Frank Olito, March 26, 2021
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In 2016, Carley Jackson was living in Louisiana when a natural disaster flooded half the state. With her apartment destroyed, she was forced to move into a hotel for a month. 
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At that moment, Jackson decided to fast-track her dream of living in a tiny house, something she had been fantasizing about for a decade. She moved to Austin — a more tiny-house-friendly city — in 2019, and while there, she saved as much money as she could for her future home. 

But, in 2021, Jackson learned her tiny-house dreams may not become a reality. 
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Based on past tiny-house costs she'd found in her research, Jackson saved $50,000 and thought she had enough to finally start building her home. She worked with a consultant to design a basic 26-foot tiny house with a downstairs bedroom, lots of storage, and a dishwasher for herself, her boyfriend, and their dog. 

When they began pricing builders, Jackson was surprised to learn their tiny house would actually cost $70,000 to $80,000. Jackson was about $30,000 short. 

"It was shocking," Jackson said. "You plan something and you have a dream in your head, and then it all falls apart. It's extremely frustrating."

Jackson isn't alone. Potential tiny-house owners across the country are frustrated with the growing cost of tiny houses and are being forced to give up their dreams of joining the movement.

The prices of tiny houses today are vastly different than they were a decade ago

When the modern tiny-house movement started in the early 2000s, it was advertised as an affordable way to own a home. Shows like "Tiny House Nation," which premiered in 2014, perpetuated the idea that people could buy a tiny house for cheap, but as the movement took off, those cheaper homes became less of a reality.  
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"In the very beginning, I don't think anyone knew exactly how much the homes we were building on 'Tiny House Nation' cost," Zack Giffin, host of the series, told Insider. "The homeowners would have a set budget and we would deliver a home regardless. The product integrations and the labor from myself and my crew were never even calculated."

The median cost of a tiny house today is around $60,000, and the price keeps climbing as the demand for these smaller structures increases and builders push the boundaries of what a tiny house can look like.

David Latimer of New Frontier Design, for example, created the Escher, a family-friendly tiny house that starts at $180,000. It includes a chef's kitchen, two bedrooms, a modern bathroom, and a walk-in closet. Although the Escher house is far from where the movement started, some say this is where the movement is heading. 

However, the price for tiny houses without high-end amenities — like Jackson's proposed design — is also increasing across the board. 

Lindsay Wood, who runs a tiny-house consulting business and who worked with Jackson in designing her house, said she has seen prices increase drastically even in the past year. Wood said one to two years ago, you only needed $50,000 to purchase a common 8-by-24-foot tiny house. In 2021, you need $65,000 to $75,000.

Prices of materials have also gone up significantly thanks to the pandemic

When the coronavirus pandemic began, it sparked an increased interest in tiny houses, as new demographics looked for safe ways to travel and to take their work on the road. 

As the demand went up, builders and material suppliers struggled to meet it because they were already trying to contend with new COVID safety measures to keep their employees safe. 

"It's more difficult for every business," said Nick Mosley, whose company, California Tiny House, built 30 houses last year. "Lumber mills aren't able to staff as much as they normally would and it may be slowing production."
CNBC found a 112% increase in lumber prices during the pandemic as remodeling became a popular quarantine activity in 2020. Similarly, Mosley said he used to buy beams for $2.50 each, and now they're $7.50 each. 

"It doesn't sound like a lot of money, but when you're buying 500 to a thousand two by fours, a $5 increase is drastic," Mosley said. "And then that carries in through each house we build." 

Mosley added that at the end of 2020, his supplier of trailers — the foundation for every tiny house on wheels — announced their costs will increase 5% in 2021 because their supplier hit them with a steel price increase. It's a chain reaction that ultimately affects the tiny house owner. 

"Materials costs nationwide are increasing and that's driving up costs on a lot of tiny-house builders," Mosley said, adding: "The only way not to lose all the money we are paying out to meet material increases is to increase our prices, too." 

Giffin says this price increase is actually great for the future of the movement

In most parts of the US, tiny houses are still considered RVs and people cannot live in them full-time. The Tiny Home Industry Association is working to pass zoning ordinances and building codes across the country to allow for the legalization of tiny houses. 

It's a difficult process but, interestingly, Giffin said he thinks the rising costs of tiny houses could help push this initiative forward. 

"Even though there's not a uniform building code of tiny homes, the cities are making up their own requirements, and essentially, they're requiring quality materials. They're requiring fire egress. They're requiring handrails," Giffin said. "In order to be allowed into communities, we need to be building nice tiny homes."

Not only could the expensive price tags help in the legalization process, but Giffin said they could also lead to better financing options for potential tiny-house owners. In the eyes of most large banks right now, tiny houses are not considered homes, so potential owners cannot get a mortgage. If tiny houses are built with better materials and with more quality control, Giffin said he hopes banks will start to recognize them as actual homes. 

"If you could get a mortgage on a tiny home and deal with those same kinds of interest rates, you wouldn't be [saying], 'Oh, my God, it's $100,000.' You'd be like, 'Whoa, I got this thing for $500 a month,'" Giffin said. 

Still, tiny-house owners are struggling to meet this new price tag

Wood said a lot of her clients are like Jackson, who is surprised to see how expensive a tiny house can be these days. 

"Sadly most of my clients are way off on the reality of the budget," Wood said. "Way off. I had someone call me and say they had $25,000. For that, you're talking a very tiny space with rental appliances." ​

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Thank you Ethan Waldman with ​#tinyhouselifestylepodcast for your ongoing work to improve the Tiny Home Industry. 

When I was 24 years old,  I was living in the North Beach neighborhood “little Italy” of San Francisco.

I paid $300 a month to live in the dining room of a San Francisco apartment. We each had our own door to get into our rooms only my room had the fireplace which was never used.

We lived on one of those alley ways in North Beach and it was quite a Rapunzel experience where the eligible men would be calling on the three ladies that lived there from street below. We lived only half a block from the neighborhood bar which every Thursday, Friday and Saturday night echoed music and sounds of lively young people enjoying a good night out on the town.

One day as I was walking through the streets of North Beach, I went into a café and met a strikingly handsome young man who within a matter of weeks became my boyfriend.

This was my second love and it had been a decade since my last one. Imagine… your second love, you’re in your early 20s and you’re in one of the most romantic cities on the planet… LIFE WAS EASY AND GOOD.

About seven months later my boyfriend tells me that the city life, while fun, was just too much and he’s moving back to Duluth, Minnesota to be with his family. He was a financial advisor and his family had a thriving financial practice back in Duluth. Instead of being a small fish in a big sea he chose to be a big fish in a small pond.

So what does a girl who’s in her early 20s do when the second love of her life tells her he’s leaving? She says… “I’m going with you”

At this point, I had lived with one of my dearest friends for my senior year in college at Chico State and had lived with her for my first year single year in San Francisco so it was one of those tough moments  breaking up the girlfriend vibe.

”I’m in love, I told her”, And she just looked at me and said, “go for it I love you”, with a slightly doubtful look on her face, but a knowing that I simply had to figure this one out on my own.

Off I went to Duluth Minnesota with 20 of my personal belongings in tow. Upon arriving I meet his other brother and sisters (he had a large family) and we toured their summer family cabin which was set on one of the thousands of lakes home to beautiful Minnesota. It was late spring early summer and the thought of the Minnesota winter was far from the mind.

Unfortunately, something was a bit off with us and the move for me was not what I expected. Finding a job seemed like a huge task and I wasn’t getting very far. After several nightly fights I said to him “I’m living my life through you”.

One thing about me is when a relationship ended, it ended there was no prolonging of our relationship or getting back together Bouncy house that I have witnessed other friends endure. It’s just not in my make up to be in limbo, when you know you know, and my motto for love was , “NEXT”.

So I hop back on a flight to San Francisco only two weeks after I had arrived in Duluth Minnesota. While it was short in time, it was a massive transformational move for me and my stepping into adulthood.

Coming back to San Francisco, my girlfriend had already found another roommate and had moved on with her life. I found myself putting back the pieces of my life, making new friends, looking for new places to live and figuring out my next career move.

I share the story because when my dear friend Keri G with @Ifwisheswerehorses school bus sent me this text announcing...

“The Duluth Economic Development Authority has unanimously approved the transfer of five vacant land sites around the city to developers. They plan to construct tiny homes and townhomes on the sites.”

Wow if only I had just stuck it out in Duluth I could be that tiny home developer!

Lol, I am grateful for the path that I was on and that got me to Duluth for those two weeks in the summer of 1994.

Kudos to Duluth Minnesota for stepping up and seeing how Tiny Homes play a huge role in creating “real” affordable housing.

Note: I say “real” because here in the state of California affordable housing actually costs cities and counties $480,000 a door.

Be very clear our traditional way of affordable housing involves taxpayer dollars to create it. Alternatively, with tiny homes, NO tax payer dollars are needed, the homeowner does not incur additional property taxes and we get to house people in a new affordable Tiny Home in a matter of months versus waiting for years.

To read more about the Duluth economic development authority tiny home plans click on the link below.

https://www.wdio.com/duluth-minnesota-news/deda-approves-transferring-land-development-tiny-homes/5992478/