The Rise of the Tiny Home

In part, tiny houses have gained popularity because of front-page stories and coverage in news and entertainment shows. Yet, the popularity of those homes has deep roots in practical issues. Owners downsizing to tiny houses experience savings in overall building costs, taxes, and utility costs. The tiny houses use much less energy than traditional-sized homes and support a sustainable lifestyle.    Maintenance for a tiny house takes much less time and budget because of the smaller footprint.

What is a Tiny House?

The American Tiny House Association defines a tiny house as a standalone structure that has no more 400 square feet of living space. Some tiny houses remain on wheels and offer the advantage of mobility. Tiny houses may represent a low-cost lifestyle and not have many amenities or may include exotic and expensive furnishings and services. Purchase costs for finished tiny houses range from $8,000 to $60,000. Given the lower purchase cost of a tiny house, owners may have an opportunity to forego a mortgage and save on real-estate taxes and fees.

Tiny House Utility Costs

The small size of a tiny house translates into decreased heating, cooling, and lighting costs. Looking at national comparisons, the average energy consumption costs for tiny houses depends on the type of system used. For example, a tiny house using propane as a heating source has monthly heating and electrical costs ranging from $100 to $150. At the other end of the spectrum, some owners opt to pay larger up-front costs and use solar energy for lower monthly fees.

Tiny House Property Tax and Insurance Costs

Most insurance companies require the certification of a tiny house through the National Association of Alternative Housing before providing coverage. Because tiny houses present the option of either building on a permanent foundation or retaining mobility and keeping the house on wheels, insurance classification costs vary from state. When setting the standards for tiny houses, most states follow the 2009, 2012, or 2016 versions of the International Residential Code.   

Again considering the smaller size of a tiny house, owners may receive lower personal property tax bills. As with insurance costs, property taxes vary on whether the structure remains permanently fixed to a foundation or if the tiny house rests on a trailer. In addition, some zoning laws may affect the property taxes for a tiny house.   

Simplicity and Functionality

The smaller size of a tiny house simplifies maintenance and repairs. With less area to cover, owners can easily maintain the appearance of a tiny house. Repairs that carry high costs for a traditional-sized home seem much more reasonable when scaled to the size of a tiny house. While many tiny houses serve as the main dwelling space for families, some individuals build tiny houses to serve as guest houses, mother-in-law suites, and offices. The affordability of a tiny house allows families to support the housing needs of the elderly and preserve independence.