To address rising housing costs across Texas, Joseph Claypool, a lieutenant with the Round Rock Police Department, looked to the growing "tiny homes" movement and found support from Amplify Credit Union in Austin.
Tiny homes — which are standalone houses that are typically under 500 square feet and cost between $20,000 and $100,000, according to Quicken Loans — are a growing trend among people who want to live more affordable and sustainable lifestyles. Though it would seem an ideal solution to the housing problem in Round Rock, Claypool had trouble finding an agreeable lender.
Claypool was met with repeated denials for a commercial construction loan after applying to numerous large banks in early 2022 (he declined to name the banks). He took each application as a learning opportunity to fine tune his proposal and better understand the financial aspects underwriters examine.
It wasn't until November 2022 that Claypool finally found success through the $1.5 billion-asset credit union Amplify, where loan officers worked to get the application to the final stages and disburse vital funds shortly thereafter.
"We hear affordability concerns not just in Round Rock but all over Central Texas and just kind of the rising rental prices and people struggling to find good housing … One of the mission points of Amplify Credit Union is to impact communities that we serve and this project just made sense to us," said Rene Flores, commercial loan officer at Amplify and a Round Rock Council Member.
The resulting community would be called Mustard Seed Village, a name that came from a saying Claypool heard repeatedly while growing up.
"On my keychain, I carry a tiny mustard seed as a reminder of how my mom used to always tell my brother and I that 'with the faith of a mustard seed, you can move mountains.' … As I'm going to meetings and listening to the leaders of our city talk about how great our city is, but how it's not affordable to the average person, I was inspired to establish the Mustard Seed Village," Claypool said.
Ground broke on the roughly two-acre plot of land in January of 2023, erecting a laundromat and 28 individual two bedroom, one bathroom houses that stand at just 822 square feet each. All of the properties were rented out within two weeks of the construction finishing in June, and the tenants include firefighters, police officers, teachers, restaurant staffers and other public workers.
"I wanted to be the cheapest in the area," Claypool said. Publicly available data from Zillow recorded median rental prices for properties located in Round Rock at $2,300 in June and $2,150 in October. Mustard Seed Village set its rent at $1,375 per month.
That figure was carefully calculated, Claypool explained, to cover the bank note and other fees while leaving "just a little bit more in case an emergency or something happens maintenance wise," he said.
Also located in the village is a girls home operated by Teen Challenge of Texas, which helps recover children from difficult backgrounds.
Economist predictions hold that year-over-year increases in home values will slow down over the next year, fueling the Federal Reserve's mission to quell inflation.
Until then, traditional rental opportunities remain the most viable options for many consumers, as a deficit in available homes and soaring housing prices across the U.S. leave first-time buyers priced out of the market.
Tiny homes are growing in popularity across the country, but many are unable to purchase one of their own due to zoning restrictions and pricing volatility in construction materials, explained Jason Kahle, managing partner of the custom design and build firm Small House Solutions in Austin, Texas.
"As a general contractor, you have all of your guys and your vendors that are experiencing the pains of inflation and trying to provide a solution … So they're looking at charging a premium to be able to stay in business, and that gets carried on to us which then leads us to carry that cost on to the client," Kahle said.
While smaller in stature compared to a standard residence, tiny homes can help offer stability to people from underserved communities.
"Apartment complexes are transitional, where people think 'I'm only going to be here long enough until I can find the next best thing.' … With Mustard Seed, I see a lot of doormats that say 'Welcome home,'" Claypool said.
