Boneyard Studios

A group of Washingtonians say micro-dwellings are the future. But problems abound.

If you drive to the end of a residential street in the Northeast quadrant of Washington, D.C., you'll see a small white sign, affixed to a fence, that points down an alleyway to Lot No. 21. It is a fairly mundane address for what its occupants envision as nothing less than a little patch of housing Utopia—with the emphasis squarely on little.

Lot 21 encloses four tiny houses, each measuring no more than 200 square feet. To the homeowners, these small structures represent one possible solution to the crisis of affordable housing in major cities.

One of the homeowners, 24-year-old Jay Austin, explains the concept as he kicks back on the postage-stamp front porch of his modern, 140-square-foot dwelling he calls Matchbox. "I wanted to do this project to examine how much space people really need rather than what they can afford," he says.

Affording a decent place to live can be a trying exercise in a city like D.C., where 57 percent of residents rent their homes. The median sale price of homes in the district rose 15.7 percent over the past five years, according to Trulia, a national website that tracks real-estate prices and listings. Rising prices have locked more and more residents out of the buying market and made previously affordable neighborhoods such as Columbia Heights, Shaw, Logan Circle, and Bloomingdale more expensive for working families and young professionals.

The city does not have enough affordable housing to keep up with the demand of low-income renters, says the National Low Income Housing Coalition. The group estimates that the city falls 30,000 units short. (The upside to the city's rising prosperity, however, is an increase in its potential tax base to tackle problems exactly like housing).

This is where evangelists for the tiny-house movement come in. Proponents of this small-space living say these houses can help fill the void. They can be built in vacant urban lots, allowing residents to reuse space in dense areas. More important, the tiny houses offer a cheaper alternative to buying a condo or a single-family house. Tenants of the Evarts Street lot in Northeast Washington—a community the owners call Boneyard Studios—built their houses for about $35,000 to $40,000; that is less than the down payment required to buy many D.C. homes.

Construction on Jay's home. Images courtesy of Boneyard Studios.

"For me, it was more of an economic freedom of not wanting to be tied to a mortgage," says Lee Pera, 36. Plus, Pera and her fellow tiny homeowners built their houses on trailers. If they ever decide to leave the city, they can simply bring their homes along. So, in the eyes of the law, these homes are more like campers.

The idea of building and living in small homes has gained traction over the past 15 years through the publication of books and blogs extolling this lifestyle. In the aftermath of Hurricane Katrina, a handful of architects built small cottages for displaced residents in lieu of government-issued trailers. Other cities such as Portland, Oregon, are home to not just tiny houses but even a tiny-house hotel.

The D.C. tiny-house community began officially in March 2012, when Pera's friend, Brian Levy, bought a vacant alley lot off Evarts Street. The pair set out to research D.C. zoning laws and regulations. (It turns out that local laws require that the tiny houses sit on trailers, given the size of their lot. Residents also cannot live in their structures full-time, yet the law does not define what 'full-time' means.)

These laws mean that the tiny-house movement in D.C. remains an experiment. All of its residents, who hold down full-time jobs with the federal government or a renewable-energy company, keep other apartments. "The idea of tiny houses is much more widely accepted on the West Coast," Pera says. "We wanted a showcase for this idea, and it was hard to find anyone locally who had built these things."

Construction on Jay's home. Images courtesy of Boneyard Studios.

Three of the four houses on the lot are complete now, along with a vegetable garden, and a yard with bench, bistro table, and small fire pit for entertaining. When you walk into Austin's 140-square-foot home, it looks like a catalog for Room & Board, with framed photos, muted colors, a flat-screen TV, and rows of spices in the kitchen. His tiny home also features energy-efficient designs such as solar panels and a tank to collect reusable rain water that he uses in his kitchen sink. However, it still lacks a shower or toilet.

Despite the cool minimalist design, practical problems still present themselves. For one, it be would be hard for two adults to live in a tiny house—let alone a family with children. "It shows the extent to which some people go to find something they can afford here," says Peter Tatian, a senior research associate at the Urban Institute, a think tank in D.C. "You would think that someone with that kind of government job would be able to afford some real housing."

Nationally, the tiny-house movement also remains more of a theory than a genuine fad. Just 1 percent of home buyers purchased places of less than 1,000-square-feet, according to 2013 research from the National Association of Realtors, meaning tiny houses still make up a tiny slice of the real-estate market.

Don't expect tiny houses to rule the day just yet on solving the quandary of affordable housing, especially for a wide swath of people. (Housing advocates still extol other, more traditional methods in major cities, such as vouchers, tax credits, or housing trust funds that raise money to buy and preserve units in up-and-coming neighborhoods.)

If anything, the tiny-house phenomenon shows another possible avenue. That was exactly the intent of the residents off Evarts Street. They wanted to build a "showcase" or an art project, Austin says, to prove what is possible when it comes to rethinking living spaces.

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