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The tiny house movement seems to offer the perfect solution to today’s housing crisis. With the prices of traditional homes soaring nearly 20%, it’s impossible for many workers today to afford the American dream — and the conventional means of establishing familial wealth and security.
Why aren’t these developments popping up everywhere? The answer lies in outdated codes and financial motivations — lenders and builders want to minimize risk and maximize profits. Here are the five roadblocks the tiny houses movement faces.
1. Building Codes
Every organized municipality adopts building codes specifying minimum dimensions for structures built on properties within their jurisdiction. Many base their standards on the International Residential Code, guidelines intended to protect consumer health and safety.
Municipal building codes following the IRC specify minimum size requirements. For example, habitable rooms must have a window and a closet while measuring at least 70 square feet. All rooms must have ceilings of at least seven feet.
However, the IRC only specifies that the minimum square footage for the build measure 120 square feet on a 320 square foot lot. Most tiny houses measure between 300 to 500 square feet, so what’s the problem? Unfortunately, many municipalities go beyond this standard, specifying all new builds be 1,000 square feet or more.
2. Zoning Ordinances
Zoning ordinances pose another roadblock to the tiny houses movement. This housing style comes in two forms: site-built and tiny homes on wheels. Zoning restrictions affect both.
For example, many municipalities specify how long a THOW can park in a designated area. These tiny houses fall under the RV category. Although no federal law restricts you from parking such a vehicle on your property, many local zoning ordinances prohibit living in a “camper” — even if it sits on land you own.
If you own land, you still run into those pesky building codes. However, you might be able to get away with adding a tiny house as an accessory building. You still need to check with your local ordinances to see if they permit accessory dwelling units — if so, you can convert a shed into a home for grandma or an Airbnb to rake in extra cash.
3. Financing Challenges
Many people who need tiny houses the most also struggle to obtain financing. Most traditional mortgage lenders won’t touch this property type unless it falls into the luxury category — pricing it comparable with a standard build. That’s not a feasible amount for many seeking affordable housing to pay.
While you can get an unsecured or RV loan to finance your project, you need good credit. Your score typically needs to meet or exceed 670 — a number that those who have had to use debt to finance daily bills often lack.
Why the difference? Lenders make money when they can sell your property at a profit, whether through foreclosure or passing ownership to another. Traditional mortgage brokers worry that tiny houses will lose value. Furthermore, THOWs depreciate like any other vehicle, meaning their value decreases instead of increasing with time.
4. Parking Woes
The determined will find a way. Handy folks can pick up a suitable trailer for less than $3,000 and build a THOW from scratch — master carpenters can do most of the work from scrap materials. However, that doesn’t solve the problem of where they can park once they finish their design.
Those on the east coast have the roughest time. Even highway rest areas impose a 3-hour time limit for parking — hardly enough to get a good night’s rest. You may have to pay campsite or RV park fees that can quickly add up, piling hundreds on your monthly housing costs.
Those out west have a slightly easier time of things, thanks to the greater availability of Bureau of Land Management areas for parking. However, they’re subject to a 14-day camping limit, after which time they must move outside a 25-mile radius until day 29.
Some folks manage this way and it isn’t uncommon to see miles of campers and THOWs in popular locations these days — so much so that authorities have begun closing some areas to prevent environmental damage. If you choose this route, locate several available parking spots and ensure your THOW is sturdy. Driving it over rough dirt roads to reach these locations takes its toll.
5. Disincentivized Developers
Finally, real estate developers are in business to make money. It might cost them $60,000 to construct a tiny home and $110,000 for a standard-sized model. However, they can sell the latter for up to half a million dollars in some areas, whereas they’ll barely recuperate their costs on the former.
Making the tiny houses movement a reality for the millions of displaced Americans in need of shelter will likely require governmental incentives for builders to construct such properties. Considering that federal authorities give short shrift to the enormity of the housing crisis, it’s unlikely that help will come from above. Local municipalities will need to lead the way and have much smaller budgets.
Roadblocks to the Tiny Houses Movement
Tiny houses seem like the ideal solution to today’s housing crisis. Why aren’t developers putting in more of these communities everywhere?
The five roadblocks above explain the slow momentum of the tiny houses movement. However, changing the rules can usher in a new era of more affordable housing for everyone.