Housing Trends in the New Downsized Economy: Small Is Beautiful

July 21, 2009

Tiny Houses Battle Rising Housing Costs

Thirty six years ago, E.F.Schumacher, a British economist, published a small book a titled: "Small Is Beautiful." In it Schumacher made the argument for ending the trend towards bigger and bigger everything. He was ahead of his time and his ideas about minimizing the material world we live in were treated as interesting and novel curiosities, but unrealistic.

The recent meltdown of the U.S. financial system, the virtual free fall of housing prices, the loss of employment for millions, and the crippling of the retirement portfolios of most Americans, has brought about a renewed interest in things small; from cars, to boats, to vacation cruises, and to houses.

After decades of steady increases in average house sizes, a precipitous drop in size has begun to catch the interest of the buyer of modest means: the so-called tiny house. For a couple, accustomed to living in a 2200 sq.ft. townhouse, adjusting to a new home with less than 90 sq. ft. can be a bit of a shock. But soon there may not be affordable alternatives.

The two tiny houses pictured above include a minimalist 65 sq. ft. house on the left, while the house on the right is more than a third larger at 89 sq. ft.

Prices shown do not include land.