SJ’s deregulated tiny home market to boost home ownership?

Scott Beyer of Market Urbanism Report confirms why tiny house construction must be accessible for developers — a timely issue, as the city of San Jose now allows tiny homes on wheels (THOWs) as of 2020. In a city short on supply and high on costs, tiny homes afford everyday residents the opportunity to purchase a home, debt-free. To receive daily updates of new Opp Now stories, click here.

There have long been efforts to produce affordable housing through various government subsidies and regulations. The premise of those who support such programs is that affordability cannot “naturally occur” through market forces. But under the right circumstances it can for various unit types, and one of those is “tiny homes.” Unfortunately, their construction is complicated or outright forbidden by zoning laws.

While there is no set definition of a tiny home, it is characterized by TinyHomeBuilders.com as a unit under 600sqft. Topher Thomas, a Durham-based tiny home builder who founded Coram Homes, describes their inherent affordability in a Zoom call as “simple numbers”—i.e. they require less materials than a standard home. While expenses vary by market, tiny home complexes in Texas rent for as little as $225/month, and are faster to build. A tiny homes project in Detroit rents units for $325/month, granting full ownership to tenants after 7 years.

But the regulatory climate has not been friendly. Business Insider notes that many jurisdictions have minimum unit size requirements that ban tiny homes. Density limits—which reduce the number of units that can go on given parcels—also make tiny homes financially impractical for developers to build. Additionally, there are often regulations against ADUs, RVs and trailer homes, all of which compliment the movement…

Especially in cities like Calhoun, where poverty is high, every additional unit, no matter how small, helps to improve affordability and prevent homelessness. By allowing these small construction types in every city, it would help refute this canard that the market cannot produce affordable housing.

This article originally appeared in Market Urbanism Report. Read the whole thing here.

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Image by James Frid