By Ted McIntyre
Could the tiny homes market have a big future?
American essayist and philosopher Henry David Thoreau is credited with popularizing the tiny house concept in 1845. As documented in his famed work Walden, Thoreau took less than four months to fashion his 150-square-foot log abode from rugged land owned by his friend and fellow influential writer Ralph Waldo Emerson near Walden Pond in eastern Massachusetts.
Thoreau’s intent was “to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived.”
He called his compact quarters—which were devoid of running water or a toilet—home for more than two years. His nature-immersing philosophical journey, however, wasn’t exactly solitary confinement. Not only was his cabin less than two miles from his home in Concord, Mass., but it was just 20 miles from his mother’s home, where he was rumoured to occasionally visit and bring his laundry.
In a modern world where the search for the meaning of life seems more achievable than affordable housing, minimalistic living within easy reach of friends, family, work and modern conveniences may be set for a revival.
The Tiny Town Association, for one, is trying to grease the wheels. A registered not-for-profit, it hopes to expand the affordable housing options available across Canada through advocation, demonstration, standards development and design/build assistance. Serial entrepreneur Ed Peterson incorporated the association in 2017. “I had some construction experience and saw the benefits of tiny homes, but couldn’t find a design I liked, so started playing around with floor plans,” he says.
Peterson accepts that between prohibitive land costs and the push for increased density, tiny-home communities aren’t feasible in urban settings. However, given the provincial government’s call for 1.5 million homes by 2030, he feels this housing option should be considered just like any other. “All our stats show that 67% of those new Ontario residents are going to be singles and couples without children,” he says, crunching the numbers. “If you consider the percentage of the population living outside of urban centres, that means there’s a potential market for about 200,000 tiny homes to help address the housing need!”
Peterson has been working with industry partners, including Grimsby’s NRB Modular Solutions and Ottawa’s Collier’s Project Leaders, to formulate design plans and a detailed pathway to development. His association provided input for the provincial government’s Build or Buy a Tiny Home publication, has presented at several industry conferences and trade shows, and has closely followed the groundbreaking 12 Neighbours project in Fredericton, NB, since its launch two years ago. A community founded by local software entrepreneur-turned-philanthropist Marcel LeBrun, the development offers subsidized rental housing to help unhoused people find stability. The number of its vibrant crayon-hued homes has grown to around 100.
“We toured the 12 Neighbours community and their nearby manufacturing facilities last summer,” Peterson says. “It’s one of the best in Canada in terms of showcasing that type of community model.”
Groundbreaking 12 Neighbours project in Fredericton.
Peterson is currently focused on two project proposals of his own: one a municipal partnership in Elliot Lake, and the other a private development in Odessa. “I purchased a 27-acre property in Odessa and sent a proposal to Loyalist Township about developing it into a tiny home community,” he says. “It’s a challenging project because there’s only hydro on the property. But we’ve found technologies that can manage waste and water better than those currently employed by any municipality in Canada—certainly better than septic systems. Another obstacle is that provincial planning policy says (multi-unit) developments should happen in urban centres, but my property is zoned rural residential. There’s only one house on 27 acres right now, 25 of which are covered in weeds. The initial response from the planning department was that they couldn’t support the project, given everything in the way, which was discouraging. But since then, I’ve had several people reach out and say, ‘Hey, I own some land and would like to build a tiny home community on it.’ I share everything I can.
“We’re encouraging municipalities to adopt what they did at 12 Neighbours,” Peterson adds. “They zoned the property as Comprehensive Development District (CDD). In that way, you don’t have to spell out everything in the zoning, but there’s an attached development agreement outlining everything—building size, road access, service access, etc. This way you can amend things, working with the planning department without having to get local council involved in each little change. It’s what we’re hoping to do in Elliot Lake, where we’re shooting for 82 to 100 homes.”
Overcoming Stigmas
Peterson notes that an educational process is required to move forward with such developments—even for planning departments. “People used to tell me, ‘These homes are not permitted—they’re too small.’ But the OBC notes that a tiny home with an open-concept design can be as small as 17.5 square metres (188 sq. ft.).” Beyond the required minimal dimensions and municipal servicing and being OBC-compliant, the only prerequisites for ‘tiny home’ designation are that it be a private and self-contained dwelling unit intended for year-round use that includes living and dining areas, a kitchen, bathroom facilities and a sleeping area.
There’s also a stigma to address, says Peterson, who cites TV coverage of tiny homes on wheels in trailer parks and their use as ramshackle temporary homeless shelters. “So that’s the first thing we need to overcome—what the community is actually going to look like and who’s going to live there.”
In the meantime, Peterson is seeking building partners. “We’re looking at manufacturing tiny homes in a plant, transporting them to a site and then installing them on a foundation system, be that on concrete or piers,” he says. “We figure the cost will be about $265,000 for a 12’ x 32’ 384 sq. ft. home on a fully serviced property. But we think we can offer it for less than cost since we’re looking at accessing a lot of government grants. We’re shooting for a price that would be affordable for a couple making minimum wage.”
From a parking standpoint, a centralized lot is one option, but Peterson’s model includes shuttle service to public transit within the host city.
“We will offer affordable rentals, rent-to-own and affordable-to-own housing, providing a path for those looking to build equity,” says Peterson, whose housing model includes a cooperative comprised of homeowners within the community to manage the property on land leased from the land trust. “This development model is simple for a municipality to integrate, as there is one address, tax bill and utility account for each connected service. We ask the municipality to provide a staff point of contact, a land zone for the development, municipal services to the property and all soft costs, including required studies, development, application and permit fees. We will arrange funding, manage construction and establish stewardship of the community.”
Eko-Friendly
One company thriving in the space is Ottawa’s ekoBuilt. Operating under the umbrella of Kealey Tackaberry Log Homes, ekoBuilt’s approach to affordability is two-fold—reducing energy costs being step one. “That means Passive House—the world’s leading low-energy standard,” advises ekoBuilt partner Paul Kealey. “There’s a 5-10% premium to building to that standard versus a code-built house, but the energy savings will more than offset those mortgage payments. More of the electric bill is actually attributed to appliances than to heating and cooling these homes!”
To maximize affordability and efficiency, ekoBuilt’s minimalistic design approach removes unusable or minimally used spaces, simplifies rooflines with low slopes, eliminates hallways and walk-in closets where possible, and combines powder rooms into a secondary washroom with a separate toilet and shower compartment.
Ekobuilt’s Pinewood Paradise model.
“The combination of these components results in the world’s most affordable home to live in,” Kealey says. “And since it’s built to be resilient and to withstand changing weather patterns and the general climate problem, it’s a home that will last a very, very long time.”
Ontario’s Secondary Dwelling Unit provision, which allows for a detached secondary home on a property so long as it’s a maximum of 40% the size of the primary dwelling, has spurred business, says Kealey, whose clients have primarily used them for long-term rental or short-term Airbnb stays. “We also have a lot of ongoing projects related to granny suites—secondary homes built for either a mother-in-law or elderly parents instead of them moving into a retirement complex.”
Still, three-quarters of ekoBuilt’s business is tiny home kits shipped outside the Ottawa area to the U.S. and Canada, although Kealey expects more popularity within Canadian borders as building codes get tighter. “We used to do open houses twice a year, but we’ve been getting more requests for showings and are now doing open houses every two months. And the place is filled every weekend that we’re open. However, a big part of the challenge for people is finding an affordable piece of land. Since Covid, property value has increased 300%-400% in most areas around Ottawa.
“To compensate for that, we’re starting to do company-built projects that we’ve never done before,” Kealey says. “We’re very close to breaking ground on a 65-unit multifamily project and a five- or six-unit townhome project in Perth, providing affordable options where they are not necessarily abundant today.
“The cost of a house from the owner-builder perspective could be as little as $200,000 for a 400 sq. ft. model, with excavation to completion taking as little as five months,” Kealey says. “A 650 sq. ft. two-bedroom unit would be close to a $300,000 investment. And moving up to 900-1,000 sq. ft. would be closer to $400,000. “But adding a basement is an effective way to double the square footage without much additional cost.”
Kealey concedes that smaller homes have lower profit margins, but resistance to change is also keeping more builders from entering the market. “Since the typical home builder builds to basic code, operational costs of a building aren’t the biggest factor. So until it becomes more obvious that customers are demanding smaller, more affordable homes, these options aren’t going to be available.”
But the business model is working just fine for ekoBuilt. “We talk a lot about the health and comfort of the home. I guess we’re more purpose-driven than profit-driven,” Kealey says. “But we would not be offering a Passive home, which is ultimately more expensive to build unless it made good business sense and was of interest to the masses.”
New Amherst Reaches New Heights
New Amherst Homes is among the OHBA members actively expanding their product lines to address the housing crisis. “While we’re a well-established builder of semi-custom and custom homes, we recognize the demand for alternate housing types to fit diverse living needs,” says the company’s V.P. of Sales, Elissa Mountney.
The vision of current owner Max LeMarchant, the 13-year-old company began building laneway homes in 2018 to take advantage of Cobourg’s push for more density. In 2020, it added a 192 sq. ft. mobile home (The Bento, designed by acclaimed Miami-based architect Andrés Duany of DPZ CoDesign) to test the market for those looking to significantly downsize while having the ability to relocate their investment.
The portfolio increased earlier this year with another Duany design, The Log—a blockish two-storey, 500 sq. ft. ADU (Accessory Dwelling Unit) manufactured by Bracebridge’s True North Log Homes. “We wanted a modular ADU that could logistically fit in a backyard with tight side-yard space,” explains Mountney, whose company also offers a 660 sq. ft. laneway ADU design over a two-car garage.
“Smaller, more affordable living spaces are in demand, and we see that demand increasing, given the high cost of living,” Mountney says. “Young adults are finding it hard to get into the housing market. The aging population wants to age in place, and boomers do not want to see their parents in retirement or long-term-care homes, particularly after the Covid-19 pandemic. These tiny homes/ADUs provide the opportunity to optimize properties that permit these types of homes. They also provide the chance for homeowners to leverage the equity in their home and build an income property to supplement the high cost of living, to create dedicated work/office space separate from their home without the commute, to be used as a ready-made ‘cottage’ at a lake property or seasonal resort park setting, or as a more permanent setting by blocking and skirting the wheels.”
While New Amherst has only built these tiny home solutions in Cobourg to date, there’s interest aplenty south of the border, where they’re launching a new modular and panelized housing business under the name of 21st Century Home. To whet the appetite of potential U.S. customers, the company exhibited The Bento and The Log ADU as part of the U.S. Department of Housing & Urban Development (HUD) Innovation Showcase in June. HUD reported that 21st Century Home’s exhibits “were the most visited during this year’s showcase and, perhaps, the most visited exhibit HUD has ever had.”
In Search of Affordability
Doug Tarry is another who feels the time has come to explore the tiny-home solution. “We have two tiny home projects on the books,” says the owner of Doug Tarry Homes. “One is Tiny Hope, an affordable housing rental project we’re building for the YWCA on a reclaimed brownfield in St. Thomas. There will be roughly 40 tiny homes—singles, semi-detached and townhomes ranging in size from 440 sq. ft. bungalows up to 800 sq ft. three-bedroom, two-storey homes. We’ve been working on it for years and are really excited about it.
“The other project, a pocket community, is a for-profit, entry-level product. It’s a way of getting people into something that they can afford. It’s good for older people who are maybe looking at downsizing, don’t want a lot and don’t want to be house-poor. I have friends who love it because they want to be able to travel more and don’t want to have a huge mortgage anymore. But it’s predominantly for someone like a young couple who just can’t afford to put together the money for the down payment on a $1 million mortgage but who can get into something at $300,000, a price point that’s just not available anymore—even in my local market. This is for people who don’t want to live in an apartment building setting and can’t afford to enter the regular housing market. It’s a niche community—you won’t see them all over the place. But depending on the piece of land, the community and the cost of the land, it’s a great option. And you can get quite a bit of density with these tiny homes.”
Tarry’s initial designs do not include basements—“It’s just not a choice we’re making at this time,” he says. But expect his typical lofty construction standards. “We’re still building these to net-zero specs. The intent is not to diminish the quality of the product.”
So what is keeping other builders from swimming into these same waters? “Maybe they haven’t had to adapt yet?” Tarry questions. “Or maybe they’re just not as nuts as I am. We’ve researched where the market is going and are trying to provide as many opportunities as we can. I believe that housing is a universal human right and that we’ve got to find a way to try to house people. And here’s an opportunity to bring a different housing type to market that people can afford to buy but that at the same time will be profitable for us.”
The biggest challenge? “Helping municipalities wrap their heads around these types of projects,” Tarry admits. “That’s why we originally envisioned it as rental, because we weren’t sure of the municipality’s reaction. But, in our case, they have fallen in love with the concept. The challenge from a code perspective is working through all the different requirements for room sizes to get them to work in a small footprint.”
The good news for other Ontario builders is that Tarry is ‘white-papering’ the YWCA project. “We’re going to produce a report that says, ‘Here’s what it looks like. Once we build it and have proof of concept, we will share that with governments, institutions and the industry. It’s just that important.”
How does Tarry respond to builders stuck in neutral in the current market, lamenting, ‘Geez, the houses I’ve been building for 30 years don’t sell anymore—what should I do?’
“I don’t know—maybe think outside the box?” he suggests. Or maybe think inside a smaller box. It worked for Thoreau!
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