Are Tiny Homes the Ultimate Solution to the Housing Crisis?

As per, since 1950, the average size of an American home has doubled from 950 square feet to 2,000 square feet, but the main problem is that although housing prices are rising, the wages remain the same. With rampant consumerism threatening the planet, people are questioning whether bigger is better. In recent decades tiny house on foundation has become an innovative and affordable housing solution for aspiring homeowners. This trend is no longer confined to millennials and minimalists but now stands out as a promising solution for the housing crisis. While it’s still unclear how many tiny homes are there in US, the demand for tiny houses on foundations is rising. As per Technavio, PR News Wire, the tiny home market is expected to grow by 3.33 billion dollars over the next four years, and more than half of this growth will be from North America. As per Zack Giffin, the co-host of Tiny Home Nation and Operation Tiny Home and the Vice President of Tiny House Industry Association, “either we solve the housing crisis by cutting down the trees or build small spaces with minimal materials that are energy efficient and requires fewer resources for heating and cooling.”


Tiny homes – The ideal choice for affordable housing

The cost of a single-family house varies widely from one state to another, but the US average is around $327,514, as per Zillow.Com. Again, as per Harvard University’s 2020 State of the Nation’s Housing Report, 30% of US households, around 37.1 million, are cost over-burdened and fall under the low-income group. Apart from environmental advantages, a tiny house on a foundation cost much lesser and can shelter homeless people in the US. 

In Detroit, Michigan, the Cass Community Social Services is building 25 tiny houses to serve as low-income housing. Residents can rent the houses, and after seven years, they are eligible to own the property. MilwaukeeDenver, Wisconsin, Olympia, and Colorado are a few other tiny home communities offering shelter to homeless people. 

As per Business Insider, between 2018 and 2021, at least 63,456 tiny houses were built in California backyards. There is a mini-boom in ADUs and even the legislation promotes accessory dwelling units. As per (Tiny Home Industry Association), the tiny house on a foundation, or ADUs have filled backyards from San Diego to San Jose after the state lawmakers started breaking down the barriers and welcoming tiny houses. As per a state data analysis by Terner Center for Housing Innovation, California has approved permits for 22,663 ADUs in 2021, which is why the popularity has grown over the last few years. The state’s promotion of ADUs is helping in affordability but has yet to put a dent in the shortage of homes. California’s ADU revolution might still be in the nascent phase, but it has encouraged other states to implement similar laws. States like Maine, Oregon, and Nebraska and cities like Miami have already enacted similar laws, while New York and Washington are considering ADU legislation. 

Dire shortage

Housing affordability has started waning at a faster rate. The average American household can’t afford to buy a traditional house and is struggling to pay the rising rent. As per Marketplace, a typical renter spends more than 30% of their income on housing and is rent burdened, which makes the renter poorer and reduces his financial strength. To solve this problem, lawmakers are now relaxing rules on tiny houses on foundations and allowing individual owners to build additional units on their existing lots. Although it’s still not applicable in every state in the US, it’s a win-win situation. Homeowners are adding value to their property. At the same time, many generate extra income by renting these houses on foundation, which again addresses the state’s conundrum of incentivizing buildings in populated zones where the structures are few and much more expensive. 

Housing and health 

As per a 2019 study, around 64,000 homeless people living on the streets are more likely to report health conditions like substance misuse, trauma, and mental health issues than individuals with temporary shelters. Therefore, the National Coalition for Homelessness executive director, Donald Whitehead Jr., thinks that tiny houses are a great choice for emergencies to protect people from violence and elements. 


Are you planning to downsize?

If you are planning to downsize, then here are a few things you must consider:

Firstly, most states in the USA, except for some parts of California and Maine, recognize tiny houses on wheels as recreational vehicles rather than permanent residences, which means financing can be difficult for such structures. Traditional home loans are unavailable for tiny houses on foundation or wheels. Even RV and personal loans come with higher interest rates.

Secondly, be aware of the complicated building and zoning rules which can vary from one state to another. To address these challenges, you can look for tiny home builders at TinyHouseMe. We connect you with multiple home builders offering tiny houses on foundation. We also help plan and finance your tiny home dream project. To book an appointment with your matched builder, join our platform now