Why the Tiny Home Movement May Not be So Tiny

by | Feb 13, 2014 | Business Trends

Thomas Frey Futurist Speaker why the tiny home movement may not be so tiny
Most of us hate feeling cramped. We hate being stuck on a crowded plane, stuck in congested traffic, and wading through packed concert halls. We like to be able to stretch out, get casual, and relax, but we can’t do that when people are invading our space.

Over the past century, space has become synonymous with wealth, status, and luxury. Naturally the most important people have the biggest houses, biggest cars, biggest boats, and work at the biggest corporations.

In 1900, the average house in the U.S. was a mere 700 sq. ft. with an average of 4.6 people living inside. A hundred years later, the average home had mushroomed to 2,500 sq. ft. with only 2.5 residents.

As a society we’re caught up in a self-perpetuating make-money-spend-money loop that blinds us to other possibilities. We’ve been in a race to the top and a tremendous number of service organizations have cropped up that both heighten our fear of missing out and provide quick financing to buy the “good life” today with tomorrow’s money.

But the recent recession delivered a sobering gut-check to life as usual. Easy money has caused housing prices to spiral out of control, and all of the things we thought were so important, suddenly became less so.

Out of this has sprung a low carbon living crusade as a natural follow-on to the green and renewable energy movements. But it tends to be less about solving the world’s ills and more about people taking control of their own destiny.

At the heart of this movement are a new breed of tiny homes that are comfortable, efficient, often portable, and most important, mortgage free. They represent freedom, freedom from debt, freedom from conspicuous consumption, and freedom to live a life of passion.

Here’s why the tiny home movement is likely to be far more than a tiny blip on the radar screen of change.

Thomas Frey Futurist Speaker Tiny homes come in a wide variety of shapes and sizes

Tiny homes come in a wide variety of shapes and sizes

The Emperor has No Clothes

Young people feel like they’ve been lied to.

Gen-Y, or Millennials, were born between the early 1980s and the early 2000s. They’ve inherited a country that is broken. From the worst economy in 80 years, to a post-9/11 surveillance state, to a dysfunctional healthcare system, they have indeed been dealt a losing hand.

They were told the path to success was an overpriced college degree, but even with tons of education, very few are employed in jobs that require a college degree.

  1. Only 6 in 10 Millennials have jobs, half are part-time [Harvard University]
  2. 284,000 American college graduates were working in minimum-wage jobs in 2012. [Wall Street Journal]
  3. 48% of employed college graduates work in jobs that don’t require a four-year degree. [The Center for College Affordability and Productivity]
  4. 63% know someone who had to move back home because of the economy. [Pew Research]
  5. 35% of employed Millennials have started their own business on the side to supplement their income. [Iconoculture]
  6. 90% say being an entrepreneur is really a mindset instead of just the role of a business owner [Millennial Branding / oDesk]
  7. Over 63% of Gen Y workers have a Bachelor’s Degree. [Millennial Branding / PayScale]
  8. They are now on track to become the most educated generation in American history. [Pew Research]

As a result, we have the world’s highest educated workforce of bartenders and waitresses.

 Thomas Frey Futurist Speaker Inside view of a tiny home
Inside view of a tiny home

Tiny Homes Defined

In general, tiny homes represent simple living in small homes. A small house means less room for clutter, less energy costs, less taxes, and a smaller ecological footprint.

Other than that, there are very few rules that govern tiny homes. Most are under 300 sq. ft. with some even less than a third of that, but others in the 400-500 sq. ft. range.

Construction varies widely from DIY wood and shingles, to retrofitted shipping containers, to unique architecture with alternative energy systems. Some are mobile, some transportable, and some fixed-foundation. Some are single person homes, others for couples or families. Some consist of durable construction, others will only last a few years.

Thomas Frey Futurist Speaker Constructed with an old shipping container

Constructed with a old shipping container

A number of companies are sprung up offering pre-built tiny homes:

Other companies are helping people build their own:

For some, these may be the perfect second home, cabin in the mountains, or vacation place along the coast. Others may want them as their primary residence.

Thomas Frey Futurist Speaker Ella Jenkins and her father building her home

Ella Jenkins and her father building her home

The Ella Jenkins Story

Ella Jenkins of Frazier Park, California, is a 23-year-old “homeowner.” She built her own house, and it has everything she needs, in only 130 square feet and it’s built on a trailer frame. Total cost was $16,000 to build, and she constructed it with her father in the driveway of her family’s home. It was a yearlong DIY project. But no mortgage or rent means she has the economic freedom to pursue music and art. She won’t get forced into a career path she doesn’t want.

Thomas Frey Futurist Speaker Inside Ella Jenkins home
Inside Ella Jenkins home

Eight Key Things a Huge Mortgage will prevent you From Doing

In the movie Fight Club, author Chuck Palahniuk makes a rather profound statement when the lead character Tyler Durden says, “The things you used to own, now they own you.”

We make many tradeoffs throughout our life and most of them somehow pass through our internal filter for what constitutes the good life. In doing so we find ourselves caught up in an endless quest for more, which invariably costs us time and money at every turn.

One of the biggest boat anchors for our lives tends to be our home and the gigantic home mortgage that comes with it. We sacrifice much for the sake of paying our mortgage. Here are some of the things we give up:

  • No Life of Passion – Want to be a musician, writer, artist, poet, actor, actress, clothing designer, or movie star? The job you take to pay your mortgage will almost always get in the way.
  • No Time and Money for Travel – Are you jealous of people traveling to China, Brazil, Norway, and Italy? If you didn’t spend money on paying rent or a mortgage, how much money could you dedicate to doing something else?
  • No Spending Time with Family and Friends – Because you’re always working, family and friends always seem to come in second place.
  • No Ability to Move Quickly – Selling a home is a complicated, time-consuming process with a huge number of fees and commissions.
  • Limited Ability to Switch Jobs – Once you’re in a home, your ability to switch jobs and careers is clouded by the number of employers in close proximity to where you currently live.
  • No Ability to Explore New Cities – New cities mean new cultures, new friends, and a new way of thinking.
  • Limited Ability to Find New Opportunities – If you come across a new opportunity, but it requires you to live somewhere new for 3-6 months, being tied to a home makes that nearly impossible.
  • No Time for Dreams – How do dreamers live? What is that big dream that you’ve had on hold forever? Would you go to Burning Man? How would your life suddenly be different if you were no longer tied to a job or a location?

Thomas Frey Futurist SpeakerCurrently there are no tiny home communities

Currently there are no tiny home communities

The Missing Pieces

Currently no city has stood up and labeled themselves as “tiny home friendly.”

This means there are no tiny home neighborhoods, no tiny home parks (like trailer parks), and no rules, laws, or ordinances governing their construction, installation, and transport.

If you own a tiny home and drive it into a new city, you may have difficulty finding a place to put it. Yes, you can always pull into a local KOA campground and hang out there with all the RVs and campers, but tiny homeowners are looking for better ways to integrate into a community.

These missing pieces mean huge opportunities for the future. Here are a few of the opportunities for someone wanting to capitalize on this trend:

  • Tiny Home Pads – If you have a large yard, just add a pad with power and utility hookups and you can generate extra rental income for very little investment.
  • Airbnb Rental – If you add a tiny home to your back yard, rent it out through Airbnb.
  • Tiny Home Association – As the numbers grow, this industry will need more clout when it comes to city rules and regulations. Each state will eventually have tiny homeowners associations.
  • Tiny Home Realtor – Since many of these homes are mobile, people will easily travel cross-country to pick up a home they buy.
  • Tiny Store Front–Home Combined – Not only a place to live but a way to earn a living while traveling as well.

Thomas Frey Futurist Speaker Leaving town and take your home with you
Leaving town and take your home with you

Final Thoughts

Think of this as an obvious backlash to the banking, mortgage, and credit card industry. It’s also a backlash to glutinous consumption, poor job opportunities, and young people feeling betrayed by older generations.

Living in a trailer house has a bad connotation. But living in an even smaller tiny home, that has many of the same features as a trailer house, is suddenly all the rage, sheik and cool tied up into one super cute little package.

But the big thing this trend offers is freedom, and that’s not easy to quantify. It’s not just an efficient lifestyle, but a culture, a door-opener, a character-builder, and untethered nobility all rolled into one.

Cities will have to adapt. People without permanent ties to a community are difficult to regulate and factor into city planning, but people with tiny homes will happen anyway.

I’ve only mentioned a few of the possible opportunities ahead, but there will be many more. So I’d love to hear your thoughts on the tiny home movement and how it will affect your thoughts on home ownership in the future.

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