San Diego approves region’s first ‘tiny houses’ law in effort to solve housing crisis

San Diego is the first city in the region to allow homeowners to install movable “tiny houses” in their back yards.

City Council members said before unanimously approving a tiny-houses ordinance July 21 that tiny houses will help solve the local housing crisis by creating another affordable option for low-income residents that doesn’t require a taxpayer subsidy.

Movable tiny houses also could help homeowners cover their mortgage payments by creating a new revenue stream for them.

“It’s a win-win-win all the way across the board,” Councilman Scott Sherman said. “It’s a small bite of a large elephant when it comes to solving some of our housing challenges in the city.”

San Diego is following Denver, Sacramento, Los Angeles, Fresno and San Jose in approving tiny houses, which are considered ideal for college students, senior citizens and medical caregivers.

“Innovation is key to addressing our housing crisis,” said Councilwoman Barbara Bry. She said the new law also would boost the local economy because San Diego is home to some tiny-home manufacturers.

Tiny houses are similar to “granny flats” but are smaller, cheaper and easier to add to a property.

Tiny houses are typically 150 to 400 square feet, while granny flats are typically larger than 400 square feet — sometimes much larger.

Under the new city law, a homeowner can’t have both a granny flat and a tiny house — only one or the other. Tiny houses can’t be rented out for fewer than 30 days at a time, so they can’t be used as short-term vacation rentals.

Granny flats often cost between $100,000 and $150,000, while tiny houses usually cost between $40,000 and $85,000.

City officials estimate the average rent for a tiny house will be $900. That would enable a homeowner to recover the initial investment within about eight years.

Adding a tiny house is quicker and easier, primarily because they are built in factories and placed on a chassis, while granny flats are built onsite and attached to a concrete foundation.

It usually takes six to 18 months to build a granny flat, while a tiny house can be in place 30 to 45 days after placing an order, city officials said.

Though movable tiny houses have wheels, they aren’t like a conventional trailer or recreational vehicle. Instead, they are built like a traditional home, with interior space geared for daily living, city officials said.

Because of wildfire concerns, tiny houses aren’t allowed in neighborhoods that abut canyons or wilderness.

Despite tiny houses being potential competition, members of the local development community said they support the effort.

“A variety of housing options are essential to addressing the chronic housing shortage, and tiny homes add to a long-term strategy of housing affordability in the city of San Diego,” said Angeli Calinog, a policy advisor for the local chapter of the Building Industry Association.

Several city residents also spoke in support of the new law.

“If tiny houses on wheels become legalized, I would be able to afford housing while my husband and I attend school,” said Emely Aguirre. “This would allow me to take more time off work to devote to my studies and hopefully progress myself further in life and contribute to my community. This type of housing would be an amazing solution until I accomplish my degree and go on to buy my own home.”

Robert Myjak said the benefits of the new law include “lower-cost homes, potential villages for lower-income people to live, lower cost to house the impoverished, job creation and less destruction of land.”

Sam Lyons said tiny houses could become a rung on the housing ladder.

“There is a huge housing crisis in this city, and tiny homes could keep many people off the streets,” he said.

Nationally, the tiny-house movement began as an attempt to downsize and live more simply, often with a smaller environmental impact. Its growth was supported by TV shows like “Tiny House Nation.”

Since then, the focus has shifted to using tiny houses as a solution for homelessness and the lack of affordable housing. ◆