Is a tiny house the solution to big financial problems?

by andrewodom on March 12, 2014


kaiKai Rostcheck’s recent article “Is a tiny house the solution to big financial problems?” generated over 2000 shares and more than 70 comments on Boston.com alone. I had the chance to talk with him and to discuss the response to that piece and hear more about his thoughts on the tiny house market in general.

Tiny r(E)volution: First, I want to congratulate you on the buzz from your Boston.com article. Did you expect this level of conversation around it?

Kai:  Yes and No. Because that article was written for Boston.com, I partially skewed it around the question of whether Massachusetts is missing out on the tiny house movement.  But most of the demographics I used are national, and my main consideration was for the role of tiny houses in our shifting socioeconomic landscape.  Given that wider focus, it doesn’t surprise me at all that people are reading, sharing and engaging in this conversation.

TR:  Okay. Let’s just break it down. What is the article about?

Kai: It boils down to the fact that our middle-class standard of living is no longer sustainable. In a large sense, the article is not even about tiny houses. It is about rising costs of healthcare, education, rent, mortgages and retirement, compounded by lower median incomes. Within that context, there seems to be plenty of room to discuss tiny houses as part of a viable solution.

TR:  Do you consider yourself to be a voice for the tiny house movement?

Kai:  I want to be extremely careful about positioning myself as an expert. There are people who have been in this industry longer and know far more about tiny houses that I do.  I feel that they have helped create an authenticity that should never be compromised.  I also believe, as I alluded to earlier, that we’ve reached a perfect storm of socioeconomics, making the conversation about tiny houses much more compelling than ever before.  My own individual focus is that gap between “We the tiny house people” and the rest of the world. It shouldn’t be an exclusive club. So the question for me becomes “What can we do to help people understand and participate in the Tiny House movement?”

TR:  And how would you answer your own question, about “Helping people understand and participate in the Tiny House movement?”

Kai:  I am grateful to Kent Griswold for allowing me to expand on this through a March 2014 Tiny House Magazine article. To summarize, we need to deeply consider the customer experience. There are hundreds of thousands (if not millions) of people interested in what we are doing. But our industry does not necessarily do a good job of converting their interest into actual lifestyle changes. We need to meet them where they are and package our products and services in a manner that is consistent with their existing customer experience.

TR: Am  I hearing an inference to tiny houses in a mainstream context? Do you really think that is possible?

Kai:  Absolutely. Smaller dwellings already account for 10 to 15% of new residences in greater Portland. That’s a tipping point.

TR:  But that’s just Portland. Could the rest of the country really be like that?

Kai:  Again, I’ll point to this as a national socioeconomic change.  Portland is ahead of the curve but others are following. If we need more facts, just consider that fewer people are marrying and more people are moving with greater frequency for their jobs. The bottom line is that our population is becoming less wealthy and more transient.

TR:  And what about all those detractors? People whose comments on your article and others position the tiny house movement as “fringe.”

Kai:  There are always going to be people who compare tiny houses to RV’s or trailers.  We will never stop hearing from people who compare the cost of the tiny house to the cost of a shed from Home Depot. And we’re going to hear more and more loudly from people who complain that the answer to socioeconomic problems is government policy and not tiny houses.  I don’t think our time is well spent trying to convince them that our ideas are valid. Rather, I would much rather continue educating people who are open to and enthusiastic about tiny houses. After all there are plenty of them already, with more joining the ranks every day.

TR:  That’s pretty persuasive. I can’t let it go there though. You talk about the authenticity of the tiny house movement, but you are also launching several of your own platforms which seem, well, consumer-ish I guess. How do these things reconcile in your mind?

Kai:  That’s a fair question, Andrew. Here’s how I see it.  Tiny House Lending is my answer to the challenge of securing financing for your tiny house. I don’t see how it makes any economic sense for someone who wants a tiny house to keep paying $1000 per month in rent to her landlord. For less than that current expenditure, she could pay off her tiny house in just a few years.  But she does not have $30,000 in the bank. Nor can she qualify for a mortgage. So she is forced to shop around from bank to bank, looking for someone who will give her an RV loan. Worse yet, she may just choose to take out a high interest personal loan.  Peer-to-peer lending is hugely popular right now, as evidenced by sites like Kiva and the rise of donation platforms like Kickstarter. Why shouldn’t we have a community-based solution? Tiny House Lending will take a lot of the friction out of her buying process. And making the process easier should help our movement appeal to a wider range of people.

TR:  WORD. I can totally see that. But what about these other sites, “Tiny House Dating” and “I Love Tiny Houses.”  They seem pretty non-traditional in terms of the tiny house movement.

Kai: They are!  In fact, I hope that they have mainstream appeal. When I was conducting research for my articles, I came across several posts where readers lamented how difficult it can be for tiny house people to find dates.  Things seemed to be going well for them until the “big” reveal. Tiny house living, it seems, is a deal-breaker to folks outside of our community. And moreover, it may be a deal breaker to people who really want a Tiny House lifestyle but are afraid that “they will never find someone if they go down this road.” I see our choice as one of values, and hope that Tiny House Dating will create opportunities for people to create a common vision of how they want to live.

TR:  How about “I Love Tiny Houses?” Isn’t that just merchandising? How does that align with the principles of the Tiny House Movement?

Kai: Yes, I love Tiny Houses is primarily a merchandise site. We offer all sorts of personal gear like t-shirts, coffee mugs, etc. branded with the “I Love Tiny Houses” logo in unique settings. The site also includes comprehensive social media feeds and a directory of tiny house related products and services. I hope that it will appeal to three kinds of people. First, tiny house enthusiasts like you and me. We have passion for what we’re doing and want to share that message with the world.  Second, would-be tiny house people who love what we are about, but are not yet ready to begin their own tiny house adventures.  Third, people who may not be into tiny houses at all but know other people who are. For example, your friend knows that you are really into tiny houses and writing, so she gets you an “I Love Tiny Houses” journal for your birthday. Those latter two groups present us with an opportunity to expand the Tiny House” message beyond our current constituency. Maybe it’s a stretch, but if “I Love Tiny Houses” merchandise can get someone to stop and ask “What’s a Tiny House?” we are that much closer to giving another person a viable choice about his/her life.

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