Councils are opening the door to tiny houses as a quick, affordable and green solution

Soaring rents and home prices, increasing mortgage stress, record immigration and a growing population are fuelling a housing crisis and increasing homelessness. In the face of this pressing need, tiny houses offer an alternative housing option.

Tiny houses have become popular in the United States. Their popularity is growing in other developed countries such as the UK and Canada. In Australia, however, planning and housing regulations present many barriers to using tiny houses as permanent homes.

Dire statistics highlight the need to find homes for Australians quickly and cheaply. The unmet need for social housing has been estimated at 437,000 households. The 2021 census counted 122,494 people as homeless. By 2022, more than 640,000 households’ housing needs were not being met.

Some local councils now see tiny houses as part of the solution to these problems. They are taking steps to make it easier for people to live in them.

Read more: Tiny and alternate houses can help ease Australia's rental affordability crisis

Australia is trailing a global movement

The tiny house movement is built on several values. These include a preference for smaller homes, the pursuit of minimalism, the desire to live more sustainably and a rejection of the prevailing consumer culture.

The 2018 International Housing Code defines tiny houses as dwellings of 400 square feet (37 square metres) in area or less. In Australia, dwellings under 50 square metres are commonly regarded as tiny houses.

The two main types are tiny houses on foundations and tiny houses on wheels. The latter is built on a trailer and must comply with road-legal dimensions and vehicle regulations.

Tiny houses have long been used as dwellings overseas. Faced with high property prices and land scarcity, those who enjoy the convenience of city life with a minimalist lifestyle have embraced tiny homes.

Examples include micro-homes in Tokyo. Japanese micro-homes are often sited on irregular leftover pieces of land.

In the US, the Occupy Madison Village is a tiny house commune in Madison, Wisconsin. It provides housing, communal living and community-based decision-making for homeless people to promote their sense of belonging and social participation.

Read more: 3 innovations helping the homeless in Eugene, Oregon

What’s happening in Australia?

In Australia, the various barriers to tiny house living include local government planning schemes, time limits and other restrictions on occupancy and connection to utilities. Over the past year, local councils have begun to make it easier to live in a tiny house.

The Shire of Esperance in Western Australia was the first local council in the country to recognise tiny houses as permanent dwellings in December 2022.

Mount Alexander Shire Council in Victoria removed the permit requirement for residents to park tiny houses on wheels on properties with existing dwellings in June 2023.

The Shire of Capel in Western Australia adopted a tiny house policy to allow ancillary dwellings and tiny house communities in August 2023.

The Surf Coast Shire in Victoria is starting a two-year trial of domestic use of tiny houses on wheels in 2024.

These changes are likely to help people who are struggling to find an affordable home and those on long waiting lists for social housing.

Read more: Tiny houses and alternative homes are gaining councils' approval as they wrestle with the housing crisis

A cheaper and faster way to house people

Tiny houses offer a cost-effective and prompt solution to the issues of affordable housing and homelessness. Their small size means they can be built more quickly and cheaply.

The construction cost of a tiny house is typically A$80,000-$160,000. The median house price for Australian capital cities is now more than $900,000 – and around $650,000 for units.

On average, it takes four to 12 months to build a house in Australia after the purchase of land and design approval. It takes only about four weeks to build a tiny house commercially.

The average new house size in Australia is the biggest in the world. Average floor area has been between 230 and 246 square metres for the past 20 years. Large houses use more materials and energy to build and run, adding to living costs.

Shrinking our environmental footprints

Tiny houses promote liveable space downsizing and simpler lifestyles. They also demonstrate a stronger responsibility for environmental stewardship. Some have rainwater tanks, composting toilets, solar panels and batteries and can operate completely off-grid.

Because tiny houses use fewer resources, their occupants’ environmental footprint is smaller. They represent a shift towards more sustainable living by prioritising lower energy use (heating, cooling and lighting) and greenhouse gas emissions. These signify a commitment to limit climate change and global warming by moving towards Australia’s net-zero carbon emission target by 2050.

Read more: When people downsize to tiny houses, they adopt more environmentally friendly lifestyles

The global tiny house movement represents a concerted effort to reduce the huge environmental footprint of the building and construction industry. At the same time, high-performing, energy-efficient tiny houses cut occupants’ living costs.

Tiny houses do not cater for all households. They suit certain demographics, especially single and partnered people with no children or retirees.

Tiny houses can add much-needed diversity to Australians’ housing options. As councils are recognising, they’re a way of quickly expanding the affordable housing supply in a community. Lower running costs and a smaller environmental footprint are added bonuses.