Millennials thinking small for affordable housing

Harvard law studentPete Davis says he wants to live in his own tiny house someday.In the meantime, getting a taste of the lifestyle now by offering it to othershas been an unexpectedly successful venture for him.

Davis is the co-founder of Getaway, a project that rents out tiny houses in the woods around Boston, Mass.,for people seeking a retreat, orfor those who want to testif tiny house living could work for them on a more permanent basis.

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The project is one of many smallhousing initiativesin what amounts to agrowing industry inmillennial housing, particularly as rising real estate costs in both Canada and the U.S. havemade traditional home buying much lessaffordable.

The tiny housemovement, which has seen entire tinyvillages spring up in Oregon and Texas in recent years,is working to fill that niche,and was the inspiration for Getaway.

Davis said the appeal of tiny housing isin the shifting priorities of millennials, those in their 20s and early 30s,who seekhumbler existences.

"I think it's because there's been a transition in lifestyle of what people think the American dream is," he said. "The idea of the ninetiesover-consumptionof showing off all the stuff you have and getting the big screen TV has changed to the desire for more authentic experiences."

Communal living

Another small housing idea that's gaining traction in the U.S. is the idea of expanding dorm-style living into post-universityadulthood.

Commonspace,arealestate venturesituated in downtown Syracuse, N.Y., is selling the idea of living in a tiny apartment that is part of an active community. Set to open in May, the project will see residents live in small, 300-square-footmicro-units with larger shared areas like kitchens and relaxation areas.

Troy Evans, one of the co-founders of Commonspace, says the idea is about providing residents with both a community atmosphere and a private space.

"It's a very warm and welcome space.It's not like you're going to beunhappywhenyou'rein your private space," hesaid."We'll give you that and acombinationofpublicspace so trying to create that perfect balance."

Evans noted the space has received a lot of interest, andaffordability is a big selling point.

Units in Commonspace rent for $750 to $900 per month, compared to the $1,100 price range of other single-bedroom apartments in downtown Syracuse.

Evansexpects the communal living idea which has already taken root inNew York City and San Francisco will continue to gain traction.

"I think you're going to start seeing them pop up everywhere," said Evans."I think other people they're going to try it just like we are."

Deferring the American dream?

Thisnew housing movement seems to be coming along asU.S.millennialsare delaying when they purchase homes.

A recentstudy out ofthe University of Illinois suggests the country'smillennials are taking more time to buy a house, deferring on what's often called theAmerican dreamfor financial reasons.

"Alot of millennials are paying off their student loans and that would take a big portion of their paycheque," said Yilan Xu, a professor of agricultural and consumer economics at the university, who co-authored the paper.

The study notes that while millennialsare still interestedin buying a home eventually, they are seeking different types of living arrangements from whattheir parents had.

"They are more open to the options of having a town house versus a single family house," said Xu."They are open to those kind of options and they typically desire a smaller home than their parents' generation."

Small houses in Canada

The home-buying power of millennials isstronger inCanada. A report released in January by TD economics shows over 50 per cent of Canadians aged 25-35own a home, as opposed to 36 per cent of their U.S. counterparts.

But smallhousing initiatives have been making their way to Canada as well. Tiny housing has been springing up across the countryand the condominium market isbooming in urban centres like Toronto and Vancouver.

Steve Jackson, program manager of the Co-operative Housing Federation of Canada, says his organization has also been trying to appeal to millennialslooking for affordable housing, but a lack of new co-op initiatives has been a roadblock.

"It's unfortunate that there are no major programs to develop new co-op housing," said Jackson. "We know that a lot of millennials do see co-op housing as a wonderful option. It would be great if the waiting lists weren't so long."

While Davisdoesn't thinksmaller houses will supplanttraditional ones, he sees it as a market that will grow.

"Cities are going tostart allowing it, businesses are going tocome up to make this happen," he said."There's going to be a new age of real estate developers who are going to build these."