This sounds more like a lack of experience than anything else. If they had found an experienced construction company that would have built these houses in the h

This sounds more like a lack of experience than anything else. If they had found an experienced construction company that would have built these houses in the hundreds, that company would have assigned resources and figured out drainage, sealing and cracking. Once all this work is done, I'd assume it could be just as viable as anything else. (And reading between the lines, the problems seem to be water, water, positioning on a sloped hill, cracks, water, water, quirkiness, water, and quirkiness.) If anything, there's a bigger lesson in here on trusting things that are tried and trusted, instead of doing quirky stuff and trusting it with your livelihood. Why move in right away, why not have this as a weird cabin thing to experiment with? Never do experiments without fallbacks, people ...