Homes are the most expensive things most people will buy in their lifetimes. A lot of attention has turned to the housing market and people trying to borrow money lately, and it’s true what they say: recession sparks innovation.

The man who turned his idea for shipping container homes into a business called SG Blocks doesn’t mention the housing crisis when he talks about what inspired him. However, he couldn’t have picked a better time to launch an inexpensive, environmentally friendly housing solution.

Inspiration for SG Blocks

The SG in SG Blocks stands for Safe and Green. Co-founder of SG Blocks, David Cross, who used to work as a shipping merchant, says:

“As you’re looking down the deck of the vessel, you see hundreds to thousands of containers perfectly configured,” Cross said. “They were stacked nine high below deck, five or six high on deck, and I just kept seeing hotel after hotel on the deck of our ship.”

“The containers are designed for hostile dynamic life at sea … capable of carrying 60,000 pounds. It just made imminent sense, that with minor modification, it could become a multi-family living system.”

The Story of SG Blocks

I found an article at the Inquisitor that does a great job of explaining the concept behind SG Blocks:

No longer the domain of students and crunchy hippies, shipping container housing has moved from dystopian concept art to sexy living space.

The United States imports more than it exports, and ports are overrun with shipping containers- which happen to hold tremendous potential for long-term housing solutions. But most attempts to turn the blocky metal behemoths into homes have resulted in houses that call to mind passing through Newark.
SG Blocks is changing that though, creating some amazing modern dwellings that aren’t out of place in the hippest design circles. Recycling the existing structures is Earth-friendly, too.

Price comparisons

One big benefit of shipping container homes is that having SG Blocks build your home cuts construction time in half. Unlike most situations, in which you have to pay more to get something done faster, the opposite is true here.

I am sure a lot depends on the size and type of ho me and its features, but some estimate shipping container homes from SG Blocks cost about 15 percent less than regular homes. That makes sense, given that the cost of materials and labor are significantly reduced. Others say that the shipping container homes are about the same price as a traditional stick-frame home.

More benefits at SG Blocks

Even if the price of shipping container homes is the same as regular homes, you end up getting more for your money. The materials SG Blocks uses to build shipping container homes are more durable than traditional housing materials.

The containers are termite resistant. Plus,when SG Blocks uses the containers to build shipping container homes, it means those materials won’t end up in a landfill or somewhere else as waste.

Jim Siegel of The Columbus Dispatch reports (See: http://www.dispatchpolitics.com/live/content/local_news/stories/2009/02/20/copy/payday13.ART_ART_02-20-09_B3_KCCVQ7F.html?adsec=politics&sid=101) that the Ohio Department of Commerce will not regulate payday loans into oblivion. Great, but they’re on the verge of being taken away from the public as is, thanks to House Bill 545. It capped annual interest rates at 28 percent for the high risk, unsecured loans, which is not a workable profit model. It isn’t oblivion, but it’s close.

In order to save scores of employees from unemployment and keep options open for consumers who need emergency cash but have less than perfect credit, lenders who remain in Ohio are offering pay day loans under the state’s Small Loan Act. Ernie Davis, the commerce department’s legislative director admits that lenders ”are operating under licenses set in statute.” Yet meddling politicians – driven as if their masters’ whips are at their backs – are going to look again and again to make sure lenders are “abiding by terms set in the new law.”

What’s their main problem?

Some are claiming that the process payday lenders are using under the Small Loans Act – issuing a check payment, then charging a fee if the customer wants to cash the check there – is exploitative. This, of course, is ridiculous. They can cash elsewhere, such as at their bank (they can’t take out payday loans if they don’t have bank accounts). Furthermore, check cashing businesses charge a small fee to cash checks. Why should a payday lender do it for free?

Gov. Ted Strickland says that he’ll be willing to review the situation if the law is being violated, but otherwise, pointless legislative battles that waste the taxpayers’ money must not occur. Furthermore, the payday loans industry should not be squeezed any more than it already has. John Rabenold, VP of governmental affairs for Cincinnati-based Axcess Financial (parent company of Check ‘n Go) said that half of their 72 Ohio stores are no longer in operation, and “the rest are struggling.” Rabenold would welcome a return to the debate over House Bill 545, but only so long as politicians wake up and see that capping payday loans hurts consumers.

It’s interesting that 12 people took the time to vent their “moral outrage” over changes in the Ohio payday loans industry. Interesting, in that it wasn’t until the 13th person commented on Sheryl Harris’ Cleveland Plain Dealer editorial that they noticed something wacky.

Here it is. The numbers have been left the same to preserve the editorial integrity of the source material:

So when payday lending was legal last year, CheckSmart customers paid $575 to walk out the door with $500 in cash.

Under the new licensing scheme, CheckSmart customers pay $575 to walk out the door with $500 in cash.

Shocker!

Sure, it must be a typo, but let’s move on.

If you didn’t already know, payday loans have been banned in Ohio. This ban came not only during a recession, but during a time when Ohio’s state of budget affairs was among the worst in the nation. Unemployment is high; kicking out legitimate businesses is a bad idea.

Harris draws our attention to House Bill 545, which she says was “supposed to help consumers by creating a Short-Term Loan Act that gave borrowers at least a month to pay off loans. More importantly, the new law was supposed to drive down the costs.” The crux of the argument Harris and people like her use against the payday loan industry is that the APR for a loan would be a “jaw-dropping” 391 percent.

But that’s not what’s really jaw-dropping!

What’s truly jaw dropping is that we’re expected to eat and like the spoon-fed rhetoric that payday loans are annual loans! Right-thinking people must stand up for the intellectual honest and stamp out these deceptively mild distortions of the truth. Sure, if a payday loan could be extrapolated out over an entire year, 391 percent in annual interest is possible. However, since they are two-week loans that charge $15 in many locations, You’re looking at 15 percent paid in interest, on top of the principal. For a short-term loan that is often given to clients with less than perfect credit, that is both a bargain and a price point that helps shelter lenders from risk.

What does Harris coo about, in honor of the misguided law? She yearns for a 28 percent APR, which would even one-up the supposed cap President Obama wants to put on payday loans at 36 percent APR. With Obama’s APR, the lender profits to the tune of $4.14 for a $300 loan made to a consumer. How is that anything other than insanity for a business? Furthermore, what kind of insanity afflicts people who think that today there are religious reasons for not charging interests on loans (they essentially coined the term “usury” and gave it boogieman status… similar to what was done to hide the original meaning of the word pagan… now it’s considered evil in the public eye, goat horns and all… it originally meant “country dweller” or “rustic”).

Facts are simple here. Payday loans help all sorts of consumers, particularly those who need emergency cash that can’t wait until their next payday. Few banks or credit unions offer micro loans, particularly for customers with less than perfect credit. Thus, the loans fill a need in society.