EP 37: The Evolving Landscape of Tiny Home Financing and Communities with Abby Shank

Feb 8

Written By Laura Lynch, CFP® ABFP™ AAMS® CDFA®

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Tiny homes are reshaping how we think about housing—offering not just affordability but a more intentional way of living. In this episode, host Laura Lynch, a financial planner and tiny house advocate, chats with Abby Shank about her work with the Tiny House Industry Association and her ventures in tiny home communities. Abby shares invaluable insights into the challenges and triumphs in tiny home financing, regulatory hurdles, and fostering a sense of belonging within these unique communities.

Abby Shank’s Role in the Tiny House Industry

Abby’s Background and Partnerships

Abby Shank is a key figure in the tiny house movement. As a member of the Tiny House Industry Association, she works tirelessly to advance the industry’s goals. She operates Tiny Estates, tiny home communities across Pennsylvania, South Carolina, and Florida. Additionally, Abby partners with Atomic Homes to build and sell tiny homes under the brand Endeavor Tiny Homes.

Community Structure: Shifting from Rentals to OwnershipChallenges in Establishing Tiny House Communities

From Nightly Rentals to Owner-Occupied Communities

When Tiny Estates began, the focus was on nightly rentals, allowing people to experience tiny living before committing. Over time, the model shifted to prioritize owner-occupied lots, although a few rentals remain for those looking to "test-drive" the lifestyle.

Meeting the Demand for Parking Spaces

Abby highlights the challenge of providing parking for tiny homes, especially with extended build timelines. To address this, her communities introduced home sales to meet the immediate housing needs of residents. Despite these efforts, a waiting list for parking spaces reflects the growing demand for tiny home living.

Financing Challenges and Evolving Solutions

Barriers to Traditional Financing

Traditional lenders often struggle with financing tiny homes due to collateral issues and the classification of tiny homes as personal property rather than real estate. Abby notes that retitling tiny homes as Park Models has helped secure financing through conventional loans.

Available Financing Options

Financing solutions include personal loans and longer-term conventional loans (up to 25 years). Despite some progress, there’s a pressing need for comprehensive lending options, particularly for DIY builders who face difficulties obtaining proper certifications and financing.

Embracing Diversity in Tiny House Communities

A Broad and Inclusive Demographic

Tiny home living attracts a wide range of people, from young professionals seeking flexibility to retirees downsizing for simplicity. This diversity fosters a rich community dynamic where collaboration and shared values thrive.

Reframing the Narrative: Attainable vs. Affordable Housing

Abby advocates for the term "attainable housing" rather than "affordable housing" to eliminate stigma. Attainable housing refers to homes that cost no more than 35% of the median income, making tiny homes a realistic option for many.

Navigating Regulatory Challenges

Variations in State Regulations

While Park Models are recognized in many states, licensing and regulatory requirements differ, creating a patchwork of rules. For DIY builders, obtaining certifications for legal compliance and financing remains a significant hurdle.

Collaboration Through the Tiny House Industry Association

The Tiny House Industry Association plays a crucial role in addressing these challenges by uniting industry stakeholders. Abby emphasizes the importance of collaboration to advance regulatory and financing solutions, ensuring the industry’s continued growth.

The Future of Tiny Home Financing

Innovations in Lending

The future of tiny home financing will require creative solutions. Abby sees potential in expanding the availability of RV loans and conventional loans, but progress relies heavily on collaboration among lenders, builders, and advocates.

Tiny Homes as a Housing Trend

As the housing market evolves, tiny homes are gaining recognition as a viable alternative to traditional housing. Their affordability, sustainability, and adaptability position them as a cornerstone of modern housing trends.

Conclusion

Abby Shank’s work and insights illuminate the exciting potential of tiny homes in the housing market. By addressing financing challenges, fostering inclusivity, and tackling regulatory hurdles, the tiny house movement continues to grow as a viable and sustainable housing solution. As the industry collaborates to overcome these barriers, the future of tiny home living looks brighter than ever.