Most people probably realize there are certain rules about how houses have to be built, including rules involving basic safety and hygiene, but a lot fewer may realize that most municipalities have rules about the size of a home that can be built. This may mean a limit on how many stories tall a structure can be, or how much of the lot it can take up, or, in other cases, just how small a house can be and still be treated like a house.
The relative smallness of a house has long been an issue for cities, with serious lawsuits challenging similar rules going back to the 1940s and 1950s. Where these rules have held, the minimum square footage per lot within cities has hovered around 1,000 square feet, though suburban subdivisions with homeowner associations (HOAs) or architectural committees may require a much more significant minimum square footage.
Understandably, these and other rules have created a serious problem for people interested in building tiny houses within most municipalities, even if the home is otherwise up to modern building codes. But, of course, not all tiny houses are, which complicates things even further. Since many are designed to be constructed on wheeled platforms, rather than traditional poured concrete foundations, they’ve really needed their own rules to give these compact and affordable homes a chance.
The problem with tiny homes
Tiny Homes fill a niche for people who are happy to live a minimalist lifestyle, in a home they can readily afford. They don’t want to pay for spare rooms they’re not using and storage space that’s not storing anything. And can you blame them, especially with real estate prices these days? Not only are tiny homes filling these needs, they’re helping take the pressure off a limited number of professional builders who are needed for more technically complicated structures that are also in mad demand.
The problem, though, is tiny homes don’t really fall under any particular category of housing. They’re not manufactured homes, since they’re often site-built or built on a trailer that’s meant to transport them to a permanent site. They’re not recreational vehicles, since they don’t move under their own power. They’re not considered a regular house because they fall far below most minimum requirements for things like square footage (and often ceiling height is an issue, as well). Tiny homes exist in a structural limbo, making them difficult to officially approve, no matter how well done.
Maine helps forge a path forward for tiny houses
In July 2021, a much anticipated bill, LD 1530, was signed into law by Governor Janet Mills of Maine. This law not only sets a solid definition for the term "tiny house," it aims to give them the same status as other single-family dwellings. The law is effective statewide in Maine, allowing a tiny home that meets the law’s definition to be constructed or placed on any single-family lot that isn’t subject to other restrictive covenants, like those in HOA-controlled subdivisions.
The only catch: Tiny homes in Maine that want to be treated as single-family homes will have to meet the same standards of other single-family homes. The one exception is that they can be built on a wheeled and towable platform.
This is a big deal for tiny-home enthusiasts, who have been quickly gaining momentum since a big win in late 2019 in Los Angeles, which allowed movable tiny homes to be placed within the city. LA has struggled with an affordable housing crisis for some time, so allowing tiny homes was a logical move, really. Maine has less of the same issue, but because Maine residents have had such an interest in tiny homes, it still made sense to have a statewide response to these structures.
The Millionacres bottom line
For investors in the state of Maine, this new law could be a boon. You’ll likely find it easier to build and place tiny homes, for sale or for rent, depending on your business model. They’ll still be subject to the local laws when it comes to things like short-term rentals, however, so be aware of that. They may also be allowed as accessory dwelling units, which could make your single-family properties worth that much more. Very win-win.
On the flip side, expect some growing pains as the standards and practices surrounding tiny homes continue to kind of work themselves out a bit. You still may have a few fights on your hands when it comes to P&Z, but you’re more likely to have a leg to stand on.
For investors in other places in the United States, this state-level legislation could be the beginning of much easier times for tiny homes. Whether you’re looking to build them or rent them, you probably already know what kind of chaos current laws are for these units. Even though a New York City apartment is often smaller than a tiny home, many municipalities continue to try to cite safety and hygiene hazards to prevent their placement in single-family residential areas.
I honestly didn’t think the tiny-home craze would stick, but clearly I was wrong about that, and it’s only growing. They represent a sort of hope for a generation that has gotten the raw end of the deal when it comes to being able to buy affordable real estate and set down real roots. They make a great, quick-to-construct ADU for bringing in more income from one property. They’re even fantastic as stand-alone short-term rentals.
The future of tiny homes could be massive, especially given the current and ongoing supply issues in the wider real estate market. Having legislation in place that allows them to be classified as proper houses is the first step, but it’s a huge step.