Startup Behind Tiny Shipping-Container Homes Targets Crypto Investors
- Stackhouse hoped to turn 320-square-foot shipping containers into affordable tiny homes en masse.
- But rising costs, public criticism, and difficulties getting financing sank its first project.
- It’s now considering a luxury development in Puerto Rico, a hot destination for crypto investors.
Picture a world in which you can move your condo unit from one city to another, seamlessly docking it at a tower in a new locale like a ship arriving at a port.
That was the vision proposed by the cofounders of Stackhouse, a company that sought to convert 320-square-foot shipping containers into tiny homes, then build towers near bustling downtown areas where the units’ owners could stack their container homes and connect to utilities and other amenities.
Cofounders Janelle Briggs and Ryan Egan hoped to make the homes affordable, heralding their model as one that could “democratize housing.”
But the prices of the units mounted, as did public criticism of the company’s first project, which was planned to go on a busy street just west of downtown Denver. In October, Briggs and Egan announced the project had fallen through.
Now, Stackhouse is working on a development opportunity that, in some ways, is the opposite of what it once hoped to achieve in Denver. Instead of building affordable, or even market-rate, units, the company is planning to hit a luxury price point. And it’s looking to do so in Puerto Rico, where Stackhouse’s container homes would be marketed to cryptocurrency investors who are moving there to reap the ample tax benefits that the island provides.
Briggs and Egan originally believed their Stackhouse concept could help address housing shortages and an affordability crisis that have made it difficult for people to own their homes. Those issues have been exacerbated by the COVID-19 pandemic.
But the challenges they faced in Denver left them disenchanted with the prospect of building affordable housing in the US, though that remains a goal, Egan told Insider.
“I thought that if I had a new, better idea, that it would be welcomed,” Egan said of Stackhouse’s Denver project. “I did not anticipate the pushback at every level.”
How the Denver project went south
Briggs and Egan first zeroed in on Tucson, Arizona, for their stackable shipping-container homes.
In 2019, the company purchased land in Tucson for its first tower project. For prospective residents, the price to buy one of the shipping-container units was expected to start at $45,000. Owners of the units would pay an additional monthly rental fee to “dock” their container within Stackhouse’s tower.
Briggs and Egan dreamed of expanding the concept to 25 cities, which would give buyers the chance to move from one city to another simply by shipping their containers to a new tower.
Egan said he and Briggs planned to use an Arizona tax credit to help fund their project, but when that program was retired, they were forced to look elsewhere for their first venture. They settled on Denver, where they had previously attended a startup convention, and in September 2020, they went under contract for a parcel of land in the city’s West Colfax neighborhood, a diverse area of town that has been increasingly gentrifying in recent years.
The pair raised roughly $180,000 through the online crowdfunding platform Wefunder and secured backing in January 2021 from Techstars, a startup accelerator in Boulder, Colorado.
Denver residents who lived near the proposed project site in West Colfax voiced plenty of support for housing in the area, Egan said, but were less enthusiastic about Stackhouse’s hybrid model of selling the container homes and then renting out slots in the tower. Residents wanted more for-sale housing, Egan said.
The Stackhouse cofounders decided to shift their business model to one that more closely resembled that of a co-op. Residents would purchase their shipping-container home, then pay an additional sum for shares in the company that owned the eight-story tower, effectively purchasing the right to locate their units there, Egan said.
The result was that the upfront cost of the units rose dramatically. Surges in materials costs and the decision to use a new factory in Denver, rather than Arizona, meant that the individual containers would now cost a buyer at least $110,000, instead of $45,000. To buy into the co-op, residents would need to pay an additional $200,000 to $350,000, depending on where the tower was in the building.
Prospective residents could now expect to pay between $310,000 and $475,000 to buy into the Stackhouse experience.
In August, Briggs and Egan announced the new plan publicly. It did not go over as intended.
“The headline purchase price just made the community even more furious than our for-rent option,” Egan said.
Stackhouse’s tower met local zoning regulations. But Denver City Councilwoman Jamie Torres, who represents the West Colfax neighborhood, said the prices of the units didn’t match the company’s original pitch of affordability.
“At $350,000, it might be more attainable, but it certainly isn’t the affordability that I’m definitely looking for in certain projects,” Torres said. “I think if they were unable to achieve their end goal, it was due to factors beyond public opinion.”
Heidi Newhart, a Denver real-estate agent and board member for the West Colfax Association of Neighbors, said her organization didn’t take a stance on the project. She said she also didn’t remember any organized campaigns against the Stackhouse project.
“But as a Realtor, I thought that the prices were outrageous for what was being proposed,” Newhart said.
Online responses could be much harsher. Egan said he and Briggs, who at the time were living in a model Stackhouse unit that sat on the proposed site, received threats of violence.
In October, the cofounders announced on Stackhouse’s website that they would be abandoning the Denver project. By that point, they had asked for several extensions to the closing date for the land purchase, which the owner had granted. Securing the financing for the project had been difficult, Egan said.
“Raising money for a disruptive real-estate concept has proven almost impossible,” Egan said.
Briggs has since taken a step back from the company, Egan said.
Pivot to Puerto Rico
Egan said he walked away from the experience in Denver with a clear-eyed view of the challenges Stackhouse was up against, particularly as a for-profit company.
“Maybe there is no market to try to make attainable housing a reality in America, given that so many people are heavily invested in property values appreciating every year,” Egan said.
After Stackhouse’s Denver project garnered media attention, the cofounders were approached by a group that owns a remote beachfront property in Puerto Rico. The island, which does not have a
tax for qualifying new residents and offers numerous other tax benefits for entrepreneurs and corporations, has emerged as a hot destination for cryptocurrency investors seeking lower tax rates.
The group in Puerto Rico thought its land could be a suitable site for a Stackhouse development that would cater to those new arrivals, Egan said. Stackhouse has now shifted focus once again, turning toward “high-end net-zero housing for the crypto community everywhere,” Egan told Insider.
Puerto Rico offers a logical starting point, Egan said. The company is evaluating several sites there, while continuing to look at other properties around the US. No plans have been set in stone.
In Denver, Stackhouse planned to rent some units through the sale of nonfungible tokens, which could be redeemed for temporary stays. Egan said that he believed NFTs could one day replace titles as proof-of-property ownership and that Stackhouse would incorporate them in projects.
Egan’s hope is that eventually, through economies of scale, Stackhouse can fulfill its initial promise of delivering affordable housing. Until then, the company will be focused on serving a different audience.
“All good ideas that everyone now enjoys, including indoor plumbing, started with just the 1%,” Egan said. “Unfortunately, it seems I’m going to have to go that way also.”