This is the story about OBY House, a new organization that wants to lease a space in your backyard (for 99-years) and pay you $500 a month so that they can build a tiny house and rent it out to a qualified tenant long-term. Their mission is to create more affordable housing.
OBY will pay you up to $500/month if you let us build and rent out an affordable, sustainable, OBY House in your backyard.
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OBY House, Paying Homeowners To Build 576-sq.-ft. Tiny Homes in their Backyard, With 99 Year Lease Agreement!
They’re starting in California, and leasing backyards for 99 years. If the home sells, the lease transfers to the new owners with the same terms.
These tiny/small homes are built with wood construction and solar panels for increased efficiency.
This is OBY’s way of creating more affordable housing using tiny and small homes. They pay homeowners $500 per month while taking care of maintenance and finding tenants.
The floor plan includes not one but two bedrooms, so the house is ideal for families. What do you think?
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I don’t like it. It is the setting of a perfect nightmare television movie. Strangers, that you know nothing about and that answer to a remote authority to whom they pay rent and whom you never see, move into a home in your backyard, and soon there are 2 families living in the space for one, there is trash piling up everywhere or spilling out of many trashcans at the street. They have lots of company and end up usurping your part of the yard, maybe even your deck or patio. You discover that they have found a way to get into your house when you are not there and eat your food, use your bath (as they have so many people in their house that one bathroom is not enough), wear or take your clothes and other belongings bit by bit out of your house, but you can’t prove it, and you can’t step on their property (it is officially the property of the person who is paying you the lease money) to search for your things and maybe be able to call the police, and you can never get the person who pays you the $500 each month to call you back. It would be a nightmare existence, and in most states it takes up to 6 months to evict tenants, but wait! They are not your tenants, so you cannot evict them! The land officially belongs to the one who is paying you the lease money, and he is not going to evict them as long as he is getting the government subsidy payments for the rent (as he officially owns the property for the duration of the lease). So you get a lawyer to see if you can break the lease, but find that it is pretty iron clad unless you actually catch someone in the act of committing a criminal act. So you decide to sell your house, but who wants to buy a house with so many people in the backyard? Yes, this has all the makings of a scam and a disaster. My daughter-in-law is in housing management. I have heard all the nightmares for years, and I will tell you, this is a nightmare in the making.
Valid concerns, many well intentioned endeavors have failed for similar reasons. They seem to address some of them on their website, indicating they will work with each home owner to find the best tenant match.
So they will handle the screening practices, arrange interviews, and make sure that their outreach conforms to all anti-discrinimation housing laws. While availability is reserved for households making below 80% of Area Median Income (AMI) and prioritized for those filling essential service jobs (teachers, food workers, etc.) with long-established connections to the Bay Area.
Doesn’t address all concerns listed but there’s some indication they won’t let just anyone become a tenant and the home owner may retain some say… But would be better if they were more transparent about how it will all work and what assurances they can give the home owner…
Thank you for the information, James. Teachers and other educated and trained individuals would not fall into the below 80% of the median income category. I know because I was a teacher. It would be those who are not educated or trained to have a job or career that makes sufficient salary to live in the “real” world. I think there should be a stipulation that whoever lives in this housing must be constantly enrolled in college or training with the intent of receiving a degree or certification in a field in which they can get a good job. Then after getting that job, they would move out and let another family have the house. There should also be stipulations that allow the owner of the main house and property (not the OBY leaser) to evict any family who does not adhere to the constant training or who breaks any other stipulation that is in the contract with the owner. There would have to be many, many safeguards in place to protect the owner for this to come close to working. I still don’t like it.
Fair enough, and I agree that there should be safeguards. It helps no one if they leave themselves open to failure.
Though, for San Francisco, the Median household income is $96,265, middle-class income range $64,177 to $192,530 in that area… The average teacher income in the area is $61,062 but first 2 years it’ll only be $55,564, and then $57,464 for the 3rd to 5th year… So, it’ll take 6 or more years before a teacher makes medium income for the area… So new teachers at least may qualify… Add, many are dealing with college debt… Just to point out it isn’t quite that easy even with an education in some areas of the country…
Please delete this comment.
That’s remarkably privileged and offensive. I’ve been fighting my University for almost 3 years now because they claim I need to “re-matriculate” credits that were part of my original academic plan when I first enrolled.
They refuse to honor the commitment they themselves agreed to when I enrolled. And my case is not unique by any measure(currently over 200 other plaintiffs in my class-action alone. There are an estimated 400+ of these class-actions across the US currently).
Estimated 10% of all drop-outs are in fact completions defrauded by the university/college system.
Another 30% of all students who do not go to college simply can’t afford it, even with government and private sponsoring. The cost of housing in San Fran, San Diego, Etc. is literally second-highest in the whole country, and very close to highest in the western hemisphere.
This is not about “real world failures”. This is about profiteering and runaway capitalism. Like the Tulip Craze of the Low Countries, and the Stock Crash of 1929, and the real estate crash of 2008….
That they are!
Oh, no no no no no!
This is a horrible deal for homeowners, and a total trap. $500 is nothing for what they’re asked to give up, without even approaching the problem of selling their house when they get sick of having tenants. And really, that’s going to happen because they have no control. They get to have an “opinion,” but the predatory company “leasing” their space for “99 years” has all control over the building and the final say.
Even if the homeowner were only considering this because they’re in danger of losing their home, $500 a month wouldn’t help at all, especially in the Bay Area. They’re not even offering to adjust for inflation and changing property value over the years, or any equity whatsoever in a home that’s literally on your property–MAYBE, 100 years from now, whoever bought a crumbling old house with a shack in the back would eventually own it outright?
If you really want renters in your yard, then build a tiny home or buy an RV yourself. You’ll have equity, control, and the right to change your mind about whichever aspects of the arrangement you need to. You’d still be helping with the affordable housing problem in our country. The rental unit could be as large or as small as you like. You can choose to only rent to students, people w/o kids, etc. if you want to, and have a curfew in place, or a cap on guests/parties.
Seriously, even if you have to put up the capital for a tiny home or RV yourself, you will surely finish paying for it before 100 friggin years from now. And you’d get the full rent amount, not less than half. Jeez.
Anyone who qualified for this housing would also qualify for government aided college classes or training which, I believe, should be a mandatory for moving into a backyard house. Otherwise, who is it helping? The idea is to give a permanent address and low cost housing while working to get training for a career that would put one in a place to be able to move out and make room to help someone else, not to keep living off government aid. In that scenario, the owner of the main house would need to have safeguards and legal options to insure that this plan is adhered to. AS far as privileged, I held 2 or three jobs at a time to pay for my college because my family didn’t qualify for any loans, so my college debt was paid within a couple years after I graduated by my paycheck and my husband’s, not by any government aid (we were not that privileged), nor any wealthy relatives (there weren’t any), so it is rather prejudiced on your part to say my comment was “privileged”. Most of us work hard for what we have, it isn’t given to us by anyone, not even the government, so we are not “privileged” folk. There are some, however, who do need aid to make it to a place where they can stand on their own two feet. That is always the goal of aid of any kind–temporary and enabling the person to get to a place of financial independence. Therefore, education and training is a must have for this project to work.
Couldn’t have said it better. Amazingly stupid idea. Anyone that signs up for this is INSANE
Here is a link to matriculated courses versus non-matriculated sources.
Why should the government pay for classes that are not leading to a degree or certification that will help with employment? Government aid came into existence to help people train for jobs and careers so they could be financially stable. Choosing to take classes for any other purpose is a choice that an individual must pay for themselves. My taxes pay to help people become financial independent, not for them to take classes that do not lead to that end. However, this is not the forum for such a topic, so that is all I am saying on this here on this site.
I could find nothing on “rematriculation”, so without a definition I can’t understand your comment except that perhaps you mean that colleges are not granting degrees or certificates when you finish all your courses because some of your credits have come from institutions not from the states, and now they are requiring you to complete those courses again in their institute. Am I right? That is happening to a friend of mine in AZ right now. I finished 4 years of college at a school in NC, but because the college had no SACS accreditation, NC would not even recognize my degree and I have never been able to be certified to teach, even though I went back and picked up 76 hours of science and math at a SACS accredited college later, hoping it would tip the scales in my favor and I would at least be able to substitute, but it didn’t. I had to move out west away from my family to be certified and to teach. I am one of thousands who find themselves in the same situation, but nothing will change it because standards can be set by whatever institution, and we have to meet those standards to get what we want from those institutions. Perhaps your law suit can change this.
Yes this is a disaster waiting to happen. I can’t even get a druggie who moved in my Dads house out cause she said she’s a caregiver! But no papers to prove it or drug test! Already stealing things off the property a car was stolen
Sir: Sounds like you are very knowledgeable on this subject and what you state sure sounds like it could easily happen.
This is ok, but the idea of letting someone build a home in our backyard don’t fit right. I like my privacy and I am in CA. I wouldn’t know those people and that would really make me feel uncomfortable. You never know these days. It is a volatile time right now. CA is a state that infringes on us enough. Sorry but is how I feel. I don’t like intrusions.
I agree with all 3 comments so far. But what I suggest is State, The Government donate land for this GREAT IDEA as well it would be nice if the wealthy would perhaps do so as well or if someone that has land to donate it or even a portion of it; that would be awesome. Thank you OBE.
My idea is just what I plan to do if I ever gained wealth; it fits the love for people I have in my heart. I had less than a month started sharing my idea with others. So, in Jesus name wealth come to me now; can I get someone to touch and agree with me?
I agree with you 100 percent if l had a house l would do that some good to me.
I agree. . .
I agree 100%. Our govt has a lot of land that is usable for this.
I agree with the need for affordable housing and applaud the attempt, but I agree it is a nightmare in the making for the homeowner. Perhaps there could be enough legal jargon put into the lease agreement to protect the homeowner, but then again, it is just a piece of paper and probably difficult to enforce. I’d pass.
Sounds like a money maker for a slum lord. A nightmare waiting to happen. Three parties involved in your, so called, low income housing.
I’m Gloria Hope from Michigan, and I approve!! I think this is a brilliant idea especially in the times we’re living in today! Brilliant!
So glad you’re into it!
I like the idea but for relatives only, for example as an in law suite or for a young couple or family starting out. I would prefer that the house be on wheels so it can be mobile so that the arrangement can be changed if needed. Strangers living in the back yard could be scary, especially in this day and age.
It’s the 99 year lease for me that is the most absurd! Even if you are fortunate enough to get the ideal tenants every single time money is the motivated here. Property values will change every year. $500 for 99 years will eventually seam like pennies. This will be a part of your property you will never be able to enjoy again. In Washington state they are starting the same type program providing permits and home plans where you can have a modest sized home built on your lot but after that it is yours to deal with how you wish. Another program offered a 5 year lease to put a tiny home on your lot to house a needy family. After 5 years the tiny home is yours. I have not heard of any volunteers to comment on success or failure. For me…no to the 99 years!
I think you would be better off doing smthg like this by yourself, without a middle man/third party. Granted your backyard is big enough. This way, you’d have a ve complete control of the situation, especiallly if you needed to evict the tenant(s). Who you put back there, all that good stuff. I’d separate the yard if its big enough so each household, has it’s very own, with bushes, palms, wtvr, a 6ft. cement or pvcy wall. Not for me I will say. Houses are too close together as it is. It does have the risk of going badly, whomever you choose.
I’m interested and I have vacant land instead of my backyard so please contact me
Absolutely not! You’d be better off buying a tiny house on wheels and installing yourself. You can charge more than measly $500 a month, select tenants and evict them when you want.
Yes I think the ideal situation would be for municipalities to make it legal for homeowners to do just that. Unfortunately it’s illegal in most of the US still.
If someone wanted this kinda situation why not have their own tiny home built and lease it out themselves? Or let a person with one on wheels stay their maintaining full control of their land and how much to lease for. It’s totally nuts giving up that control to some faceless company middleman. The wording on their website looks like a prime setting for identity politics to creep into it and end up losing your land over.
Well, not that simple, getting land can be problematic and issues aren’t limited to just giving people more affordable housing as this also tries to address the growing number of people who are starting to struggle to afford the house they already own, thus the payments to the property owner as part of the deal that at the same time makes leasing the land easier and more easily affordable than buying land outright…
Mind, in high cost areas like the Bay area, more and more people are selling their homes and moving and that’s a trend they want to try to stop.
While part of the point of affordable housing is being able to place them near where they can have the most benefit, not out in the middle of nowhere where it would be harder to commute to work, have less access to resources, etc. and would also add cost to the development as they will likely have to add the cost of infrastructure on top of the buildings…
There’s just plenty of valid concerns too, even with the best of intentions the fact is many of these programs have failed because there are always people who ruin it for everyone else and those running the programs have more often than nut underestimated those issues.
It’s just not something that will have an easy solution… It can be done, there’s a few success stories out there, but it has to done right…
Please let me know when you expand to the East Coast.
This sounds so wonderful and actually have property which this would be a perfit match.
I agree. . .
Why would you burden the middle class with this and require them to solve society’s ills? Get some of the uber wealthy do-gooders to donate some of their immense properties to this well-intentioned but ill-planned program. For instance, I understand Mark Zuckerberg has a 750 acre compound over in Hawaii that’s completely fenced in…maybe he’d like to help out. Oh, that’s right, the uber wealthy don’t want the common people living anywhere near them…. they are out of touch hypocrites; one and all…. This plan has horrific unintended consequences written all over it.
Not the best idea legaly- wise but if there were other ways to let people own the property and there needs to at least be an additional half bath.
I would love to have one built in my son backyard but I don’t think I can afford it because I am retired and I don’t get very much income. Marie Leland from Mesa Arizona .
In 1972, my mother built a small house in the back yard of her mother’s house in Houston, Texas. Within months after the house was finished and my mother moved in… her mother kicked her off the property and then used the house to rent out as her personal property. I learned right there to never build a house on land you do not own or a house that cannot be easily moved elsewhere. You can’t even trust your own relatives.
I believe I would either lease that portion out and also the rest of the property and move to another state, like Texas, or sell out completely and move.
Never in a million years would I do this!!! I MIGHT consider it IF 1) the lease term was much shorter, like 3-5 years; 2) if I were in desperate need of income (but in CA, $500 per month is only a drop in the bucket); 3) there MUST be some anti nuisance clause in the lease to prevent crazy people from moving into your back yard. As well as an EASY way to get them out should something like Covid prevent evictions; and 4) the tiny house becomes the homeowner’s property after a certain amount of time…like maybe 10 years.
If everyone who rented a unit like this was self aware and if the lawn area could be fenced off to give a bit of privacy to each, and if there were a way to easily get rid of bad tenants, annoying people, people who refused to follow the rules or not park in your parking spot, etc.
If the home owner were the landlord it might be easier but then again I would never put myself in that position either. Most tenants want to enjoy their space as they like (including music, lights, no curfews, outdoor entertaining…) while the home owner, whose house payment may be upwards of $2500-$3000 also wants to enjoy their own space. This only leads to conflict many times.
The problem with low cost housing is they tend to come with tenants from lower income jobs due to lack of education/skills therefore they aren’t always the best at taking care of their things or the house, (Broken appliances/furniture, bicycles, trash/bottles/cigarette butts, etc. On the lawn.).
We own a house in So Cal. (but don’t live there). There is no legal street parking. We have 2 cars for the garage. Where would these people park? This will pose problems with the neighborhood and HOA.
One last thought: this will need CODE CHANGE due to the fact that you are changing a SINGLE FAMILY RESIDENTIAL lot to a MULTI-FAMILY LOT. This requires LOTS of work/money PER LOT. Sure you could lie and call it a “guest house” for family but if you are leasing the ground for someone else’s building who is renting it to non-family, that will be a monumental hurdle to get over.
Not only do I think this is a bad idea, I don’t think it is possible in cities. Maybe in rural areas/farms. It was a fantastic idea, and with more brainstorming might lead to a better doable idea.
On the last thought, it’s actually no longer that difficult… California has been making a lot of changes the last few years that have lowered restrictions and pretty much makes it that there has to be health or safety reasons to not allow an ADU…
Here’s a summary of what is allowed now…
1) It’s Easier to Legalize Unpermitted ADUs – One of the main changes to California’s ADU rules for 2020 is that you can now bring your unpermitted ADU up to code within five years.
2) Shorter Approval Periods – Before the 2020 rule changes, the approval period for ADUs was 120 days. Now, cities in the state of California must provide ministerial approval or denial within 60 days of receiving the application.
3) HOAs and CC&TRs – Thanks to the 2020 ADU rule changes, neither Homeowners Associations nor the Covenants, Conditions, and Restrictions of properties can reasonably prohibit the development of ADUs or JADUs.
4) More Parking Exceptions – Prior to 2020, if your home was located more than half a mile from public transit, ADUs were required to have one parking space per unit or bedroom. Starting 2020, however, you no longer need to include parking in your ADU house plans if they are created within an existing space in your home or an accessory structure, like the house or carport. Replacement parking is also no longer required for the main residence if the garage or carport is demolished or converted to build the ADU in California.
5) You Can Now Add Two ADUs – Homeowners are also now allowed to add two ADUs on a single-family zoned property. According to the new guidelines, one must be a full ADU and the other a JADU, which can be created by converting a part of the existing residence. A JADU can not be larger than 500 square feet. Both the ADU and JADU may be rented but not sold separately from the primary residence.
6) Reducing Setbacks – With the 2020 ADU rule changes, setbacks for ADUs have been reduced to 4’ for the side and rear yards.
7) Impact Fees – In accordance with the 2020 ADU rule changes, cities in California can no longer charge impact fees for ADUs under 750 sq. ft. Impact fees for ADUs larger than 750 sq. ft., meanwhile, shall be proportional to the size of the ADU in relation to the primary dwelling.
8) Remove and Replace a Garage to Retain Setbacks – On the other hand, if you have a garage that you want to convert but find it less costly to replace instead of repair, the 2020 rule changes permits you to remove it and replace it with a new ADU that matches its footprint to maintain the existing reduced setback.
There’s a number of home owners who have already taken advantage of the rule changes to put ADU’s on their property…
In most jurisdictions, the CODE/ZONING LAWS will prevent this from happening (unless a LOT of lies are told). It is very bad to begin a 99 year relationship with lies.
Nice first try, but go back to the drawing board. There is a reason the government has codes and regulations they are for the safety of the general population who are often not smart enough to refrain from running with scissors. Though the system mentioned would need severe tweaking, I doubt the government would allow it.
A community such as this should be able to come up with solutions. When is our next brainstorming meeting!
Most, perhaps, but such laws have been changing in recent years in multiple states. Some are even eliminating the single family zoning altogether. The main remaining hurdles are actually that cities need to change parking requirements and limits on building and lot size, too, as well as provide a better bureaucracy to run it all…
Mind, the system as it was before was basically NIMBYism run amok and codified into local laws that led to fewer housing options, drastically raising prices in cities and towns alike, and contributing to inequality. So there has been a growing counter YIMBY movement that started to go mainstream before the pandemic put a halt to everything, but budget cuts and unemployment has in turn made the importance of housing affordability a growing issue once again.
For an example of proven reform, look at Houston, which doesn’t have use-zoning, which means that housing, including apartments and other multifamily housing, is permitted anywhere private covenants don’t restrict it.
In 1998, Houston policy makers reduced the minimum-required lot size for a house from 5,000 square feet down to 1,400 square feet on all of the land within the city’s I-610 loop. This made it possible to replace a single-family house with three. Then in 2013, the 1,400-square-foot minimum lot size requirement was expanded to cover the entire city.
The result has been thousands of townhouses have since been built that wouldn’t have been permitted before. Houston now boasts a median home price below the national median in spite of decades of rapid job growth and increasing population. A typical house in Houston costs less than $200,000, compared with nearly $300,000 in Atlanta or a staggering $680,000 in San Diego. While in other booming cities, more jobs and new residents have led to skyrocketing prices but few new homes.
One of the keys to their success was that Houston’s other flexible land-use regulations allow home builders to deliver those new units in a cost-effective and desirable way. Houston’s rules ensure that three new units can be spacious, useful and an improvement on the detached houses they replace.
I agree that $500 per month is too little to sell off part of your property, diminish the value of what remains and then deal with people that are basically co-tenants with no control. From an economic point of view, if you really need money convert and rent the garage or a room in your house for more than $500 or event rent the space where this building would go to store three cars or boats at $150 a month each for much less grief. I like the concept, but without a buy down/buy out option it is a non-starter for me.
In theory, this sounds like a great and altruistic idea. But in practice, there are too many pitfalls for the homeowner. I also see an AirBnB trying to sneak into this plan.
Yes I feel like there are still a lot of kinks to work out to make it feasible and beneficial to all parties.