The Tiny house Blog

Life after Covid-19 and How Tiny Homes Can Help - Zack Giffin

Updated on:
June 9, 2023
Zack Giffin Outside his tiny house


Zack: Hey, look at that we're here. Okay, I can't completely tell, but I think I'm live. Alright, welcome to the Quarantine Zone, everybody. It looks like we got a few different people here that I have recognized already. Hello, Laura. And hi, Terry. So anyways, I'm up here in Washington, and very excited to be part of this presentation. And I can anybody tell me; can you see the little PowerPoint piece that I brought up on the screen? I'm waiting for somebody to tell me that they can see it. Yes. All right, you guys can see it. Can you see my face as well?

So, today, I'm going to get going. I only have half an hour and for this it's not actually all that much. But yeah, I just want to start out start out by saying it's just a crazy time, you know, with everything being shut down. I don't know about you guys. But really, most of the work opportunities that I have going on right now have been canceled.

Basically, what I'm doing is I'm filling my time by trying to help out my father with his business. Because he's got a situation going on where him and my mom, they're high risk, and they need to keep their business going on. But at the same time, they need to keep themselves healthy and safe. And having somebody like myself, that can kind of help out where needs to be and, you know, maybe do some of the legwork, is a situation that I think is happening a lot right now, where people are kind of forming partnerships, and finding ways to kind of get through this and protect the most vulnerable people.

So, I'm going to basically just start out by saying that I titled this talk “Life After COVID-19, and How Tiny Houses Can Help”. And I should have really just made the talk titled “How Tiny Homes can Help”. Because I'm not here trying to tell people that I know what's going to happen in the future. And I'm not even going to just make any conjectures about what that's going to be because it's not really helpful. But what I do feel very strongly about and is that whatever it is that we end up with, after we kind of work our way through what's happening with COVID, there's going to be a lot of the same challenges that we're facing that are going to be present as there were when before COVID-19. And that in my mind is kind of the basis of what I want to talk about. Because we did have a lot of challenges. And after this whole kind of impact, especially on the economy of what's happened with this, we're going to be facing even more challenges, and the burden of the cost of housing is going to be even bigger of a concern for that many more people.

So, “Hey, hi from Nashville”, it's really seeming like there's a whole lot of people out here and I just really want to thank you for joining me. Hopefully, you know, it's Friday afternoon. Hopefully you're not like me, and you're not out of beer. That's the one part about quarantine, I don't get to store all that often. And it's alright, I'll figure it out later.

Anyways, I want to get to it, okay, because what I want to talk about is where we were before COVID-19. And in terms of the housing, you know, I'm not an academic, but I do follow housing patterns. And I talk a lot about Tiny Homes. And one thing that we all have been aware of is this next slide that I'm going to show you, which is okay, I got to go on my screen. There it is. Alright, so you guys can see that hopefully, this is a graph that's basically showing the appreciation of our home sale price in comparison with the median household income for the past, you know, three decades or more. And what you see is there's a big spike and what that spike was, is the 2008 bubble. And then we had a big drop, and that was the recession that happened afterwards. And since then, what you see is we've gone on almost the same trajectory as where we were before. Only this time, again, it's got no correlation to any increases in wages. And what that means- you guys can't see the graph? Oh, no. Oh, no, you can't see the graph. Are you sure? I have my screen sharing going on.


Can somebody confirm that you guys can see my graph? That's all I really need to know. Okay, we can see a whole bunch of people can see it. Okay, I don't have a whole lot on it. Right? So, I'm just going to keep going through this and hope that you guys can see. So,  [inaudible] has changed everything and it's led to some people feeling behind me, [inaudible] others options and saying, “Hey, well, God, there's got to be some way where I don't have to spend basically all of my free time working and all my free money paying for a place that I can't actually be at”. And that's a big piece of what we're, we're kind of all coming from. And there's more to it. But that's one of those common denominators I call it right and what has actually been perpetuating that.

Well, this is just a little graph showing you what's happened to our 30-year fixed interest rate on mortgage. And you notice that I ended this in 2017. And the answer is that basically once after 2008, we dropped our interest rates to lows that we'd never gone to before. We started to try to increase just minutely and our housing sales flatlined. And so, we dropped our interest rates. And we started to try to increase them in about 2016. And then basically really about last fall, we started a process of dropping them back down again. And then basically, everybody knows after COVID-19, that we've actually slashed interest rates even way further than we ever have before. So that's really what has been driving it.

And I'm just going to show you a slide here that just demonstrates that during the last really four decades, this starts in well, this is 1950. So really, you know, long time, but our houses have gotten just a huge amount bigger, and at the same time, the family size has gotten a lot smaller. And what that really is kind of telling of is that we have basically invested so much back here, we've poured so much of our money. So, it's not just that, you know, our homes are actually getting bigger, they're getting way more valuable. And that value has been this asset for a lot of people. But what it's done is priced out a huge amount of different people out of having access to housing. So, at the same time that our houses were getting bigger, our family sizes are getting smaller, but actually the sheer quantity of families, we're also decreasing.

So, here's a really interesting graph that I took from a report called “Making Room Housing from Changing America by AARP”. It's full of really great information if you're interested in this kind of stuff. But this is a graph that basically just showing this gray line is the percentage of nuclear family households, and that's decreasing from 1970 to current. So, it's basically the percentage of United States that is represented by nuclear families that decreased by half. And then the other line you can see is the amount of single person households. So, at this point, adults living by themselves represent the largest demographic, single demographic of home occupancy. Okay, so that's never happened before. 50% of the United States is single adults. And that is a thing that has just basically a huge demographic shift is what's happened. When you when you add the number of basically married adults without children, which is 25% percent of our population, there's really about 75% of our population is either single adults or couples married without children.

I'm going to take you to this next graph, which shows right here our housing stock. And what this is basically showing is that our housing stock here, only about 12% of the housing stock is one bedroom options. And keep in mind 50% of our population now is single adults. So, for somebody like me, who looks at it as a struggle to really create a appropriately sized housing, this represents the biggest single easy mismatch or misalignment between the housing stock and what the needs of the population are. And if you really boil the housing crisis, down to something in a nutshell, in terms of affordability and accessibility, this detachment between what we need and what we have is the leading cause in that. And it's super drastic, right? 50% of our population is single adults, 12% of our housing stock is one-bedroom apartments, or studio apartments, or something that is arguably more appropriate.

So now, if you look also down at, you know, two-bedroom apartments, well, now you're up really about, you know, 38% of our housing stock is one- and two-bedroom housing options. But keep in mind, if you add the demographic of people, which is family, or like married couples, without children, like myself and my wife to that number of single adults in our population, that's three quarters.

So again, if you can say that to people, because maybe you need a guest room, or maybe you need an office, or more appropriately housed in a two-bedroom space. Well, that's fine. But still, it's this drastic misalignment, because three quarters of our population is that, and only about 38% of our housing stock is built to the needs of that demographic. So that, to me, is something that I think a lot more people should really pay attention to when we're thinking about the housing crisis, and really, where it's coming from, and more importantly, what it is that we can do about fixing the problem.

People come to me all the time, and they say, “Zack, okay, so you're working in housing”, I don't know if people know about what I do with Operation Tiny Home, “But you're working in kind of as an advocate and speaking about changing policies to enable Tiny Homes. But do you really think that Tiny Homes can have an effect on the housing on the affordability crisis in America? And the answer is, absolutely, absolutely, they can, because what we're dealing with, is needing a tool that can be implemented into a society that basically the municipalities were already occupied, land is already divided, lots have already been created. And so, what we need is a tool that can be implemented within the existing infrastructure of what we already have in our cities.

That being said, a Tiny Home and particularly the Tiny Home on wheels, is really, really relevant because of that ability for implementation. And when I'm talking about implementation, what I really mean is that it can work in a partnership with an existing property. And there's a lot of amazing progress that's been made lately. This is something I've been talking about for a long time, is the power of a Tiny Home, and a movable single bedroom or double bedroom housing option to provide partnerships with other people who are owning homes. Okay. And what you have to understand is that we have two parts to our housing crisis, we have the part of the housing crisis where people just can't afford homes. But then we have another part of the housing crisis where the people who have homes and have leveraged a huge amount of wealth out of the appreciation of these phones are getting a lot older. Okay, and that is a flip side of what we need to deal with.

So basically, there's an amazing report. That is called “The Coming Exodus of Older Homeowners”, and it was put out by Fannie Mae and in combination with a USC professor, and it was basically just looking at what a lot of people know already about, which is this large bubble in our population, which is the baby boomers, and the amount of wealth in housing that they own.


So, what really that is kind of boiled down to in terms of a what that what that's boiled down to, in terms of a number for me, really is that two fifths of the homes in this country are owned by baby boomers. And then another 1/5 is owned by people that are older than that. So, in total, three fifths of the homes in our country are owned by people 55 and older. And based on just the way that the wealth accusation becomes basically, it's, for the most part, it's just it is older Americans that own the majority of not only the homes in this country, but the more expensive homes. And what this report was looking at is that if you take the expected and historic attrition rates for attrition, meaning people being forced to sell their homes, not on their own accord, but because they're being forced to. And these attrition rates are basically they're different for people in their 60s, their 70s in their 80s.

So as people advance in years, their attrition rates increase, and more and more people are forced to sell their homes. So, what this report was showing was that if you take the historic attrition rates, and you apply it to this older population of homeowners, what you're going to see is a huge increase in the number of homes put on the market in the next 10 years. And this is strictly due to attrition. Okay. So, what they're showing is unless we do something about that attrition rate, basically people losing their homes, what we're going to have been so many homes put on the market, that there is a mathematical impossibility, that the younger generations are going to be able to absorb that wealth transfer, if that makes sense.

So, what that is really laying out is that that's saying that we have a scary scenario, we have a huge population of older homeowners that are in homes that represent I think it's $13 trillion worth of assets, that are sneaking up into this position where more and more of them are going to be forced to sell their homes, and a good portion of them are holding on to those homes. In what I like to call basically a retirement savings. It's basically what's happened is that more and more of our country's net worth has been transferred into our housing over the last three decades, because it's been such a great investment. Why wouldn't you? Why would you invest in a traditional savings account or bonds, when you could invest in your home, watch it appreciate and sell when it's high and use that money to flow your retirement? So, we have a lot of our country that's been really looking at that process for a long time. And that's leaving us in this position, where we just simply don't have enough capital as younger generations to safely absorb that.

Oh-oh, so we got off of it. Alright, here's the coming exits, holder homeowners, there's the $13.5 trillion is owned in housing assets by Baby Boomer generation. And that's not counting the people that are older than that.

So basically, what we're dealing with is not only needing to provide housing for people, but we need to find solutions for older homeowners to age in place to be able to remain in their homes longer so that we can impact that attrition rate. And keep in mind attrition kind of it describes death it describes, you know, just anytime somebody is economically not able to float the mortgage, and they're forced out of their home. And so, what we can do to affect that attrition rate, in my mind, is to enable people and older homeowners specially to utilize their property to generate some income. And what that really boils down to is, you know, what people have been doing for a long time, vacation rentals, right? Building out vacation rentals. You're talking about renting out garages and doing mother-law apartments. You're talking about Tiny Homes, in backyards. You're talking about enabling homeowners to subdivide their home so that they realize that “Hey, maybe I don't need this entire I can divide it down. And I can rent out part of it.” And what we have right now is a world where our zoning policy simply does not allow for that in much of the country.


So, that's basically what my whole fight is about. And that's what I kind of want to talk about in terms of how we can help in terms of COVID-19, where we're going to move through, because we're going to get back to a world where we have all of these same challenges, we have all the same demographic shift, we have the detachment from what housing costs to what our earnings are, but now we have a whole new set of challenges. And we have a new set of attitudes that are all also going to affect things. And one thing that I believe very strongly is that human nature in times of conflict, it's always been the nature has been to group together to pool resources to kind of hunker down and weather the storm. Whether that be any really large winner or any kind of anything, human nature is to get together, hunker down and weather the storm.

And what we can do is try to enable policies, instead of the policies that we have, which really, it limits people's ability to provide support structures for one another. We need to look at enabling policies that enable homeowners to create support structures for people they love for friends, or even strangers so that we can pool our assets, so that we can support homeowners through this time. So, people don't lose their homes. And at the same time, we can create a solution that enables a lot of other people who need places to live, affordable options. So that is really where we're coming from or where I'm coming from.

I feel like this has been a full rant, I can't even see all of the questions, but it's amazing how many people are commenting. This is the question that I say is what, what is the first step that we can do in our communities. So, when I look out there, and I think about all the different policies that have that have kind of changed within the last few years, it's really remarkable. And there's some very bright lights that you people can look to, and those cities that are interested in opening up these kinds of zoning policies can actually look at and borrow from in terms of utilizing some of the language within their code structure. So that's an important thing. But it's not doesn't really work that well, if you don't actually know what's happening. So, one of the very first significant code changes actually happened in Minneapolis, St. Paul, where they completely did away with single family zoning restrictions. And what that basically means is that anywhere in the city, you can take a home, and you can subdivide it into a duplex or triplex. And that's an incredibly powerful solution for a lot of people. But that's also a very expensive thing to do, right.

So as a construction worker, if you want me to take your home, divide a wall down it, and then put an apartment in there, that ends up turning into a big project. And for somebody who's a homeowner that's on a fixed income that says, “Hey, I want to rent out my space. But I got to put all this $100,000, $150,000 into making it happen.” I'm never going to recoup it just by renting the space in a fashion that actually works. And that's what limits the implementation for this type of policy.

So basically, somebody says, “I need to promote operation Tiny Home more”. True. I'm really talking about the big, big scope about what Tiny Homes can actually represent to society. I mean, this is, I mean, this is what I'm trying to do is show people what makes me so passionate about just not just Tiny Homes, but allowing people affordable and appropriately sized living options, is what it really comes down to. And Tiny Homes is just a tool that really in its implementation can be so much more effective. And what I mean by that is that there's places that open up for at us which are amazing. It's basically like a tiny home in the backyard, a grandmother apartment, but it's just like subdividing a home. There's this huge upfront cost that limits a lot of the people that need that that relief, that financial relief, it limits them from being able to participate in it as a solution. And then not being able to participate limits them from being able to create a housing that could be a solution for somebody else. So that's because of the upfront cost when you implement Tiny Homes, and especially Tiny Homes on wheels, what that does is that it divides or potentially divides the upfront cost.


My wife and I, we can buy a Tiny Home. And if there's a property owner who's struggling to pay the mortgage, they can simply rent out a space for us to put it and we can hook it up to the utilities with relatively low upfront cost, and they can just start gaining an income. And that's the big difference. Because the reason that people don't actually put ADUs on the rental market, the reason that people don't subdivide homes, is that the finances don't always work out. And it's such a long-term gamble. So that's what Tiny Homes on wheels offer to society, it's a massive thing that really can not only change the game in terms of housing affordability for singles, and single human beings represent 50% of our country, but also for people like myself and my wife, who would love to own a home and live not in a space that or and have a yard, things. But it's also an amazing ability for homeowners and an option for them to start gaining some income without upfront expense.

I know I'm almost running out of time. I'm going to say that I really, really could talk about this stuff for a long, long time. And I thank everybody for coming and checking it out and being interested in Tiny houses and spreading the word about what's happening. And just to know that this whole talk wasn't about trying to predict what's going to happen after COVID-19. It is just saying that things are not going to get a lot easier. The economy is not getting better, a lot of people's lives are going to be challenged. And this is an opportunity for us to just start waving the flag and making some noise and saying, “Hey, we actually do have some real solutions that can be implemented and are being implemented some places and this is what it looks like. And it's a win for everyone, where we can really give people so much opportunity to get into houses”.

This is the piece that needs to happen afterwards. And I only got three minutes left, but it's about financing, because we can't get legitimate reasonable financing for Tiny Homes, because they're considered RV's. And what it means is that the upfront expense is totally different. Okay, this is changing. But if you can see this little slide here, I was showing that Chase bank recently announced that it would raise its minimum credit score to 700 and hiked the minimum down payment up to 20%, from 3.5%. So, I just wanted to show that this was a bank that was actually considered conservative there was offering mortgages for 3.5% down payments. And in the Tiny Home world, it doesn't work like that. If we could get a reasonable 25 year down payment on a mortgage, a 25-year mortgage on a Tiny Home, the upfront cost for that would maybe be 20% of what that it would be significant. But after that, your monthly expense would be about $500 or maybe even less with the interest rates where they are right now. And so that is a real solution.

If you can pay $500, you're- Oh, my slides already up. Anyways, my whole thing is up. But if you can pay $500 for a for a tiny house a month with a reasonable down payment you can have on a normal job you can afford to live and you can afford a dignified space. And it's not a super luxury space necessarily. It's not necessarily made for a four-person family. But keep in mind the battle is we need more one- and two-bedroom home options. We have plenty of large homes. And we have a huge number of single adults living in large homes with a huge number of empty bedrooms that are not being utilized.

So right now, I have to say, I really wish that I had more than half an hour. I felt like I had to run through things. I love you guys so much and thank you for letting me be part of the Tiny Home movement. And the one thing that I'm going to have to say is that you are up for a treat because after me Dee Williams is going to drop some real knowledge about Tiny Homes and basically, anytime that I get to spend some time with Dee, it's a massive treat. And then after Dee I'm jumping back on and it's going to be me and Dee and Jason from with an amazing guest- Jay Shafer is showing up. We don't even know where this guy is, but somebody tracked him down and he's going to join us and it's going to be so much fun. And I'm not able to do much of the talking because I just want to hear that. Thanks.

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