Floating homes: What it costs to live on the water

@CNNMoney June 15, 2012: 3:21 PM ET

NEW YORK (CNNMoney) -- Many people dream of living near the water, but a few people take it to the extreme: Living on top of the water -- in a floating home.

"It's a beautiful lifestyle," said Robert Oshatz, the designer of a new floating house in Portland, Ore. "You have the beauty of the water. It's very relaxing."

Unlike a houseboat, a floating home has no propulsion power of its own. They are merely buoyant platforms or rafts that are docked, plugged in to the electrical grid and receive water and sewage service.

There are only a few floating home communities in the U.S. and most of them are on the West Coast. One of the best known is in Seattle, thanks to the hit movie "Sleepless in Seattle."

People have been living in floating homes in Seattle for more than a century. But life on a floating home was not nearly as chic back then, according to Melissa Ahlers, a floating home owner herself and member of the Seattle Floating Homes Association.

"It used to be that if you couldn't afford land you threw a shack on a raft and lived there," she said.

Back then, the waterfront was used for industrial purposes and for shipping. Often sewage, industrial wastes and other effluvium, including that generated by inhabitants of the floating homes themselves, was discharged directly into the water.

Once the harbors lakes and rivers were cleaned up, living on the water became fashionable -- and more expensive. These days, Seattle's floating homes sell for slightly more per square foot than comparable land-based houses, despite their shortcomings, such as a lack of basement for storage and little outdoor space, according to Ahlers, who is also a real estate agent.

Small floating homes can sell for as little as $200,000, but that's unusual, she said. Prices can range wildly. Last year, a modern, four-story floating home sold for $2.8 million. More typical, however, is a 1,000-square-foot, two bedroom she is currently listing for $350,000.

Over the years, floating home communities have shrunk -- and in some cases disappeared altogether -- as waterfront property has become increasingly valuable. Owners of the properties where these homes are moored have sometimes evicted their waterbound tennants and sold the moorages to deep-pocketed developers for expensive condos and commercial developments.

These days, only about 500 floating homes remain in Seattle compared with a couple of thousand in the 1930s.

Ahlers and her husband hadn't planned to stay too long when they bought their floating home 12 years ago. They were going to leave when they had kids. Now that they are raising two, they have no plans to move. They just love the lifestyle.

"You get ensconced in the community," she said. "Your neighbors become like family."

Correction: An earlier version of this story incorrectly referred to a listing of a floating home that was represented by Melissa Ahlers. The home she has listed is a two-bedroom home and costs $350,000.

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