This article is part 4 in a multi-part series, please refer to the previous publications for an introduction to Tiny Homes, a history of tiny homes, as well as an overview of current builders and technology
How tiny homes can become viable and successful
While it may seem like there are too many obstacles for this young industry to overcome, a number of promising ideas point to a true expansion of this type of housing in a manner that can meaningfully impact affordable housing. The key to success will be leveraging the right aspects.
The first is the potential for grid-alternative development.
Through an off-grid lens, the very things that have been discussed as disadvantages suddenly become potent competitive advantages in housing. Because these structures aren’t universally recognized as “homes,” they can be deployed strategically in a manner that doesn’t trigger the same review and land use restrictions that conventional housing does. For example:
- Sewer and wastewater treatment options: While a traditional home requires standard sewage treatment, tiny homes don’t always need to conform to the same guidelines, and recent developments in both composting and biogas technology have produced some innovative solutions for small-scale wastewater treatment. Biogas can also be an additional resource beyond just the treatment of waste.[1] Regardless of the technology system used, however, the final cost of such a system is dwarfed by the huge cost associated with hooking up to a public sewer system or constructing a traditional septic system. These cost savings not only apply during construction, but also during ongoing living as the monthly operating costs associated with sewer fees or septic pumping are avoided.
- Off-grid energy: Because of their compact size and offsite construction, tiny homes— when built properly—are excellent candidates for alternative energy. In addition to biogas, the small footprint and efficient living space of these structures are ideal for solar energy production and corresponding battery storage technology. And, similar to wastewater treatment, avoiding the public energy grid (and its associated monthly electric bill) affords tremendous cost savings.
- Setup costs: Because of their portability, tiny homes can be placed and set up more creatively than traditional homes. Where an engineered foundation must be utilized for a standard dwelling, a tiny home is afforded a great deal more leniency in terms of setup. Issues such as stormwater management, parking requirements, and street setback rules also don’t apply in the same manner to tiny homes.
- Use in alternative housing developments: The temporary, moveable nature of tiny homes also makes them ideal candidates for less conventional housing developments such as temporary farm housing[2] , worker housing, or homeless housing.

Tiny Home Development Rendering (Source: Pinterest)
The first step is a proof of concept
A dedicated proof-of-concept project that embraces the positive characteristics of tiny homes and, most importantly, illustrates the vertical integration from factory manufacture down to land setup and sale to homeowner, is an absolute necessity to seeing these units continue to grow in their adoption as affordable housing. Such a project also needs to be financially attractive to potential investors so that the model can be readily replicated without public support. This is entirely possible provided certain guidelines are met:
- Work within the existing housing regulations: As boring as it is, any development needs to be begin by understanding—and agreeing to play by — the rules. Given the disruptive, “move fast and break things” culture that’s embraced by virtually all technology startups, it is not surprising that the companies mentioned above have resolutely failed to do this. Careful planning to ensure that all stakeholders (i.e., planning officials, lenders, investors, neighbors, or construction professionals) understand the purpose and scope of the development will be critical to ensure a successful project. Additionally, taking care to establish proper guidelines with which the homes need to be constructed, delivered, and set up for permanent habitation needs to be part of the planning process. What seems to be very popular in the technology industry is the trope “better to beg forgiveness than ask permission,” but in fact the opposite is really true when it comes to residential construction. Planning and code enforcement officers universally hate last-minute changes to plans, especially when those changes seem to attempt to subvert approvals, and often the reaction to such attempts is put the brakes on an entire development. The disruptive element of tiny homes needs to take place in terms of how it can redefine housing with smaller footprints and more economical living, not by trying to short-circuit conventional codes.
- Focus on affordable living and sustainable communities, not what’s cool: Another challenge the tiny home industry faces is a lack of focus on what is important. We all may get caught up in the hype of the newest iPhone, but when it comes to the significant investment of home ownership, certain assurances must be met prior to trying to sell the cool factor. A clear focus on the affordability, reliability, and safety of these products will be a critical component of the marketing and sales strategy. A home purchase is the largest investment most Americans ever make, and these decisions can’t be made hastily or with clever sales strategies; home buyers must trust that what they are purchasing will provide a stable housing situation for years, not just today.[3]
- Design communities, not just homes: Trying to backfill an existing subdivision or mobile home park with tiny homes will not generate long-term successful results. To create a scalable growth trajectory, an intentional tiny home community needs to be conceived. It must encompass a proper layout to accommodate the individual homes, and careful attention must be paid to the community areas in order to make up for the limited physical space that these homes encompass. Dedicated outdoor gathering areas, community buildings, and site layout to encourage community interactions must be taken into account when attempting to design and tiny home community.
- Partner with professional real estate developers and other partners: A big part of planning is ensuring that competent real estate and construction professionals are involved in these early developments. Individuals who have experience with traditional housing developments will be essential both for identifying potential pitfalls and properly navigating the existing complex infrastructure inherent in any large-scale development. Unfortunately, for the reasons already identified in this publication, the nature of the home building industry will make it difficult to recruit individuals or entities into this new development style, but it’s likely that experienced and skilled individuals exist in the current industry who share a passion for affordable development and housing. Establishing one or more proof-of-concept projects in the tiny home development arena will hopefully serve as a call to action for these individuals.
[1] Homepage - HomeBiogas
[2] Please see my article on temporary farm housing for an in-depth analysis
[3] Why Buying a Home is the Biggest Financial Decision You'll Ever Make (harrynorman.com)