the con­tain­ers in­side a warehouse in San Francisco’s SoMa neigh­bor­hood, where he plans to open a small mar­ket with restau­rants and shops — treat­ing the con­tain­ers as in­te­rior rooms rather than stand- alone build­ings that need per­mits. Two of the con­tain­ers have been turned into a mini of­fice space, which Wong’s startup, Camp­syte, rents out for $53 an hour.

Ise­man, a for­mer ad­viser at pres­ti­gious startup ac­cel­er­a­tor Y Com­bi­na­tor, plans to sell his box homes to peo­ple who will set them up in their back­yards, rent them out on Airbnb, and di­vide the pro­ceeds with Box­ouse. But in the long term, he imag­ines a utopia in which vil­lages of box houses take over Oak­land’s aban­doned lots, help­ing to end home­less­ness.

So far none of Ise­man’s box houses are le­gal in Oak­land, some­thing he hopes to change by ap­ply­ing for per­mits this month. City lead­ers, frus­trated by grow­ing tent vil­lages un­der over­passes and in pub­lic parks, have ex­pressed in­ter­est in al­ter­na­tive hous­ing.

“Any­thing that has the po­ten­tial to solve our grow­ing home­less­ness cri­sis is worth ex­plor­ing,” Oak­land Coun­cil­woamn Re­becca Ka­plan said of Ise­man’s box homes.

As an ex­per­i­ment, the city is work­ing with a group dubbed The Vil­lage to set up tiny homes on city- owned land and cre- ate an im­promptu home­less shel­ter. City lead­ers voted last month to push for­ward with the project, af­ter iden­ti­fy­ing a hand­ful of po­ten­tial lo­ca­tions. The Oak­land City Coun­cil also re­cently de­clared a “shel­ter cri­sis,” which re­laxes zon­ing and per­mit­ting rules to make it eas­ier for builders to con­struct hous­ing for home­less or at-risk res­i­dents. That move could help Ise­man make his con­tain­er­home vil­lage a re­al­ity.

So far, Oak­land hasn’t wel­comed Ise­man’s vi­sion, and twice has forced him to re­lo­cate his clus­ter of box houses. He orig­i­nally set up in a va­cant lot he leased on Man­dela Park­way in West Oak­land, but was told he didn’t have the proper per­mit to park his homes there. (In a turn of events that seems to epit­o­mize the neigh­bor­hood’s gen­tri­fi­ca­tion, the lot later be­came a doggy board­ing house, train­ing fa­cil­ity and spa). Ise­man then moved his homes to an­other lot in West Oak­land that he pur­chased with friends, but was ul­ti­mately warned by the city that he had two months to get out, or face fines of more than $1,000 per day.

His new digs — a West Oak­land warehouse and an­other nearby lot full of con­tainer houses — are ob­scured be­hind large fences, hid­den fromthe eyes of city of­fi­cials who might ob­ject.

Ise­man is work­ing to set up his first le­gal box house in Oak­land, and ex­pects per­mits will cost be­tween $3,000 and $5,000. He hopes the home will be ap­proved as an “ac­ces­sory dwelling unit,” or “in­law unit” un­der a law Gov. Jerry Brown signed last year to make it eas­ier for home­own­ers to set up and rent out small apart­ments or cot­tages on their prop- erty. But new rules Oak­land laid out in re­sponse to the law say those in-law units must be rented for at least 30 days at a time, which es­sen­tially means no Airbnb rentals. That could pose a prob­lem for Ise­man’s busi­ness plan, but he’s not par­tic­u­larly wor­ried — he doesn’t ex­pect the rule to be en­forced.

One re­cent af­ter­noon, Ise­man was wait­ing for an Airbnb guest who had booked the night in one of the con­verted ship­ping con­tain­ers parked out­side his West Oak­land warehouse on a lot that’s zoned for light in­dus­trial use, which­means guests tech­ni­cally aren’t al­lowed to sleep there. In­side the con­tainer, Ise­man had left a stack of clean tow­els folded neatly on top of a tiny set of draw­ers.

The unit cost him less than $10,000 to build, and he’s al­ready re­couped his costs this year by rent­ing it out for be­tween $40 and $120 a night.

“Peo­ple very much ei­ther love it or hate it,” Ise­man said, of his Airbnb guests. “Which I’m fine with.”

ARIC CRABB — STAFF PHO­TOS

A ship­ping con­tainer that has been con­verted into a small house basks in the Oak­land sun. “These are su­per funky and not for every­body,” says en­tre­pre­neur Luke Ise­man. “But we have to do some­thing.”

Luke Ise­man of Box­ouse sits in­side a ship­ping con­tainer that he con­verted into a small house at his work­shop.

ARIC CRABB — STAFF PHO­TOS

Startup Box­ouse con­verts ship­ping con­tain­ers into col­or­ful, tiny homes of 160square feet.

Luke Ise­man makes plans for his first le­gal box house in Oak­land, es­ti­mat­ing per­mit costs of $3,000to $5,000.

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