'Tiny homes' spread in MT to combat affordable housing crisis

There will be no silver bullet when it comes to fixing the housing crisis, but building smaller homes increases affordability by saving on the costs of material, labor and land — with the added benefit of decreasing sprawl. In fact, tiny homes present the far end of a broader trend toward smaller homes, driven by economic and cultural shifts.

Though tiny home proponents understand that giving up the majority of one's possessions to live in a 8.5- by 40-foot space may not be for everyone, they argue that there are several demographics for whom small homes are more appropriate than traditional homes — such as single adults and elderly people — and that building for those demographics benefits everybody by freeing up housing stock.

The state government shares this belief. A bill passed during the 2023 legislative session requires cities to adopt regulations to promote construction of smaller homes on the same parcel of land as existing homes, known as accessory dwelling units.

Many tiny homes are built on a trailer frame rather than a foundation which can lead to water issues in sub-freezing temperatures. All Woodland Ridge homes have water pipes inside of the structure, yet hidden, to keep them heated. For the few feet that pipes are exposed between the ground and the home, the owner must skirt the tiny home and insulate the pipe with heat tape.

The first house took Wood and Gilliland a year to build, which they did in Wood's barn. They sold it before they finished building it and then sold two more to the same couple. They now have nine employees and are looking to hire one or two more. They work on four houses at a time and build houses in less than six weeks.

All of the business's homes are still custom built. Customizable elements of the home include internal and external storage, whether to have an open floorplan or separate rooms, putting the bed in a loft or on the ground floor, whether the bathroom has a bathtub or a shower and the option to include a mini wood-burning stove. Woodland Ridge tiny homes cost between $90,000 and $200,000 to build, averaging about $150,000.

Customers have been able to work with banks to finance their homes, as homes do not qualify for traditional mortgage financing unless they are built on a foundation and are at least 400 square feet.

Less square footage, more affordability The cost per square foot to build a home increased 34% between 2019 and 2022 due to increased costs of labor and materials, according to the National Homebuilders Association.

Wood and Gilliland now spend more on materials to build a home than they sold finished homes for in 2020. Meanwhile, the median cost to build a 2,500 square foot home is $392,241, an increase of almost $100,000 since 2019.

The NAHB's cost estimate is on the low end for building in Montana, particularly in areas where the cost of materials includes the additional cost of transportation to remote areas. Brad Caton, programs director for the Red Lodge Area Community Foundation, which builds affordable housing in Carbon County, estimates the cost to build there to be around $400 per square foot.

Tiny homes are also cheaper than traditional site-built homes because they are built in a shop, which means workers don't have to spend time setting up and closing up the building site everyday or face unpredictable variables such as the weather. Woodland Ridge also saves on costs by doing all their work in house, without subcontractors.

In the first quarter of 2024, new homes were the smallest they had been since the second half of 2009, but homes are still much larger than they used to be. The median home built in 1973 was 1,525 square feet, according to the Census Bureau.

Tiny homes are attractive to prospective owners because they allow people to build a home at their price point that is "cute and not shabby," according to Julie Lasky, a real estate journalist for the New York Times who writes a column about downsized living arrangements called "Living Small."

"If you've got only a few square feet for tile, you can get some really great high-end tile and not spend a fortune, whereas you can put in easily $3,000 worth of tile in a fairly normal sized room," she said.

Wood and Gilliland have found that the state's abundance of space may actually encourage residents to downsize, because many Montanans would rather spend their time outdoors rather than sitting around at home. Plus, increased housing density is the only way to meet the need for housing without sprawling into undeveloped land.

"I tend to want to spend the vast majority of my time in the great outdoors," Blanton, the tiny home dweller from Livingston, said. "Home is just a place to sleep and be cozy."

That said, Blanton is not recreating to avoid her house.

"I look forward to being in this house every single day," she said.