November 1, 2018 Shakari McGill

Tiny Homes: Paying the Cost for Surface Area Loss

One could argue that the first tiny home was that of Henry David Thoreau at Walden Pond. Thoreau built this home as an “experiment in simplicity,” that is, to live by the most basic means and take in all that life has to offer. This sentiment reappeared in the 80’s through the mid-2000’s as literature and, as a result, design-build companies began to pop up. Tiny homes as a viable alternative to the “traditional home” officially became cemented as a trend in late 2008-2009, coinciding with the housing crisis. But if they’re meant to be affordable alternatives for builders and prospective homeowners alike, why are they so expensive?

Developers felt a great sense of hesitation in returning to pre-crisis levels of construction, fearing they would lose their profits to another housing crisis. With the value of homes in the red and a lack of property available to purchase, many homeowners and prospective homeowners started looking into downsizing, thus the tiny home surge began. These homes started off quite affordable, running the gambit from $25,000 to $35,000, but factors such as market oversaturation and material adaptation have skyrocketed prices to the $60,000 to $180,000 range.

With the rise in popularity of TV shows such as Tiny House Big Living, Tiny House Builders, and Tiny House Nation, more attention has been brought to these homes and the industry. These shows romanticize ownership of a tiny home rather than addressing why the trend arose in the first place – the economic necessity of downsizing. Inspired by the chance to capitalize on captivated potential homeowners, some builders (certainly not all) have begun to offer this service, flooding the tiny home market and setting their own competitive price points.

On average, a 150 sqft tiny home can run around $266 per sqft in labor, whereas a traditional 1,500 sqft home runs $166 per sqft (excluding financing). Tiny home builder Chris Schapdick of Tiny Industrial says that this is because standard size building materials have to be altered to fit their new tiny spaces (Quora, 2018). In particular, plumbing and electric systems require custom alterations. Since no tiny house it completely the same, there is no “cookie-cutter” method to making these materials and systems fit.

Fueled by the housing crisis, tiny homes became a trend that changed the nature of housing. These homes were the answer to the woes of prospective homeowners and builders alike. At the peak of their popularity, they were glamourized by a plethora of shows on HGTV. This meteoric rise was not without its complications, however: The exposure led to oversaturation of the tiny house market and unconventional labor costs, which together explain the shockingly high price tags we see today.