The recent rent crisis in the US has hit the country hard, with affordable housing becoming a scarce commodity and average rents completely out of reach for most people who work at or around minimum wage.
With interest rates at a record high and a shortage of available housing for purchase, home ownership is also becoming hard to accomplish for many.
This widespread lack of affordability has led to alternative ideas hitting the market. The concept of tiny houses, for instance, is not new, though options are emerging that speak to the market’s demand for affordable and sustainable living options.
The Benefits of Tiny Houses
From retirees to those who want to seek out eco-friendly housing options to those who run the risk of being unhoused, every prospective homeowner today is on the lookout for better housing options.
Tiny cottages may be the answer to all of the pain points emerging from these groups. The newest tiny cottages that are hitting the market can be as affordable as $99 a month, which is considerably lower than the average US monthly mortgage payment of $1,427.
For retirees looking to downsize, the option of a tiny cottage can allow them to live a more minimalist lifestyle at a much lower cost. Because many retirees are on a fixed income, eliminating the worry of a large mortgage payment could radically reduce the financial stress of the big life change that comes with retirement.
Tiny cottages are also a great option for those who have a vested interest in sustainable living. The newest cottages made available in recent years can be run entirely on solar panels, with some producing more energy than they consume, opening the door to “off the grid” living for those who seek it.
Many of these new sustainable tiny homes also come with eco-friendly inclusions such as advanced water filtration systems, allowing owners to forgo hooking up with municipal water and sewer if they so desire.
The affordability of the newest tiny cottages is what appeals to most. With prices for many tiny homes beginning around $25,000, this housing option comes at a significant cost reduction from the other options available, such as apartment living or taking on a mortgage for a single-family home.
Furnishing Your Tiny House
The design elements of the newest tiny cottages are one of the most appealing aspects of this housing option. It can likely be discouraging to watch shows on HGTV and feel like the modern design trends are out of reach of one’s budget or available space. However, modern tiny homes are designed with not only affordability and sustainability in mind, but aesthetic appeal as well.
Several popular modern design touches such as shiplap, solid wood cabinets, farmhouse aesthetics, or sleek minimalism have been integrated into the design of these cottages. Many of these cottages exude luxury, even on a humble budget. Tiny home purchasers have a litany of small space options available to them to customize their tiny homes and make them their own.
What insurance coverage do you need for a tiny home?
Rising homeowners insurance rates are a significant concern for many, as the rising cost of insurance can often put homeownership out of reach.
Most tiny homes do not fall under the average homeowner's insurance policy. Instead, tiny cottage owners will have their homes placed under a mobile/manufactured home policy, a specialty policy, or an RV policy, depending on the specifics of the tiny home they choose.
While it may not be required by law to hold insurance on one’s tiny home if one pays cash, holding a mortgage or financing on the tiny home may activate an insurance requirement. Given the increase in popularity of tiny home living, there are many options popping up for insuring this new investment.
More often than not, the cost of insuring one’s tiny home will likely be far less than holding a policy on a large single-family property. It may even be less than renter’s insurance in some areas.
The Future of Tiny Homes
Tiny homes may very well be the future of sustainable and affordable living. With no end in sight to the rising cost of home ownership and the availability of affordable housing, turning to tiny home living could be a viable solution.
Homeownership is a dream many have and have been unable to obtain for various reasons. As more town ordinances begin to allow tiny homes, this opens up more opportunities to purchase land within those areas for a tiny home, bringing the American dream back into sight for many.
To many Americans, obtaining a large home with storage for all of one’s things comes part and parcel with being an adult. However, there have been movements that push back on this seemingly unending quest for more consumption.
The tiny home movement could be our chance to take a step back, collectively, and consider how much we need, how much we could do without, and how much space it is necessary for us to occupy. As we move into the future, sustainable living is on the minds of many.
Per the American Institute of Architects, tiny homes sized between 100 and 400 square feet produce approximately 2,000 pounds of CO2 emissions per year. This stands in stark contrast to the average American full-sized home, which produces a whopping 28,000 pounds of emissions per year. For those hoping to change the trajectory of our society when it comes to climate change, a tiny home revolution could be right up their alley.
While tiny home living is not likely for everyone, it is a viable, stylish, and sustainable option for a number of groups — from the unhoused to retirees. Downsizing and focusing on minimizing one’s carbon footprint does not necessarily mean sacrificing style, luxury, or comfort.
The tiny home boom is changing the way we look at housing and, on a larger scale, how we view the American Dream.
Justin Draplin has been recognized by Crain's Communications at their Salute to Entrepreneurs conference. Draplin has been on both local and national television, including NBC Nightly News with Brian Williams and Bloomberg TV, and has been featured in the Wall Street Journal, Crains Detroit, INC Magazine, and other publications. His primary focus is on developing ECLIPSE Cottages to be a worldwide leader in housing technology and development.