Some believe bigger is better. You must have more: a bigger house, newer car, more stuff. Can’t afford it? Just put it on your credit card. This has become a societal mantra. However, there seems to be a shift in the wind. Millennials are entering the workforce with high levels of student debt, forced to share homes with roommates or even live at home. Older people are finding their retirement won’t sustain their home whether owned or rented. Young families are wanting to own but finding it difficult to get out of the rental rut. Three quarters of Americans (76 percent) live paycheck to paycheck. Homes typically account for half or a third of their paycheck. While that is the national average, people in Flagstaff might argue that the rental rates are a much higher portion here.
When Bigger isn’t Better.
There is an option growing in popularity: the Tiny Home movement. Typically, if you ask someone about a tiny home, they will describe a 65- to 400-square-foot home that may be towed behind a vehicle. HGTV has even capitalized on this with a very popular TV show. Tiny homes have become so much more than that. Tiny homes are not just little homes on wheels.
Benefits of Smaller Homes
People who have downsized from a large home into a tiny house, experience a number of benefits. Not only is their mortgage payment less, but so are all the utilities. They spend less time cleaning and maintaining the home, giving them more time to spend on hobbies and activities. Smaller homes also mean a smaller environmental footprint, which appeals to many people.
Challenges with Financing Tiny Homes
As with many new things, this change does not come without its fears. One of the challenges that people have found with traditional tiny homes is financing. It can be difficult to obtain a loan for a tiny home because banks don’t see them holding value, therefore no collateral. This is causing some people to pay cash or borrow money from friends or family. Secondly, is the question of where to put the tiny home. This doesn’t seem like it should be a problem because, after all, it’s tiny! But, finding a place to park is one of the greatest obstacles. Many municipalities do not allow people to park them for short or longer periods of time. And although some people have chosen the tiny home, it does not mean they want to be nomadic.
On the Horizon: Tiny Home Communities
Some developers are seeing this as an opportunity and building tiny home communities. As with all communities, these can vary widely. Some are merely slabs that resemble a campground. However, as popularity and demand grow, these are also growing as well. Some newer communities are groups of smaller homes in a neighborhood complete with parks and garages. While not the tiny homes on wheels, these are smaller homes usually about 1,000 square feet.
The advantage to some of these newer communities is that the homes are site-built, stick-built homes. You own the home as well as the land, rather than renting a lot. This new format means a bank views these homes the same as any other home, just smaller. This design enables multiple loan types to be obtained, opening home ownership opportunities to those who were previously excluded.
Flagstaff has so many activities that bring residents outside and in nature. These smaller homes, with less space to maintain and lower mortgages, give owners the time and means to fully appreciate and take advantage of their surrounding community. A tiny home can mean a big outdoor life. FBN
By Meagan Elliott
Meagan Elliott is a REALTOR with Russ Lyon Sotheby’s International Realty. She can be reached at 928– 607-3561 or via email at firstname.lastname@example.org.