Parking a Tiny Home

Secondary dwelling unit laws: the good, the bad, and the ugly

Tiny homes as secondary dwellings were supposed to help with the housing crisis by providing lots of new affordable housing options. Right? It was all part of a well-intentioned plan. 

However, secondary dwelling unit by-laws were not warmly received by the tiny home community. And with good reason – people who actually know about living tiny and people who are taking steps towards it (i.e. the tiny home community) can see the holes in the plan. Holes all over!

These are some of the good, the bad, and the ugly effects of secondary dwelling units. They are definitely a step in the right direction and, with a few minor tweaks and nudges, could be turned into something really amazing. 

But first, what are secondary dwelling units?

Secondary dwelling units are a complete additional home that is added to an existing property with an existing home. They have everything that a home needs, such as a kitchen and bathroom, and can serve as a home independent of the main house on the property. Usually they are smaller than the main house. Tiny homes fit this description very well. 

Photo: Rockbox Structures

Secondary dwelling units go by many different names in different zoning by-laws. Additional dwelling units, accessory dwelling units, coach houses, laneway suites, garden suites. What they all have in common is they are homes constructed in an established zone to add density and housing in between existing structures. 

The good: benefits of secondary dwelling units

Secondary dwelling units do come with many of the benefits that they were designed to bring to communities:

More housing. Period. There is not enough housing available in many places around Canada. This is driving up the prices and leaving many people in desperation. More housing is good. 

Land use efficiency. If more housing is needed, our choices are to create new developments out of the city or infill inside the city. Creating new developments increases urban sprawl and forces us to take yet another big juicy bite out of surrounding nature and established farmland. It also forces people to live further away from everything they need in the city, drive more, commute more. Additional services are needed out there with additional shopping areas, additional deliveries, additional traffic. It’s a domino effect that doesn’t stop.

Creating new developments forces us to take yet another big juicy bite out of surrounding nature and established farmland.

Urban density. Once you start introducing more housing into existing neighbourhoods, you increase urban density (more population per area unit). Dense cities are more crowded, but being closer together has many upsides. Suddenly, you have enough people in your own neighbourhood who want to be in your touch football league or running club. Small businesses start in areas where there is enough population to sustain them (that’s why all the coolest businesses are usually downtown). Cities become more walkable. It’s the opposite of lonely, quiet, grim urban sprawl. 

Urban density is the opposite of lonely, quiet, grim urban sprawl. 

More diversity. One of the great things about introducing such a different type of housing in established neighbourhoods is that it will mix us up a little bit more. People of different generations, backgrounds, income levels, family situations would be living side by side instead of segregated into their own neighbourhoods. There is no better way to get to know each other and benefit from the exchange. 

People of different generations, backgrounds, income levels, family situations would be living side by side instead of segregated into their own neighbourhoods.

More tax revenue. Great bonus for the municipality – creating more dwellings in established neighbourhoods brings more tax revenue that can be used for doing even more cool things in that neighbourhood.

The bad: focusing on rentals alone is not really helping.

Secondary dwelling units can only be owned by people who don’t need them (because they have a house already).

Simply put, secondary dwellings can only be built by people who already own property with a house on it. Even more simply put, these tiny homes can only be owned by people who don’t need them (because they have a house already). All of the “bad” stems from this fact:

Rentals alone are not going to help people step up. In the current real estate market, many people who are currently renting are not able to put any money aside. That means, if home ownership is the goal, that goal keeps slipping further and further out of reach. One of the biggest ways for North Americans to ensure financial security is by accumulating equity in real estate. It’s not the same everywhere in the world, but here we are. By adding only rental opportunities, municipalities are not helping people with getting to home ownership. And taking away a lot of their chances to accumulate enough wealth to support a family, retire, you name it.

Rentals take away a lot of the value of tiny home living. One of the main reasons people choose to live tiny is financial independence. The ability to live mortgage-free and rent-free sooner if not right away. The freedom to invest more in their family or business rather than scrambling to make ends meet. Take that away and all you have left is a really really small apartment.

One of the main reasons people choose to live tiny is financial independence.

Cute factor comes from a sense of ownership. Tiny homes are incredibly cute, but they are only cute because people have a strong sense of ownership in them and a strong commitment to the lifestyle. Maintaining the cute is a lot of work and self-discipline. Living your values every day and knowing that giving up the living space of a conventional home brought you other benefits is a strong motivator, much stronger if you have ownership in your home. 

The ugly: exasperating inequalities in the housing market

The ugly side of the secondary dwelling unit has to do with the inequality that exists between people with homes and people who can’t afford homes. With the real estate market the way it is, this can be just a matter of a couple of years. People who bought a house in 2019 are financially-speaking well ahead of people who want to buy one now. And we are not even talking about people who bought in 1995. 

The ugly side of placing the affordable housing crisis in the hands of “investors” who are looking to make a return on their investment is that it might not go according to plan.

Power disbalance. Rather than empowering people who are priced out of the market (which now includes MOST people in many areas), secondary dwelling unit by-laws put all the power in the hands of existing property owners. It is up to them to decide/agree to offer housing to the underhoused. That means, if you’re looking for a place, you may be reduced to finding a better-off family member who is willing to put you up.

Rather than empowering people who are priced out of the market, secondary dwelling unit by-laws put all the power in the hands of existing property owners.

Not everyone can afford to build a dwelling unit. And when they do, they turn it into a short-term rental. Only people with $100,000+ to spare can afford to build a rental unit on their property. However, investors also want to pay back their investment. Our anecdotal research (from talking to tiny home builders) tells us that people who build a tiny home not for themselves, but as an investment, are mostly looking to rent it out short-term as a vacation rental. Short-term rental will give them a break-even point of just 3-4 years instead of 10. So… no luck for the person looking for a full-time home.

Investors also want to pay back their investment. People who buy a tiny home as an investment use it as a short-term rental to pay back faster.

Playing with incentives and controls just gets complicated. There are government-sponsored programs that encourage people to build rental units, which, again, puts money in the pockets of people who already have money… and a home. Then, the local municipalities and communities try to control that the rental units end up benefiting the right people (i.e. people who need a long-term home, not short-term vacation rentals). Limiting short-term rentals, chasing down the perpetrators. There is a complex game of carrot and stick that ensues between the government and the investors/property owners. 

Tiny home, big shelter.

Tiny homes are more than just shelter from the rain and cold. They are also shelter from financial ups and downs and from life’s crazy changes. How many of us are just one health problem, one layoff, one roof leak away from disaster? How many of us are already there? Tiny homes move with their owners. They are perfectly customized to the needs of their person, couple, or family, enveloping them in safety. 

Tiny homes are more than just shelter from the rain and cold. They are also shelter from financial ups and downs and from life’s crazy changes.

Now, we don’t have the official statistics or anything. But when we speak to current and prospective tiny house owners in Canada, they are all looking for the same thing – financial stability and a place to park their tiny homes. This is not an oversimplification. There really is an eerie similarity between all their stories. 

Instead Tiny Home Builder

Photo: Instead

Owners of tiny homes on wheels are looking for land to rent

The home belongs to the person living in it. The “parking spot” or “tiny home pad” belongs to the land owner. It costs a lot less in time and money for the landowner to prepare/maintain, thus opening this model up to more hosts, not just hard-core investors.

One idea that comes up a lot is the ability to rent the land for the secondary dwelling unit (tiny home). That way, the home belongs to the person living in it (power balance restored, good financial equity benefits unlocked). The “parking spot” or “tiny home pad” costs a lot less in time and money for the landowner to prepare, thus opening this model up to more hosts, not just hard-core investors.

It’s no longer about building (and maintaining) an entire rental residence. Putting down the appropriate foundation and bringing power and plumbing out to the pad is practically all that needs to be done – then, wait for the tiny home owner to bring in their house. And, at this publication, we know of thousands (!) of current and prospective tiny home owners who would take them up on the offer.

It’s no longer about building (and maintaining) an entire rental residence. Putting down the appropriate foundation and bringing power and plumbing out to the pad is practically all that needs to be done – then, wait for the tiny home owner to bring in their house.

Arcadia Tiny HomesBy-laws that are supposed to help with the housing crisis are actually putting more money in the pockets of people who aren’t in crisis at all. However, this can be fixed with some minor adjustments, land rental being just one of them. Some doors have opened to tiny homes in Canada, but more work must be done to fully reap the benefits of tiny living.

2 Comments

  1. Good article.

    I own a serviced vacant lot in a beautiful community in Georgian Bay ON. It is about 1.5 hours north of Toronto and 45 min north of Barrie ON. It is located on a quiet in town cul de sac. It’s a gorgeous waterfront community of 17K people; where homes sell for an average of $750K. A home on the same street as my lot, just sold in January 2022 for 750K, it was an older 2 bedroom, 1 bath bungalow, unfinished basement and app 1050 sq ft.

    My issue is paying taxes to the town every year and not being able to put a tiny home of my choice on my own lot. I am fine with no wheels and abiding by the town set backs etc. However, it is extremely upsetting that I pay money for something I own, yet cannot build/place a home of my choice that is inline with my preferred lifestyle – tiny home living. In today’s age with skyrocketing Real Estate and the industrial family needs of the 70’s far behind us, I just can’t believe we still have these dictations. No doubt part n parcel due to money grabbing taxes. If you are forced to build a bigger home, the town gets more tax money.

    I left Ontario two years ago. My partner and I purchased a tiny smart condo in BC app. 300sq ft. I sold everything, except my lot in Georgian Bay ON, to pursue my dreams of big life tiny home living with the goal of having a tiny home in BC and one in GB ON – on my own lot. This is not looking likely.

    My lot is beautiful and want to sell it. If you or anyone in the tiny home community know of anyone that may be interested in my lot, please reach out to me directly.

    Hopefully the building laws change soon.

    Thank you
    Lori

    1. Hi Lori,

      I’m exploring tiny home living in Northern Ontario and would live to hear your thoughts and challenges that prevented you from building your dream tiny home in Georgian Bay. Do the bylaws not permit tiny homes?

      A

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