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Table of Contents

1. Executive Summary

2. Industry Analysis

   1. Industry History and Size

   2. Regulations Specific for Rental Properties

   3. Greatest Impact for the Tiny House Community

3. Competitive Analysis

   1. Major Competitors

      1. Competitor’s Strengths and Weaknesses

      2. Personal Experience with their Products/Services

      3. Competitor’s Comparison Grid

   2. Sustainable Competitive Advantage

1. EXECUTIVE SUMMARY

2.0 INDUSTRY ANALYSIS

2.1 Industry History and Size

Whether you are looking for a residence or a place to conduct business, real estate is an industry that touches every individual. This project will focus on a new development of “tiny urban houses” targeted at a new generation of millennials within walking distance to a campus. Millennials are ready for a better housing alternative because of their mounting student debt, rising rent prices, and stagnant wages (Graph 1).  

Graph 1: Data from a variety of sources showing that increases in household income are match by increases in both tuition and rent.

Housing is considered a derivative industry, meaning it tends to follow other industries.  A good example is the Silicon Valley’s effect on housing prices during rapid expansion of an industry.  Workers flock to the area when a new industry is formed.  As the demand for housing increases faster than the supply, the prices will tend to increase1,2. For example: 

• In 2000, before the technology boom, the median house sold for $429,000.  

• In 2005, the median home price was $750,000.  

• Today, the median home price in San Francisco is almost $1.2M.  

Location is the single most important factor in the real estate business.  In order to select a location for further analysis, geographical population trends must be considered.  The US Census Bureau provides population projections out to 2030.  Table 1 shows a reduction of the data to highlight geographical areas of interest.3

Table 1: Data from the US Census Bureau showing projected population growth from 2000 through 2030.

Using the population growth projections as a guide, local markets were studied. Table 2 shows the market data for the various cities of interest.

Table 2: Market data for various cities of interest. Rental market size was calculated based on the following equation: Monthly Rent * Population * (1-%Homeowner) * 0.5 * 12 months/year.  The 0.5 factor assumes that, on average, each rental has two (2) people occupying the residence.

In this industry, market share is hard to calculate exactly, but it is estimated that 70% of the rental industry is controlled by 2-3 rental companies.  In the Portland area, the market leader is a company known as Greystar.  These large holding companies purchase large complexes throughout a city and install a single management company to run the various properties.  

2.2 Regulations Specific for Rental Properties

Each state has unique rental property laws.  We will evaluate the applicable Oregon rules and regulations.

Rental Density: Title 33 Planning and Zoning, 33.239

Table 3: Rental density requirements4

Below are the applicable state statutes that govern this industry.  For a full list of the statutes, see appendix.

• Or. Rev. Stat. § 90 – Residential Landlord and Tenant

• Or. Rev. Stat. § 91 – Tenancy

• Or. Rev. Statutes Vol. 03 § 90 to 130 – Landlord-Tenant, Domestic Relations, Probate (expand Volume 3)5

2.2 Greatest Impact for the Tiny House Community

The largest obstacle are the governing zoning regulations. The Tiny House Urban Community would fall under the multi-dwelling zoning code which is considered an R3 zone allowing up to 14.5 units per acre and may include 7 to 15 residents under the group living regulation. In addition, recreational vehicles owned by a resident may not be used as a permanent residency. Currently a tiny home is situated on wheels or a trailer which the state labels as a recreational vehicle. 6

3.0 COMPETITIVE ANALYSIS

3.1 Major Competitors

There are a variety of competition when evaluating construction of a tiny house community close to a campus and areas with professional employment opportunities. The first competitor is the university or college and the housing they provide as an organization.  The second competitor is the private rental market, which is a vast market.

The first competitor, on campus housing, offers close proximity to classes, meals plans, cafeteria, and campus amenities such as a gym, library, restaurants, coffee shop, free Wi-Fi, laundry facility, mail service and elevators.7 There are many social aspects of community living such as meeting new students, social events and activities that allow new student to adapt easier. Some on campus dormitories offer private rooms. Students have 24-hour on campus college security or police that patrol the campus for safety.8

There are several disadvantages of on campus housing, including smaller rooms, limited space for personal belongings, sharing bathrooms with multiple students, no kitchen, privacy can be nonexistent, parking limitations, dislike of roommate, and possibly the cafeteria food. Furthermore, there are on campus rules and regulations that students living in the resident halls are expected to abide by such as no alcohol or drugs, guests have limited tenure depending on the university, and there are typically observed curfew hours.9

Second competitor, off campus housing apartments, which offers lower housing cost, larger living space, full kitchen, private bathrooms, ability to pick your roommate, more independence, own parking space, no curfew hours or resident advisors, and walking distance from the University.7 Living off campus provides students with the opportunity to become an adult, since many have not been on their own. This will allow them the opportunity to manage their own money, pay bills, cook, and purchase groceries, furniture and other necessities.10

There are several disadvantages of off campus housing, which includes financial

aid packages such as college grants and scholarships not entirely covering off campus housing costs. The lack of security may be a safety concern to students living away from home for the first time. Also, managing your own bills such as groceries, cooking, utilities bills, phone bills and purchasing furniture can be overwhelming for students on a budget or who never had experience doing it before.   

Members of the group have tried similar products with only one group member actually spending an extended time within a tiny house.  The concept of consolidated living is not unique, whether it is a dorm room, a small apartment, or a recreational vehicle (RV). The appeal of having personal space can be a basic need.  This product allows for the personal space to be mobile, or accommodate those with mobile houses.

Along with mobile living, our project wants to create an environment conducive to the millennial generation where the community areas allow for social interaction, and the location supports quick access to both universities and a downtown area offering employment. Larger rental management companies, such as Greystar, provide high density complexes close to campuses and appeal to students through continued increase of the amenities students seek; social gathering areas in the form of TV lounges, pools, and barbecue areas along with Wi-Fi offered in the units and throughout the property.11 Our business concept can compete with most of these amenities and provide a better return on investment (ROI).

3.1.3 Competitor’s comparison grid

Table 4: Competitor comparison grid.  

For example, in Portland, Oregon there are approximately 17 different higher education organizations within the metro area. The largest campus is the Portland State University with over 17,000 students.  All of the organizations combined include a student population of roughly 32,000 students.12

3.2 Sustainable Competitive Advantage

The tiny house community will decrease the city’s carbon footprint. The model includes potentially repurposing an infill location to accommodate higher density living in close proximity to a university and high employment area so residents can travel via walking or biking.  It will allow access for multiple users, college housing overflow, students seeking off site accommodations, recent graduates, short term duration relocations by professional, and personal travel like Airbnb. The business plan allows for cash flow from both land and structures, allowing for flexibility of open lots for customers who own a mobile tiny house.

This alternative living option is creating a model for affordable and sustainable student housing. As well as innovating a more efficient living option for students and recent graduates.

1 “Trends in College Pricing." Trends in College Pricing - Trends in Higher Education - The College Board. College Board, 2017. Web. 10 Feb. 2017.

2Trulia. "Real Estate Trends." Real Estate Trends. Trulia, 2017. Web. 10 Feb. 2017.

3Trulia. "Real Estate Trends." Real Estate Trends. Trulia, 2017. Web. 10 Feb. 2017.

4City of Portland. "The City of Portland, Oregon." All Content RSS. City of Portland, 2017. Web. 10 Feb. 2017.

5Hall, Lucas. "Oregon Rental Laws." Landlordology. Cozy, 15 Oct. 2016. Web. 10 Feb. 2017

6Portland Zoning Code effective January 1, 1991 (updated February 1, 2017). Retrieved from The City of Portland Oregon: https://www.portlandoregon.gov/bps/title33_complete_print.pdf

7“Residence Life,” Colorado State University, http://housing.colostate.edu/residence-halls, 8 February 2017.

8Megan Heynen, “The pros and cons of living off campus,” USA Today College, 8 October, 2012.

9Dana Mattioli,  “The Pros and Cons Of Living Off Campus,” Wall Street Journal, 21 March 2007.

10Vicki Nelson, “Should My College Student Live Off Campus?” https://www.collegeparentcentral.com/2010/03/should-my-college-student-live-off-campus/, College Parent Central, 10 February 2017.

11Moger, Byron.  “Student Housing Stats” CCIM. Oct 2014.  Web 12 Feb 2017

122015/2016 U.S. Department of Education National Center for Education statistics survey.  Web. 12 Feb 2017