Could tiny houses help solve Australia's affordable housing crisis?

by Clarissa Sebag-Montefiore

It’s the long weekend. You get a few friends together, crack open some beers, watch a YouTube video. And build a house.

Yup. That’s all it takes to make one of the world’s first DIY flat-packed homes, according to Sydney-based architect Alexander Symes.

“First day, you assemble panels. Second day, install them. Third day, plug and play all the appliances,” says the Big World Homes founder. “You don’t need experts but you do need enthusiasm – if you’re someone who likes putting together Ikea, then that’s perfect.”

Pitched as one answer to the affordable housing crisis, the 13.75 square metre modular mobile home – made from structural-thermal-waterproof integrated panels and purchased online (it arrives flat-packed) – costs just $65,000. Like Lego, you can slot on modules to create a bigger house over the years. Crucially, the house is off the grid, with power sourced from solar panels and water from an in-built rainwater tank.

By removing labour expenses, the Australian company claims to cut up to 80% of the typical costs of constructing a similar stand-alone dwelling. Get it built and it’s ready to go with not a plug in sight.

Micro homes have become a trend in high-density cities such as Hong Kong, London and New York. But can they take off in Australia, a country which has an ongoing love affair with space and sprawling suburbs? Most importantly, could they be a solution to the affordable housing crisis as some proponents claim?

Australia’s homes are among the largest globally, averaging 231 square metres in 2015. Big size is matched with big prices. Median house prices in Sydney climbed 10% to a record $1,123,991 by the end of 2016. And this year, the city won the unwanted accolade of second most overpriced globally after Hong Kong, according to think tank Demographia (Melbourne is sixth).

Tiny houses have their advantages. Prefabrication means they are often cheaper to build (Auburn University in the US has created a “20K house”). Those on wheels are portable; others can be erected in a friend or family’s backyard. Another plus is sustainability: micro homes have fewer heating and cooling costs, plus the potential to squeeze into central plots mean residents can use public infrastructure more and cars less.

Yet Symes is the first to admit the tiny house movement “is only a small part of the solution. There is an ability to use surplus land and think about dwellings in a more compact nature”. He says at the moment the system is broken and diverse affordable housing options are key “because there’s no silver bullet”.

The issue is this: while an off-the-grid tiny home might work in rural Australia – where land is plentiful and cheap – it is in inner-city locations where they are most needed, but this is where land is at its priciest and is hard to come by.

As such, micro homes only solve the cost of the house itself. “It doesn’t address the land situation,” says Lara Noble, Brisbane-based co-founder of The Tiny House Company, who is writing a tiny house resource guide. “Construction of micro homes is very doable. The biggest hurdle is the fact that the planning rules are so inconsistent.”

“I’m all for tiny houses,” she adds. “We live in one and we built one. But it’s not like we can put all our hope on little boxes on wheel.”

Debra Rodrigues, chief executive of the not-for-profit Newcastle Urban Ecovillage, which addresses housing affordability and ecological living in urban centres, agrees land is the largest issue. A way to circumvent this, she says, is to rezone unused public grounds and then lease it out to tiny homeowners.

Big World Homes is already proposing a set of affordable “communities” located on unused land in urban centres for off-grid homes (the first location has yet to be confirmed). Viewed as “transitional” housing, the company sees residents living there for up to five years after which they can sell their home back to Big World Communities and, with the money they’ve saved, invest in a deposit elsewhere.

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Buying into alternative community dwellings, however, goes against ingrained social norms. The Great Australian Dream of owning land of one’s own prevails. Houses are still seen as a marker of security and success, major assets that increase in value over time.

Tiny houses, by contrast, are “viewed in the same light by banks as cars,” depreciating in value, points out Heather Shearer, research fellow at the Cities Research Institute at Griffith University. That makes financing problematic for those who don’t have a spare sixty grand in cash – those most in need of help.

Micro homes may attract couples or singles with enough extra income to eat, drink and entertain, at least partly, outside their own four walls. “But the underlying causes of the housing affordability problem are much deeper,” notes Shearer. That includes tax incentives such as negative gearing, high demand in the inner city, and lack of infrastructure and employment in outer urban fringes.

In May, Big World Homes will launch an expression of interest for its first ten tiny houses on the market. It’s worth noting that a weekend following a YouTube manual might be a DIY nut’s wet dream, but it certainly isn’t for everyone. “You need to find friends that can do more than put in a lightbulb,” concedes Symes.

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