Salt Lake City Turns to Tiny Homes for Homeless Relief

Could they be a solution to the high cost of housing?

By Dave Anderton

Once, entry-level homes constituted 40% of all new construction in the United States. Today, that figure has plummeted, with less than 7% of newly constructed homes classified as starter homes—those smaller than 1,400 square feet—according to a report by Freddie Mac.

Could tiny homes be the solution to the nation’s dearth of starter homes?

Don Adamson, Executive Director of HomeAid Utah, believes tiny homes could fill a critical gap by offering affordable housing. These dwellings provide all the comforts of home ownership at a fraction of the cost, he said.

“Our most significant challenge will be helping cities and neighborhoods recognize the value in zoning and allowing tiny home communities within their borders,” Adamson said. “If we want to retain our young and innovative workforce that distinguishes Utah, we must develop solutions like tiny homes. Otherwise, our children might be compelled to move to more affordable states.”

Tiny homes have considerable obstacles before their widespread adoption.

• Zoning and Building Regulations: Many cities have strict zoning laws and building codes that make it difficult to build tiny homes. Regulations related to minimum lot sizes, building standards, and permits can be a barrier to the construction of tiny homes.

• Financing: Traditional mortgage lenders often see tiny homes as a risky investment, and financing can be hard to secure. Tiny homes often do not qualify for traditional mortgages, so buyers must seek alternative financing or pay out of pocket.

• Public Perception and Social Acceptance: The perception of tiny homes and acceptance within communities can be an obstacle. Neighbors may oppose the construction of tiny homes in their community, fearing that it will affect property values or neighborhood character.

• Utility Connections: Ensuring that tiny homes have proper access to utilities like water, electricity, and sewage can be complex and costly.

• Economies of Scale: While tiny homes are less expensive than traditional homes, they do not always benefit from the economies of scale in the same way that large developments do. Mass production might alleviate this, but the customization often sought in tiny homes may hinder this process.

• Land Costs: The cost of land can often outweigh the savings on the construction of the tiny home itself, particularly in urban areas where land is at a premium.

Despite the significant challenges in developing lowercost housing, the consequences of inaction could be even more substantial. With the median price of a single-family home in Salt Lake County reaching $600,000 in June, as reported by UtahRealEstate.com, the search for more affordable housing is driving many to leave Utah. Although the influx of new residents to the state outnumbers those departing, a recent Census Bureau report revealed that nearly 79,000 Utah residents made the decision to leave the state in 2021.

At this year’s Salt Lake Parade of Homes, one dwelling stands out: a 312 square-foot tiny home by HomeAid Utah and Steel Biltt, fitting the definition of a starter home. Displayed earlier this month at the Realtor® Campus in Sandy, over 30 contractors and suppliers contributed materials and labor. The Salt Lake Board of Realtors® helped to provide financial support through participating brokerage interest-bearing escrow accounts. A similar home’s market value would be around $125,000 to $150,000, excluding land costs.

The home boasts special features, including a unique light gauge steel custom made for framing, 100% recyclable, and possessing qualities such as strength, fire resistance, and insect resistance. It also installs quickly; the walls arrived in sections and were framed in approximately four hours, with a complete build time of 31 calendar days. Adamson noted that the construction included interior and exterior insulation, taped seams, LED lighting, an electric tankless water heater, mini-split HVAC, and durable finishes to reduce operation and maintenance costs.

“Tiny homes come in a wide array of shapes, sizes, configurations, and construction types,” Adamson said. “Generally, they are an incredibly efficient use of far less space than traditional homes and appeal to a more minimalist lifestyle.”

The structure will soon be transported to The Other Side Village, a tiny-house development sponsored by Salt Lake City. Upon completion, The Other Side Village will feature 430 tiny homes for Salt Lake City’s chronically homeless population. In the first phase, consisting of 60 homes, HomeAid has committed to constructing 10-15 tiny homes.

Some companies, like the Wisconsin-based ESCAPE, are pioneering models of mass-produced tiny homes, as reported by various news outlets like Forbes. By standardizing designs and building off-site, these companies can reduce construction costs and build more efficiently.

“I believe there is strong interest in tiny homes,” Adamson affirmed. “And with many cities approving accessory dwelling units (ADUs) on existing home lots, I anticipate the emergence of tiny home communities replete with beautiful amenities and communal spaces.”

Dave Anderton is communications director of the Salt Lake Board of Realtors®.