Dome Rentals: A Much Needed, Profitable Project
“If you build them, they will rent.” David B. South has been saying that since mid-2000 when the company first began planning the building of an experimental complex of dome rentals.
- Monolithic Dome rentals are designed and built to solve housing problems. Traditional construction does not help a huge portion of our population. Two thirds of all those who rent housing in America are one or two persons to a household. Of those, 40% make less than $10 per hour. They live on the edge, they need help, and it cannot be furnished with traditional housing.
- Traditional housing and traditional rentals are built for families. Some are smaller for one or two occupants, but most are not. Traditional rentals are built using HUD guidelines for room sizes and construction. They have traditional power bills, fire hazards, and in a word are traditional.
- For some time now, the hotel industry has been aware of the need for extended stay units. They are everywhere. Many are high-end and serve as retirement hotels. Many are motels in less than desirable condition in out of the way locations. But they are not designed for extended stay; it just works that way. In general, most of these units are expensive to heat and cool. Their fixed costs are relatively high and passed into the rent prices.
- In a few places, SROs (Single Room Occupancy) have been built or converted from other uses. These are the modern equivalent of the Boarding House. SROs are often found in large cities, such as Chicago and New York. Most were not designed as SROs but converted from hotels or old office buildings. They suffer from high fixed costs.
- On a first-cost basis, Monolithic construction is more expensive than traditional rental unit construction. Therefore, it cannot help in the low-cost arena based on size. So we decided to look at the sizes and uses of low-cost housing. As most of us know, the U.S. market has gone crazy with building bigger and bigger and bigger. Large sizes have been institutionalized. Only in America do we build homes in halves. One half is used during the day and the other during the night. Why? Because we can and have been able to for decades. But we must rethink this tradition. The need for affordable housing for all segments of our society is great, and we must provide it.
- Who are the Americans who need less expensive housing? They are the HIDDEN. Where are they hiding? In plain sight. For fun, try an experiment. For the next few days, count all the people you see and/or interact with in the service sector. They are cashiers, waitresses, cleaning personnel, delivery and store clerks, janitors, lawn and landscape workers, students and on and on. Make a count; it will astound you to see that they make up a huge portion of our population. They are honorable, great people – your sons and daughters, cousins, parents, newlyweds, etc. They need a clean, safe, secure place that’s affordable at their income level.
- So we decided to write its own construction guidelines. Years ago, the United Nations published a guideline for world housing. It called for a habitation to have 28 square meters (302 square feet) of space for a family. The Chinese use one ping (6′ × 6′) per person. These are small spaces, but when properly designed they work well in the developing world. Originally, we decided that one or two people could get along well in 314 square feet. We later revised that to 200 square feet for even more affordability. These sizes do not work under traditional home guidelines, but they do under hotel/motel guidelines. Hence the plan to build extended stay hotels, motels, or cabin camps. We now have 125 of these renting and another 14 under construction. Most of the time, we have a long waiting list of potential renters.
- In the past, rental units were made affordable through government programs, subsidized rent, Section 8 vouchers, subsidized interest, etc. We decided to forgo government participation. Petite (small and nice) units can be constructed and rented affordably. By using Monolithic technology, maintenance and utilities can be kept to a minimum. The useful lifespan of Monolithic structures is long, so their amortization (lack of depreciation) helps keep them affordable. And they are the safest buildings on the planet. Their small size keeps tenant damage to a minimum.
Project I: Studio Street
In February 2001, Round Flats, Inc., opened its first rental facility: Studio Street. Its 17 units include furnished Monolithic Domes with diameters of 16, 20 and 25 feet that provide living space for not more than two adults and a child and even smaller Monoquads designed for just one person.
“The idea that governed the whole planning of Studio Street and really became our goal was to provide clean, secure and most importantly affordable housing for low-income individuals,” David says.
That idea or goal came about because of media reports and information on the Web about the growing, nationwide shortage of affordable housing. People particularly affected, in both rural and urban areas, included single men and women with minimum wage jobs, single mothers, senior citizens with inadequate or no pensions, and victims of work layoffs or company downsizing.
As this crisis grows, it generates more concern and more reports, so that now our federal government, virtually every state and many cities have websites with information about their housing shortage and what, if anything, they are doing about it.
Texas, especially its small towns in rural areas, was no exception. In some places, cheap motel rooms that were neither clean nor safe, were rented on an almost continual basis. “Obviously the need was and still is there,” David says.
Consequently, rental fees at Studio Street were made truly affordable. They range from $95 per week for the smallest Monoquad to $150 per week for the largest dome — utilities included.
But despite its low rental fees, Studio Street consistently shows a profit!
The property manager, says, “We quickly had a waiting list for Studio Street. Vacancies are rare. The units do not remain unoccupied for any significant length of time.”
Project II: Secret Garden-Italy
Experience with Studio Street spurred the establishment of Secret Garden-Italy, an equally successful, gated complex of four, 20-foot diameter units in the center of the small, rural town of Italy, Texas.
Project III: Secret Garden-Morgan Meadows
The largest project, Secret Garden-Morgan Meadows, is a complex of 48 Io-20’s, 16 4-plexes, and 4 cabins. Each Io-20 provides 314 square feet of furnished living space. The overall design of the complex calls for groups of cottages in a garden-like setting. And since America’s housing shortage is far from over, Secret Garden-Morgan Meadows also provides clean, secure accommodations at reasonable rates and is profitable.
Project IV: Rentals in Dawson
Such rentals are now underway in Dawson, Texas. Eighteen are now completed and rented.
How the Rentals Work
Round Flats, Inc. rentals are classified as residence inns. For the first 30 days of occupancy, they therefore operate under motel, hotel or inn rules rather than apartment rules. This classification has some important advantages. For example, renters at a residence inn can pay their rent weekly, instead of monthly. Unlike apartments, there is a smaller demand for deposit and security fees, making it far more affordable and easier for the renter.
Round Flats, Inc. asks for three weeks up front: two weeks rent plus a one week deposit that’s returned when the renter moves if there are no damages. If the renter has lived in the studio less than 30 days, hotel rules apply. However, in Texas, after thirty days normal apartment rules apply. These rules varies from state to state.
Units include a bathroom with shower, basin and toilet; a kitchen with stove, refrigerator, table and chairs; a bed; heating and air conditioning.
Renters at Studio Street and Secret Garden-Italy are asked to pay their rents on a weekly basis. Rent is due every Monday. They can pay by check, cash, or credit card in person, through a dropbox at the rental office, or via an online tenant portal.
No waiting list is maintained. It’s first-come, first-served. We rarely have a unit remain empty for long.
We run a background check on each renter. We do not rent to anyone that has had a felony in the past 5 years and we do not rent to sex offenders. We ask about evictions and for references.
Renters are asked to give at least 48-hours notice before leaving.
The rental agreement lists 28 specific rules that all renters are required to follow.
“So far,” the property manager says, “our biggest problem has been smoke odor.”We allow smoking in units designated as smoking cottages. But the smoke does leave an odor that necessitates using a cleaning-deodorizing solution called Odor Killer to wipe down the cabinets and walls. No smoking is allowed in the 4-plexes.