Awaking thread here. This question is something I debated in my head.
At first I was inspired and liked the idea of tiny houses. Then I saw this thread and was let down and felt bad about even contemplating the idea. But then I saw an episode on NJ TV about how there's a severe housing shortage in our state (true) and especially the wrong kind of housing.
https://www.youtube.com/watch?v=NnZkLa6OPBchttps://www.youtube.com/watch?v=dcc7XqK6M7shttps://www.youtube.com/watch?v=bPx4bdMp8GUI get to talk to a lot of young people and I usually ask about their living situation. For many young people working say retail, and even higher income young graduates, many are still living with their parents. They only move out when they are married, or sharing a house with 3-4 other people, essentially, more and more single-family homes are de-facto dorm buildings. And this isn't exactly poor young people but middle, average income young and retirees, as seniors need single dwellings if their spouse/partner dies. I make okay money, but I want to save aggressively, so house-sharing is the only affordable solution, and I'm not the only one. In many neighborhoods of NNJ/CNJ, $100K/household isn't really much but average. An agent I know can attest to this trend. Higher property taxes necessitate more sources of income for homeowners who can no longer afford their own homes. It's not for real estate investment; more "middle-class" homeowners who have owned for years can no longer afford "middle-class" property taxes, so they are renting rooms in their house.
Tiny houses can also be perceived as a threat. No mortgage, no banks. No agents, inspectors, contractors, developers. Many people in those fields would have less work if
everybody sought this type of housing.
The people interested in keeping housing prices high and tiny or affordable homes away are homeowners themselves. All homeowners want prices to remain high, including Mustachians who count their residence as a big chunk of their FIRE plans. Municipalities restrict or do away w/affordable housing because tax revenue wouldn't be as good and voters + local governments (mainly homeowners) want prices to stay high. Tiny/affordable housing can be seen as a perceived threat to safety and appearance of their neighborhoods. So zoning and laws do what they can to protect the homeowner class.
People generally react strongly when someone does something radically different. Mustachians already provoke strong reactions from others, so it was a bit strange to see people enthusiastic about tiny homes or other forms of affordable living provoke strong reactions of dismissal here, where people are more unorthodox and reject many social norms. Tiny houses seems very Mustachian to me. If less people are having families and are single, who's going to buy my house? How many could actually afford to buy it?
This is probably why in NJ, more townhomes, condos, apartments are built, to partially meet this demand, but it hasn't been enough. Any new SFH are built by knocking down small, decrepit, abandoned homes and replacing it with a McMansion. The path of owning a residence is a step ladder but more steps are now being added in between other steps due to changing times and some people don't like that.
Tiny homes aren't meant for permanent housing but to help transition. Motivations vary from financial, environmental or a backlash against traditional McMansions. The housing crisis also made an impression on me back in HS, that housing isn't a very good place to put all your eggs and I think more youth from '08 feel this way. People relocate more, switch jobs, divorce, not have kids, single, delay marriage, paying back student loans, so permanent SFH isn't as attractive or immediate.
Honestly I don't think homeowners need to worry. There will always be demand. But space, zoning, and regulations need to be worked out for smaller dwellings. That's if developers are interested in projects not as profitable. Left w/few options, it's no surprise the tiny house phenomenon is gaining traction seeing as their housing needs aren't met, they DIY. Especially if there are millions of views and more and more purchasing this type of house. I don't see this as a fad but more a gradual shift in how housing will look like and at the least, put pressure for different types of housing to be built that are geared towards singles, childless couples, seniors and affordable. Tiny houses are just an extension of the prefab, modular homes, micro-apartments, hobbit holes, Kasita's, tree houses, zerohome etc. What type of housing will manifest from the variety of new housing types though?
I can only speak for NJ though.