Tiny Homes, Huge Potential

It probably comes as no surprise to hear that “tiny houses” make up only a sliver of any real estate market. In the United States, for example, only 1% of homeowners purchase houses that are no larger than 1,000 sq ft (93 sq m). And yet the micro-housing movement has made a large impact around the world—particularly in the United States and Japan—and will continue to do so in developing nations, due to the increasing rate of urbanization as well as shifting priorities among consumers.

In Asia, one needs only to spend some real time in, say, Hong Kong or the urban areas of Japan to see that many residents there are masters at utilizing small living spaces. For many, it is more a matter of practicalities and not trendsetting. Often times, however, the practice is taken to the extreme, when certain developers realized just how far they could go by charging premium prices for veritable shoeboxes—40 sq ft (just 3.72 sq m!)—in Hong Kong.

In the United States, the tiny house movement encompasses a more diverse demographic—those who refuse to be shackled with mortgage payments and high taxes, environmentalists, modern nomads, and millennials who are tired of living at home with their parents. An obvious factor which spurred this movement on was the financial crisis of 2007–08, and since then people everywhere are changing their priorities not only when it comes to home ownership but how society view living spaces in general. Evidence of this change is seen everywhere. Architects have gotten in on the game, refining designs to make lasting, aesthetically pleasing mini-houses. Especially ones on wheels.

The pros of this movement are obvious and more immediately demonstrated… but what about the cons? In Seattle, some residents have complained that plans for micro-housing developments will lead to excessive noise and lack of parking, due to the high density of tenants. Safe to say, this is a sentiment that could be echoed almost anywhere.

In certain prime neighborhoods, such as Manhattan’s Upper West Side, converting a tiny (and previously unremarkable) walk-up unit into a newly renovated modern “boutique” apartment would most likely only further “justify” already outrageous real estate prices, thereby making this unit out of the price range for most.

As with most change on this scale, there are always growing pains—new regulations to navigate and widespread public opposition to contend with. But for certain individuals, building or renting a tiny house early on is a fantastic way to guarantee themselves a more financially independent future. And, therefore, a life that is perhaps more on their terms.