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With more people fleeing expensive cities like New York and San Francisco for the suburbs because of COVID-19, some families are investing in tiny homes or accessory dwelling units to live alongside stand-alone homes for families with elderly parents, college kids home for the summer and millennials working remotely.
“There’s been a huge amount of people that have left cities with high rent to move to Middle America for a lower cost of living. It’s this new trend of intergenerational homes – we’re seeing two, sometimes three, generations on one property now,” Caleb Barclay, a product designer for Arizona-based Dwellito, which sells prefabricated homes online, told FOX Business.
The demand comes as more people flee cities. Nearly 40 percent of people living in urban areas said the COVID-19 pandemic has made them consider leaving for a less crowded area, according to a survey of 2,050 U.S. adults, according to a Harris Poll.
“People are saying, ‘We’re downsizing,’" Barclay said. "There’s a big movement towards minimalism and prefab homes maximize a small space and make it feel like it is spacious with an open floor plan."
Rules for building an accessory dwelling unit and how many people can live in it depend on the municipality or county zoning code. But more seem to be revisiting their permit policies during the pandemic. Washington upgraded its building permit application for accessory dwellings to include an online process. Previously, it took months to complete.
California is noticing a surge. The number of approved accessory dwellings increased to more than 7,000 in 2018, 50 percent higher than in 2017, according to the San Francisco Chronicle. And Atlanta in April was also on track for a 150 percent increase in the number of accessory dwelling permits this year, Curbed reported.
Backyard tiny homes and cottages can range in price from $40,000 to more than $200,000 depending on the size, number rooms and amenities, Barclay said. And on the more affordable side, tiny homes can cost $25,000 including finishing costs.