Shipping containers turned into an affordable apartment building? A Salt Lake City company plans to make it happen, but obstacles remain.

(Trent Nelson | The Salt Lake Tribune) Eco Box Fabricators, based in Salt Lake City, hopes to make viable affordable housing out of discarded shipping containers. Tuesday Jan. 15, 2019. Rod Newman in the factory.

Inside a chilly warehouse on Salt Lake City’s west side, work is underway on what might be called the bleeding edge of less-conventional affordable housing.

Owner Rod Newman and his company Eco Box Fabricators are running a housing laboratory, aimed at conquering the challenges of building a multistory apartment complex out of shipping containers, those steel boxes used to carry goods worldwide.

And after many months of work, the longtime Utah real estate executive believes Eco Box is ready. Newman said he submitted a proposal Friday to build an 83-unit apartment tower out of modified containers at 543 S. 500 West, in a project to be called Box 500 Apartments. At six stories, the residential building would be among the tallest constructed in North America or Europe using the metal boxes.

“Legos,” Newman said recently, likening some of his building techniques to using the plastic toy building blocks. “I mean, it’s more complicated and detailed than that, but the concept is pretty similar.”

Yet nearly 18 months after first approaching the city about the project, Eco Box remains months behind schedule and nearly $443,000 over budget amid concerns at City Hall over fire and earthquake safety, parking and whether the project will even yield affordable homes. Newman said while he understands the city’s caution, he’s unsure how approval will go from this point forward.

"They’re not hindering us, but they’re not helping either,” he said in an interview at Eco Box’s housing factory, 534 W. 800 South. “Their cautious attitude towards something different is costing hundreds of thousands of dollars to us.”

Officials from several Salt Lake City departments — housing and neighborhood development, building inspection, engineering and planning — have all reportedly been involved in initial review of the Box 500 project.

And given the promise of Newman’s idea and intense citywide demand for affordable housing, “we’re excited and we want it to work,” said Matthew Rojas, spokesman for Mayor Jackie Biskupski. But the city cannot overlook safety issues, particularly concerns over meeting building-code protections in case of a fire, Rojas said.

“That’s one of those things we do not mess around with,” he said.

Worldwide trend

Thousands upon thousands of the containers make the one-way trip from China to the U.S. every year, creating a huge surplus and no shortage of creative ideas for how to recycle them, including as office and residential spaces. Use of the boxes in construction — dubbed “cargotecture” — has exploded over the past decade, according to the Intermodal Steel Building Units Association, based in Tennessee.

And thanks to revisions in building standards by the International Code Council to cover the use of shipping containers, the association’s managing director, Barry Naef said, many of the engineering issues “are so easily taken care of now.”

Utah has seen some container-built, single-family homes and accessory-dwelling units, also known as mother-in-law apartments. And a small Salt Lake City firm called Little City recently began offering refurbished shipping containers as a more affordable and quickly deployable option for office spaces at street level.

Most of Eco Box’s projects involve multiple containers, Newman said, including one now in the works that will piece together up to eight for one dwelling. Box 500 Apartments, he said, applies the idea vertically to create more units on its 0.63-acre parcel.

Newman, who also owns Utah-based Metro National Title, said he’s passionate about helping an upcoming generation who can’t afford, as he says, “to pay their rent and still have enough room to afford groceries and go to the movies once in awhile.”

With a company motto of “Think Inside the Box,” Newman said he is aiming to create workforce housing, matching the typical wages of construction workers, teachers, firefighters, police officers and the like. His goal is to bring dwellings to market at under $100,000 per unit including land costs — and he said he’s purposefully refusing a range of taxpayer subsidies that could be available for his Box 500 project.

"We want to prove that you can make affordable housing without public assistance and without tax dollars,” Newman said. “We want to make a difference.”

‘A millennial’s dream’

Shipping containers come in several sizes, typically 20 or 40 feet in length. The one Newman uses — 9 feet 6 inches tall, 8 feet wide — costs between $3,900 and $4,900. The company makes dwellings ranging from studio apartments up to three bedrooms. Units are modern, well-outfitted, compact and self-contained.

“This is a millennial’s dream,” Newman said.

Since the company’s founding in May 2017, Eco Box has developed a range of techniques — some of them trade secrets, Newman said — for cutting ample windows, refurbishing and combining shipping containers while preserving their structural integrity.

He and Eco Box general manager Kelly Adams said the company has also solved tricky issues with plumbing and electrical fittings for stacked containers while still keeping the finished units functional, comfortable and visually appealing.

“We went through all kinds of gyrations on that,” said Adams.

Final dwellings are about 95 percent finished when they leave Eco Box, equipped with special toilets, solar panels and other amenities. Crews then complete trim and finish work once the units are placed atop footings or foundations on-site, Adams said.

Eco Box could make a half-dozen dwellings or more per day, Newman said. “This is going to produce a lot of housing."

Long haul

But proving the concept to Salt Lake City officials has been anything but easy.

They are reluctant to talk about their exact concerns, partly to protect the company’s confidentiality before its formal application came in. But several officials said the city have held several meetings with Eco Box in hopes of addressing engineering and safety questions.

Current designs for Box 500 envision hallways inside the building. Those have reportedly spurred concerns over safely evacuating residents in case of a fire. “The city now wants a sprinkler system,” said Newman, who believes that’s unnecessary because the containers are made of steel. “This stuff doesn’t burn."

At several points, engineering issues have forced the city and Eco Box to bring in consultants from Seattle and Los Angeles, as well as academics at the University of Utah, to help model what might happen to the Box 500 structure in case of disasters, adding to the project’s expenses.

Concerns over adequate parking on the building’s footprint have led Eco Box to design an internal lift system for vehicles, further boosting costs, and that still has to pass city muster. There are questions, too, as to whether the Box 500 project will yield affordable units at all, according to one city official.

While Newman is declining city help with financing, Eco Box has sought a waiver on some impact fees, and getting that discount hinges on his units being deliverable at rents well below the going market rate.

But the city’s financial review so far indicates the affordability piece for Box 500 may not pan out. According to Melissa Jensen, director of the city’s Department of Housing & Neighborhood Development, the costs of transporting shipping containers and refurbishing them is “almost exactly per square foot what we’re seeing to construct new.”

Jensen added that Eco Box could submit additional financial data that might affect that conclusion. Overall, Jensen said, many of the company’s challenges as it seeks approval at City Hall stem from the idea being so new.

“There are not a lot of examples in Salt Lake City of multifamily [housing] using shipping containers,” Jensen said. “Any time you’re doing a new product, it’s not always an expeditious process."

Nonetheless, Jensen, Newman and the mayor’s spokesman all said Eco Box and city officials continue to work to resolve issues surrounding Box 500, and the company owner maintains he’s still confident his building permit will ultimately be approved.

“They’ve been with us every step of the way,” Newman said of working with city officials. “And I guarantee when this project goes up, there won’t be a single thing wrong with it.”