Coming soon to the Salt Lake real estate market: 83 affordable studio, one-bedroom and two-bedroom apartments, like new, used once or twice, imported from China. Previous tenant: dry goods.
While certainly not typical residential listings, these rentals are part of a new downtown development aimed at addressing an affordable housing shortage with a novel twist: used shipping containers.
“Inside will look like any apartment that you’ve ever been in,” said Rod Newman, owner of Eco Box Fabricators, the Salt Lake City-based company behind the container-turned-apartment. “We can make the exterior look like anything. It can look like stucco. It can look like brick. It can look like slat.”
Two seemingly disparate issues — fluid U.S. trade policies and Utah’s affordable housing shortage of 40,000 units — have converged in the creation of Eco Box. The new company is harnessing a trade deficit-induced surplus of “gently used” steel shipping containers to circumvent the rising cost of building materials, brought on, in part, by the Trump administration’s escalating trade wars.
As the cost of building supplies has climbed, Newman said he can build an apartment for less than half the price of one made with traditional building materials.
“When the cost of one apartment unit in this valley is $250,000, that is not affordable. That’s not low-income housing,” Newman said. “And that’s what we’re trying to do here is create true low-income housing.”
Eco Box has three planned apartment complexes in Salt Lake City, the first of which will be located where a shuttered restaurant called Devil’s Daughter stands empty. The 83 units will be available later this year to renters who are on a waitlist to receive subsidized housing. The steel shipping container apartments, which will be stacked up to six high, will make a modest dent in the market at first, but the idea has its supporters.
“I love the fact that this is thinking, as they say ‘inside the box,’ but outside the box to get a new development done,” said Tara Rollins, executive director of the Utah Housing Coalition, which advocates for affordable housing. “I don’t care how we get to the finish line. Let’s just get there.”
‘Kind of retro. Real millennial’
Inside a warehouse in an industrial zone west of downtown Salt Lake City, steelworkers grind and melt, giving new life to the 40-foot-long, 4-ton containers. They slice out windows that pull light into the cavernous boxes.
This first project will look almost exactly as is. A six-story stack of shipping containers, Newman said. He promises, however, that will look “cool.”
“Kind of retro,” he joked. “Real millennial.”
And, most importantly, he says, it will be affordable.
Having worked for much of his life in real estate, including luxury, market-rate and low-income housing, Newman came up with the idea for Eco Box while visiting a housing project for homeless veterans in Southern California. The two-story complex was made entirely of shipping containers, and was a point of pride for the veterans who lived there.
“When I saw this, it’s like, you know, I can do something that’s going to be here for a long time and help some people,” he said.
Newman is also hiring the kinds of people who might want to live in the shipping container complex. Most of the employees he recruits come to him through an anti-poverty organization called Circles.
Ruie Jones, who lives in Ogden, has been employed as an office manager at Eco Box since June. She’s also eager to move into one of the Newman’s downtown apartments.
“It’s most definitely something that I believe in because I myself am living in poverty. I have raised children in poverty,” Jones said. “So kind of breaking the cycle and also understanding and knowing that we are helping the community so that people who work in Salt Lake can live in Salt Lake.”
His heart may be in the right place, but Newman is also a businessman who sees opportunity.
A byproduct of the country’s $500 billion trade deficit in 2016 is a surplus of thousands of shipping containers sitting idle around the country.
In saving a bundle on expenses — each shipping container costs him about $2,000 to buy from companies that get them from China — Newman said he can profitably build the fabricated homes for far less than the going rate. All without government subsidies, he said.
Newman said the containers are already cheaper than they were even six months ago. And Salt Lake City’s future inland port trading hub will make the work even easier.
“They’re going to come in from China to the coast in Long Beach or LA and they’re going to immediately go on the trains to the port here,” Newman said. “It will cut down our costs because of the shipping.”
A tightening market
The Trump administration’s escalating trade war, which has slapped tariffs on Canadian soft lumber and a 25 percent tariff on Chinese steel, has not yet targeted shipping containers, but that could change.
Mike Norton of Minneapolis-based Western Container Sales warns the shipping container market is much more volatile than builders like Eco Box might hope. He’s also skeptical of the shipping container home craze, and wouldn’t want to live in one himself.
“I mean the problem is you don’t really know what’s been in them,” Norton, who has a shipping container depot in Salt Lake City, said. “Even if you have a full list of all the freight manifests, you’re relying on those being fully accurate at every port in every country this container’s ever been in.”
Norton added while there was a glut of unused containers in 2016, the market is already tightening up, making the containers Eco Box needs harder to find. And although shipping containers weren’t included in the Trump Administration's initial steel tariffs, the administration is trying to squeeze them in.
“The container is a byproduct of a completely segregated, multi-billion dollar industry,” Norton said. “So to assume that it’s always going to be there and reliably so, every time you want to grab one, I think is not really appreciating the full scope of the market.”
And Norton has a hard time believing builders will save much money in the long run.
“There’s a lot of people that think it’s a great idea,” Norton said. “But by the time you actually get going, you’re just saving a little bit on the framing. You’re not truly saving on the cost of the structure, at least significantly.”
Salt Lake City building regulators are excited about these kinds of innovative housing solutions, said Melissa Jensen, director of Housing and Neighborhood Development. But like Norton, she’s skeptical that Eco Box can get costs down significantly.
“That doesn’t mean it can’t happen,” she said. “It just means that we haven’t seen it being done much cheaper.”
But right now, Jensen said the city is doing everything it can to move the project forward.
“There’s no idea that’s too cutting edge to evaluate when we’re in the crisis that we’re in,” she said.
Eco Box owner Newman doesn’t seem to be worried that his project won’t pencil out. He’s showing no signs of slowing down. In fact, he’s sitting on plans for more than 1,000 housing units in Salt Lake alone. And they're all made of 100 percent marine grade, corten steel. Home sweet home.