- Tiny homes captured the American imagination in recent years, and sales surged during the pandemic.
- States like Georgia and Texas offer affordable options and friendly regulations.
- But in other states, higher tiny-home prices and restrictive zoning laws make owning one difficult.
They’ve been branded as a “lifestyle,” hailed as an antidote to the affordable-housing crisis, and breathlessly documented in cable-television shows.
They’re tiny homes, a segment of the market loosely defined as standalone houses — often on wheels — with about 400 square feet or less of interior space.
Tiny homes have captured the American imagination over the past decade, offering a smaller price tag and simpler lifestyle than the average single-family home. During the pandemic, sales of tiny homes surged as people sought space to work remotely or opted for cheaper housing as prices for traditional homes skyrocketed.
The research firm TechNavio has predicted the market for tiny homes will grow by $3.33 billion between 2020 and 2025.
But when it comes to owning a tiny house in the US, not all states are equal. Some have restrictive zoning laws that limit where you can build or live in tiny homes. Affordability also varies from state to state, based on tiny-home prices, median incomes, and the cost of living.
The financial company IPX1031 recently ranked the best and worst states for tiny homes. The company — which advises clients on 1031 exchanges, a type of real-estate transaction that allows investors to sell a property without paying
tax as long as they buy a new one — found that a growing number of clients were interested in learning more about tiny homes. They saw it as an opportunity for personal use or potential investments, according to Jennifer Keen, an executive vice president and manager of western operations at the company.
While homes on wheels don’t qualify for 1031 exchanges, Keen said, the structures can still be attractive to investors. Some people choose to rent out tiny homes on their properties as a way to generate additional income.
To compile its ranking, IPX1031 analyzed listings through Tiny House Listings and Tiny Home Builders to calculate average tiny-home prices in each state. IPX also factored in local regulations, overall affordability, average annual temperatures, and the percentage of the state’s land that is devoted to state and national parks where tiny-home owners can park their homes.
States with mild weather and gorgeous scenery — think places like Georgia, California, and Florida — dominate the list of top destinations for tiny-home owners. Meanwhile, states with harsher climates and stricter regulations make up the bottom of the list.
First, here are the seven best states for tiny homes, according to IPX1031’s analysis.
Average tiny-home cost: $43,192
Median income: $77,172
Parkland percentage: 1.02%
Average temperature: 46.3 degrees Fahrenheit
A state renowned for its outdoor activities, Colorado has emerged as something of a hub for the tiny-home industry. It’s home to a number of tiny-home builders, such as Tumbleweed Tiny House Company and Rocky Mountain Tiny Houses.
The state also plays host to the Colorado Tiny House Festival each year.
Colorado’s parkland coverage ranks 25th in the nation, according to an analysis by PlaygroundEquipment.com.
6. New Hampshire
Average tiny-home cost: $34,950
Median income: $77,933
Parkland percentage: 1.35%
Average temperature: 44.5 degrees Fahrenheit
Affordability is a key selling point for New Hampshire. The average cost of tiny homes in the state is the fourth-lowest in the country, according to IPX1031’s analysis. Mississippi is the lowest, at $30,000.
Average tiny home cost: $74,917
Median income: $80,440
Parkland percentage: 7.49%
Average temperature: 61.2 degrees Fahrenheit
With an abundance of state and national parks, balmy weather, and overall friendliness toward tiny homes, it’s no wonder 15.5% of tiny homes in the US are located in the Golden State. California also has “far more tiny home builders than any other state,” according to a report by iPropertyManagement.com.
Average tiny-home cost: $50,460
Median income: $59,227
Parkland percentage: 6.63%
Average temperature: 71.8 degrees Fahrenheit
Florida, much like California, offers tiny-home owners plenty of park space and lots of sunshine, making it ideal for a mix of indoor and outdoor living.
A 2020 report from the home-improvement site HomeAdvisor ranked it as the second-most-popular state for living in a tiny home. The only state ahead of it is — you guessed it — California.
Average tiny-home cost: $35,500
Median income: $62,087
Parkland percentage: 0.06%
Average temperature: 54.7 degrees Fahrenheit
What Kansas lacks in park space and climate, it makes up for in cheaper tiny-home prices and a lower cost of living than more popular destinations.
Average tiny-home cost: $48,120
Median income: $64,034
Park land percentage: 0.95%
Average temperature: 66 degrees Fahrenheit
Texas offers reasonable tiny-home prices, and its lack of a state income tax has helped draw both individuals and businesses. In hot metros such as Austin, affordability is a growing concern, prompting increased interest in tiny homes as a more feasible alternative to traditional houses.
Average tiny-home cost: $43,819
Median income: $61,980
Parkland percentage: 0.23%
Average temperature: 62.3 degrees Fahrenheit
IPX’s report notes that northern Georgia’s Blue Ridge Mountains provide an ideal backdrop for tiny homes. With the state’s mild climate, one of the lowest costs of living, and an average tiny-home cost of $43,819, tiny-home enthusiasts could potentially stretch their budgets further here.
The worst states for tiny homes
The states on this portion of the list are united by a common thread: Each of them was deemed by IPX1031 to have restrictive zoning that makes owning a tiny home on wheels difficult.
Many local governments still classify tiny homes on wheels as recreational vehicles, which you can’t legally live in full time. Dan Fitzpatrick, the president of the Tiny Home Industry Association, has been working to change the designations for tiny homes.
“Municipalities need to recognize that movable tiny houses are a totally different animal than a recreational vehicle,” Fitzpatrick previously told Insider. “The way you do that is you write in your local ordinance a definition for a movable tiny house to distinguish it from a typical RV.”
Here are the seven states that IPX1031 considers the worst states for tiny homes.
Average tiny-home cost: $46,000
Median income: $51,734
Parkland percentage: 0.14%
Average temperature: 62.7 degrees Fahrenheit
6. North Dakota
Average tiny-home cost: $34,333
Median income: $64,577
Parkland percentage: 0.21%
Average temperature: 40.8 degrees Fahrenheit
Average tiny-home cost: $50,200
Median income: $75,463
Parkland percentage: 9.1%
Average temperature: 32 degrees Fahrenheit
Average tiny-home cost: $43,083
Median income: $58,642
Parkland percentage: 0.77%
Average temperature: 50.9 degrees Fahrenheit
Average tiny-home cost: $56,445
Median income: $51,073
Parkland percentage: 0.10%
Average temperature: 66.7 degrees Fahrenheit
2. New York
Average tiny-home cost: $49,699
Median income: $72,108
Parkland percentage: 1.09%
Average temperature: 48.2 degrees Fahrenheit
Average tiny-home cost: $50,000
Median income: $57,153
Parkland percentage: 1.2%
Average temperature: 44.2 degrees Fahrenheit