What comes to your mind when you think of a tiny home? Their names are quite self explanatory, and the popularity has skyrocketed in the last decade or so, sparking a ‘tiny-home movement’ across North America. So how did this whole concept of a tiny home come to fruition, and what exactly constitutes a tiny home and separates it from other types of dwellings?
The typical size of a tiny home ranges from 100-400 sq ft. Compact and easy to build, they can be put on any type of land. Tiny homes are cost effective solutions that have gained popularity in the past two decades, partly due to the 2007-2008 financial crisis, although it didn’t directly affect Canada. Their smaller size also creates a shorter construction output time, making the process more efficient. Many people who are looking for a more environmentally conscious dwelling are also attracted to tiny homes.
Currently, the majority of tiny homes are used for personal residential purposes and serve as main dwellings. But many people do get creative with tiny homes, as it does provide extra space at a lower cost. A tiny home can be used as office space, a vacation/weekend home, a homeschooling space, a studio for work hustles, and more. The possibilities for a tiny home are practically endless. Unfortunately, tiny homes often face stigma and do hold some structural societal barriers. Mobile homes, which are very similar to tiny homes, even face a greater stigma as they are seen as housing for people who are ‘impoverished’ and are often a necessity for those who live in them. Tiny homes, however, are often perceived as more polished and sophisticated compared to mobile homes, largely because they are commonly associated with middle-class lifestyles and intentional downsizing rather than from necessity. Here at LandSeed, our goal is to demystify tiny homes and make it more accessible for more people, and this blog post will serve as our first introduction of our goals and plans for tiny homes.
The Finances of Tiny Homes
The costs of a tiny home varies widely. First, it has to be considered if an ample amount of land is available to build the tiny home on. Without land considerations, a tiny home can cost from $80,000 to upwards of over $200,000, depending on choices like materials, amenities, and custom features. You can also build a tiny home yourself if you have the resources or you can buy it preowned. The final price tag will come down to the types of finishes and materials you choose to build your tiny home. The wide variety of tiny homes can affect their finances and since conventional mortgages usually do not cover tiny homes, many people have to get creative with finances.
An exciting way to fund your tiny home through a federal initiative is the Secondary Suite Loan Program, launched in April 2024. Originally capped at $40,000, an $80,000 loan is available for homeowners to convert and create rental units on their properties, from basement suites to an aforementioned tiny home. At a 2% interest rate over 15 years, it is a great option for homeowners planning smaller renovation projects to create secondary suites. This initiative is just the beginning for federal funds allocated towards different dwellings as the market continues to grow.
Another way to finance a tiny home is through private industry means. The Royal Bank of Canada (RBC) recently also introduced their enhanced residential construction mortgage program that now enables homeowners to finance the addition of laneway homes, garden suites, modular units, and similar types of dwelling units. There are also many different financing companies that provide loans to build a tiny home, as well as tiny home construction companies providing financing built in with the purchase. Our partnership with Humble Creek features financing through the company, making the process easier and simpler.
Other ways that one could finance a tiny home include RV loans, chattel mortgage (used for moveable properties), a personal loan or a line of credit, a construction loan (specifically designed for funding construction projects), personal savings, specific tiny home financing, and more.
Whatever your preferred method is, tiny homes are a great investment as Canada begins to relax zoning laws. With many flexible financing options available, owning your dream tiny home is more achievable than ever. Investing in a tiny home not only offers a lower upfront cost compared to traditional housing but also represents a sustainable and innovative way to address housing affordability challenges.
Tiny Homes: a sustainable option?
Most tiny homes come personalized and allow for buyers to choose the materials, finish, and appliances, with endless possibilities and combinations. The unbridled amount of customization that comes with a tiny home permits it to be sustainable in a way that a normal dwelling would not be able to. So what exactly makes a tiny home more sustainable?
The environmental savings start with the construction of a tiny home. The size of a tiny home makes it more sustainable than a regular dwelling due to the fact that it uses less materials. Transportation is also a major factor in releasing emissions, and with less supplies, there will be less need to move them, which means fewer trucks on the road and fewer harmful emissions. The design and layout of a tiny home can also lead to smaller environmental impact. With proper construction, over time energy costs can be considerably reduced by implementing passive design elements like airtight construction and efficient insulation.
The materials used for a tiny home also play a significant part in it being more sustainable. There are many options for sustainable materials for a tiny home, but some common choices include reclaimed wood, structural insulated panels (SIPs), and recycled materials. Alternative sources of energy to reduce energy consumption are also important in making a tiny home sustainable, such as solar panels and wind power. Additionally, energy efficient appliances can further minimize environmental impact and lower energy usage. High-efficiency appliances, including Energy Star-rated refrigerators, tankless water heaters, and LED lighting, create energy savings while maintaining functionality. Eco-friendly flooring options also contribute to a home's green footprint. With the thousands and thousands of options available for tiny home construction and build, thoughtful design and conscious choices ensure that they remain both eco-friendly and functional for years to come.
Connecting the housing crisis and tiny homes as a solution
As housing prices continue to climb and climb to unfathomable heights, many people are looking for smaller dwellings to coincide with smaller house prices. And although tiny homes aren’t suitable for everyone’s lifestyles, for those who do look for smaller space, it can be a viable option for the housing crisis.
The main challenge of buying a home isn’t the cost of the house itself; it’s the cost and availability of land. This requires a renowned focus on densification, as many parts of Canada have been built up on single-family zoning. Due to the pricey cost of land, many researchers argue that we must move towards a combination of lightweight housing, smaller homes and converted existing homes. This includes a myriad of options, where tiny homes are included.
North Grenville in Ontario recently secured funding through the federal Housing Accelerator Fund for communities to help support people in the region that are interested in additional residential units (ARUS). Due to the unprecedented number of people moving to rural regions during the pandemic, the pressure on the housing market in the municipality has increased. Taking advantage of a zoning by-law that allows up to two ARUS on a property, the municipality has started to look towards and promote tiny homes as a solution and option. This is just one example of how tiny homes are emerging as a practical solution to the housing crisis, gaining popularity alongside other innovative housing options.
What LandSeed is doing: TeraSeed
Here at LandSeed, we actively take part in helping solve the housing crisis by creating partnerships, and funding attainable housing initiatives and community projects. One such solution is our partnership with Humble Creek Tiny Homes, TeraSeed. This partnership offers businesses a new and innovative way to invest in accommodations that benefits both communities and businesses. We offer energy-efficient, modular tiny homes that are catered towards each business' needs. With our main audience for this collaboration being businesses, we contribute funds obtained from each tiny home purchase towards promoting homeownership in our communities and sustainability in the tourism accommodation sphere.
Conclusion
Tiny homes popularity has been increasing tenfold in the past couple of years. Their main use has been for residential purposes, but tiny homes can also be used for other things. Accommodations, office spaces, a home for a startup; the possibilities for a tiny home is practically endless. Being economical, eco-friendly, and space-conscious, they can be a catalyst for change in our country. But one thing to remember is that tiny homes aren't just a space; it’s a lifestyle. And not every lifestyle suits every person. What’s important to remember is that the housing crisis is not a one size fits all solution, and there can be many components to help alleviate it. Tiny homes can be a part of that solution, contributing to increased densification and lower housing costs. And although challenges; such as zoning laws, community acceptance, and construction costs remain; as time goes on these obstacles can be addressed through policy reforms and public education, paving the way for tiny homes to become a more viable and widely accepted housing solution.We need to look towards adapting tiny homes to our future and seeing it a part of our housing vision; holding space for different housing alternatives and changing the way we view residential spaces that aren’t your typical single family home. And LandSeed takes pride in being a part of that vision. TeraSeed’s initiative is only just beginning.
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