Wednesday, November 18, 2009

Maximizing the built environment

A scenario:
Barbara is a single mom who got herself behind the eight ball. Her husband died from a sudden heart attack while jogging. They had no life insurance. To help her with cash flow she refinanced her modest three bedroom, two car garage home in middle America using an adjustable rate mortgage. The way it was explained to her, "when the affordable rate is about to adjust, we will refinance again, and the monthly payments will remain the same". The problem is that when the adjustable rate reset, there was no bank ready to refi her loan and now she was saddled with a mortgage that was breaking her.

Barbara works in human resources at a mid-sized utility company. After her debt service she barely has money left to feed her two kids, 3 and 5 years old.. She was very close to foreclosure when a group of three approached her office with a concept for a new small business (house retrofitting for conservation) that they imagined was allied with the utility, and that the utility might want to fund. This was beyond her pay grade and she pushed the proposal up the chain but kept the cover sheet of the proposal in her desk. Weeks later she called one of the principals out of curiosity. No the utility hadn't funded the venture but the group had secured some start up money and was plunging ahead. They were looking for space.

No one can ever trace the sparks that trigger creative energy. What Barbara blurted out was, "would you consider renting my house from me during the working day?" Meetings were had, problems discussed, and the resolution worked as follows: They split the debt service and utilities. For the start-up this was far cheaper than the office options they had explored and far more comfortable. The living room, dining room, kitchen, and one bedroom would be shared by the business while Barbara was at work. Barbara and the kids each maintained a private bedroom. The key to the success of the concept was the separation of stuff in the shared space. Barbara contacted the head of the architecture dept. of a nearby university and posted a want-ad for a design project. A short description was included and of course a student responded within days. In addition to a little money beyond materials what the student needed was a practicum for credit. For that the student required they document the process. No problem.

Barbara suggested the student set up shop in the garage. He did. And what he fabricated was a set of three modular storage cubes on wheels. During the work day they opened to include the work surfaces, and communication storage areas that were needed, and at the end of the day, were secured and rolled against a wall, out of Barbara and the kids' way.

The kicker was that when the project was finished, the student suggested that he could retrofit the garage and create an apartment for himself in the space. He did. You will be pleased to know that Barbara is secure in the house, the start-up has positive cash flow, and the city certified the garage as a legal ancillary space.


  1. That garage apt would probably be illegal in most communities including Portland.

  2. Google started in a garage in Menlo Park. I believe the woman who leased the space to the two founders took some stock for leasing the space or was an early employee and got stock. Whatever the case, it worked out fabulously well for her. This is not far off from reality at all, at least here in Silicon Valley. Great scenario Will. Really engaging.