These 5 Companies Want to Build a Tiny House in Your Backyard for Free

In an effort to improve the availability of affordable housing, a handful of design-build firms (mostly concentrated in California) are getting creative. In exchange for a share of a homeowner's rental income, a small group of five firms will actually construct an ADU in your backyard for free. The concept is a triple win: Economical housing is created, helping to ease the housing crisis in specific U.S. cities, while homeowners and designers put extra income in their pockets. If you have unused yard space and are simultaneously motivated by altruism and prudence, these five firms may be the right partners for you. 

1. Rent the Backyard

Bay Area start-up Rent the Backyard is making new room in dense cities by collaborating with homeowners who've got a little extra acreage. The company will install a prefab studio apartment on unused land behind your home, handle all the permitting required to do so, find a worthy tenant to rent the unit, and pay you 50% of the profits for providing the space—all for zero up-front costs. They’re leveraging companies like NODE, who make sustainable, carbon-neutral homes that can be installed in just a few days. Utilities will hook up to the property's principal dwelling, and they'll be metered and reimbursed. Participants can expect to add roughly $10k to their annual income (dependent on the going rate for a studio apartment in your city), and cities will get new affordable housing in previously unused space.  

2. OBY Cooperative

OBY Cooperative is a startup that’s offering turnkey, prefab ADUs to homeowners in California’s East Bay. The company takes on the cost and hassle of building an ADU, and homeowners with land to spare can collect upwards of $500 each month in rent, or $6,000 yearly, without the hassle of tenant management, development headaches, or any up-front costs. As more ADUs are built, those sidelined by the housing crisis would find it easier to secure a rental and to keep one.

3. Backyard Tiny House

It takes Backyard Tiny House, a Portland, Oregon, company, about two weeks and $50,000 to place a factory-assembled mobile tiny home in a local homeowner's unused yard or driveway. The tiny homes feature approximately 250 square feet of living space, a sleeping loft, and a composting toilet. The company prescreens tenants and takes $750 of the $1,000 monthly rent; the homeowner receives $250.   

4. ESCAPE

ESCAPE distributes free rental units or tiny homes to select homeowners or "partners" across the United States that are within 100 miles of a top metro area or high-traffic destination. In return, participating homeowners receive 40% of the collected rent generated by Airbnb or the equivalent. The homeowner is expected to pay a refundable security deposit of $1,000-$2,000, depending on which unit ESCAPE deems best for the site. The unit can be purchased by the homeowner for a predetermined price at any time during the agreement with 90 days prior notice.

5. United Dwelling

Culver City, California-based startup United Dwelling wants to help solve the housing problem in Los Angeles by placing affordable housing units in the backyards of willing homeowners, who bare none of the cost but receive a portion of the rent. The homes feature a full kitchen, laundry and outdoor space. The company insures the home, vets the tenants and manages the rental, which is priced at 30% or less of a given area's median income.

Related Reading: Kodasema Launches Prefab Tiny Homes in the U.S. Starting at $95K