Tiny houses mean financial freedom to some homeowners

A tiny house in Portland, Ore. on July A tiny house in Portland, Ore. on July 31, 2012, can be ready to roll. The tiny house movement is, well, tiny, but beginning to fill a need for some. Photo Credit: AP

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Doug Immel recently completed his custom-built dream home, sparing no expense on details like cherrywood floors, cathedral ceilings and stained-glass windows in just 164 square feet of living space including a loft.

The 57-year-old schoolteachers tiny house near Providence, Rhode Island, cost $28,000 a seventh of the median price of single-family residences in his state.

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I wanted to have an edge against career vagaries, said Immel, a former real estate appraiser. A dwelling with minimal financial burden gives you a little attitude.

He invests the money he would have spent on a mortgage and related costs in a mutual fund, halving his retirement horizon to 10 years and maybe even as soon as three. I am infinitely happier.

Dramatic downsizing is gaining interest among Americans, gauging by increased sales of plans and ready-made homes and growing audiences for websites related to the niche. A+E Networks Corp. will air, beginning July 8, 2014, Tiny House Nation a series on FYI that celebrates the exploding movement.

The pared-down lifestyle allows people to minimize expenses and gain economic freedom, said architect Jay Shafer in Cotati, California, who founded two micro building and design companies and is widely credited with popularizing the trend.

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It shows people how little some need to be happy, and how simply they can live if they choose, said Shafer, 49, who shares a 500-square foot home with his wife and two young children.

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Despite gains in the labor and housing markets, Americans choosing mini houses remain wary of tethering themselves to a mortgage.

People want a more modest lifestyle now, said Derek Diedricksen, who travels nationally to lead building workshops. Those who opt for super-small structures dont want to waste their time or be a slave to a house they dont fully use.

Defined as 500 or fewer square feet, tiny houses range from primitive 96-square-foot huts to award-winning displays of sustainable architecture with elegant streamlined design. While many are built on wheels to avoid regulations, mobility isnt the main draw.

Aldo Lavaggi, 36, can support himself as a folk musician in New Yorks Hudson Valley thanks to the 105-square-foot home he built on a friends farmland in the Berkshires and has lived in since August 2012.

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POCKETING THE CASH
Theres a fallacy of limited options, he said, arguing that people dont need stellar credit, thick wallets or even a full-time job to own a house. His residence runs on a car battery and energy from two solar panels. He pockets enough cash to splurge on artisanal bread and gourmet cheeses from the local market. Im earning more than I spend, he said.

Even with the micro-trend, the number of tiny houses in the U.S. is, well, tiny just in the thousands per unofficial industry surveys. Their popularity is growing, however, as the U.S. home ownership rate has fallen to 64.8 percent, the lowest in almost 20 years, and the median size of new single-family houses is the biggest ever 2,384 square feet in 2013, a 3.4 percent increase from 2012.

Historically, residences under 500 square feet werent considered tiny. In 1950, houses averaged 983 square feet, according to data from the National Association of Home Builders. The first units in the iconic Long Island suburb of Levittown,  were 750 square feet.

When Laura LaVoie began writing and blogging about the movement in 2010, there were only one or two tiny house blogs and now there are hundreds, she said.

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PURSUE CAREER
She quit her Atlanta-based job as a recruiter at a staffing company, sold her 2,700 square-foot house and pursued a career as a freelance writer by building a place with her husband in the mountains of Asheville, North Carolina.

I felt really trapped, she said. Moving to a 120 square-foot space enabled them to live in a different way, take control of our lives.

Postings on online marketplace Tiny House Listings have increased in volume since 2011, while the sites Facebook fan count hit 182,000 on July 8, up 5,500 from the previous week. Google trends shows national interest in the search term tiny house surging since May.

Since I got into the small-house game 15 years ago, every year seems like its the biggest ever, said Shafer, who founded the Tumbleweed Tiny House Co in 1999 and started another, Four Lights, in 2012. The need for it just becomes increasingly apparent.

REAL ESTATE REFUGEES
Some advocates are refugees from the recent real estate bust. Macy Millers 2,500-square-foot Idaho home was foreclosed on in 2007, after her divorce. I have absolutely zero interest in tying myself up with that kind of loan ever again, she wrote in an email.

In 2011, Miller literally took matters into her own hands, building a 196-square-foot timber home on a trailer in Boise, Idaho. She completed it in 18 months for $11,000 with zero debt, pays $200 a month to rent the land and shares the space with her partner, their baby and a 100-pound Great Dane named Denver.

Aspirants to the lifestyle tend to skew female, according to Tumbleweeds web traffic, said Debby Richman, the Sonoma, California-based companys chief marketing officer.

Tiny houses are no longer strange, she said. They are now cute. The cultural mores have changed.

The largest share of inhabitants, 23 percent, are between ages 31 and 40, according to a blog, The Tiny Life, which surveyed more than 2,600 dwellers in the United States. Almost 90 percent said they had at least some college education and 61 percent had zero credit-card debt.

21ST CENTURY SEARS ROEBUCK HOUSE?
This is the second coming of the Sears Roebuck house, said Richman, referring to the ready-to-assemble mail-order kits. Sears sold about 70,000 of these homes between 1908 and 1940, according to the company archive website.

There are several geographic hot spots, according to Richman. While its easier to build in rural areas where zoning laws are less restrictive, Portland and Seattle have attracted builders because of their open-mindedness, she said.

Wherever you find expensive housing on the East Coast or the West Coast, you find a higher concentration of tiny houses because people understand the need, Shafer said.

In Washington, D.C., Boneyard Studios advocates mini homes as a solution to underutilized spaces, known as infill. The site showcases three places in a triangular alley lot, once filled by illegally parked cars. Theres a communal fire pit, hot tub, outdoor oven and garden. Boneyard has a legal address, electricity and uses incinerator toilets and a rainwater-collection system with RV-like water pumps.

ZONING RESTRICTIONS
The homeowners, who lead tours every few weeks for about 50 guests, cant call these structures permanent legal residences because of zoning restrictions. To get around that, Boneyards builders constructed the houses on wheels, making them technically travel trailers.

The codes exist to maintain standards, said Ellen McCarthy, director of the citys Office of Planning, as she praised Boneyards high-quality and environmental stewardship.

We need some level of controls so people arent setting up squatter camps in alleys, she said. Were trying to recognize that peoples situations require a variety of different living arrangements. The planning office recently proposed easing restrictions that could pave the way for legalizing tiny houses in backyards.

PARTING WITH THE STUFF
Until recently, the movement was so small-scale it flew under the radar of local, state and federal authorities. The lack of legal parameters might be the biggest barrier to growth, said LaVoie. People feel intimidated by zones and coding, she said.

Pent-up demand will drive legislation, said Matthew Campbell, co-founder of Frontier Fortress, a Wyoming-based tiny-house company. The laws are going to change. They will have to.

On a personal level, the psychological hurdle of parting with ones possessions restrains a large number of people from going tiny. While liberating for some, dramatic downsizing can prove too taxing on the psyche for others.

Shafer, the movements champion, said it took him years to figure out how to thrive with less.

Immel, the schoolteacher who finished his home in late 2013, said he wasnt sure the lifestyle would suit him long-term. He built the house with resale in mind, just in case.

His home, which has a facade thats 20 percent glass, doesnt feel claustrophobic, he said, and heating it through the harsh winter was next to free. With total expenses about $900 a year, including about $112 for propane and the rest for electricity, his $40,000-plus salary easily sustains him and his savings account.

The best thing about his little house, he said, is how it gave him complete peace of mind.

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