This house has a weird history. It all starts with the 2 people mainly living there being the Tough Red Brothers. This house is seen as a homeless house if that makes any sense. Blue had scammed Waluigi so he'd have to live here. Crazy Dave decided to sell everything to Waluigi and take the house for him. Eventually the Tough Red Brothers left Crazy Dave behind. Seems though Crazy Dave kept his sanity. The worst part perhaps is the fact there is no bathroom. As time went on however Crazy Dave started to lose it. In theory, it's believed Crazy Dave kept his sanity due to the Jenga Blocks, and once they left he lost it. Thanks to his friends helping him however, he finally said bye to his house. He said "dear house, f*ck you".
The house is still in use after Crazy Dave disappeared. Due to Crazy Dave living on a farm for awhile he even misses this house. Luigi also ended up throwing a party in the place, until it was raided by Wario.