Tiny houses could be a solution to the housing crisis

National combined rents for houses and apartments were the highest they have been in January 2023 at $623 a week.

With many struggling to obtain affordable accommodation, cost conscious Australians are looking for alternative options.

LGA's around the country are also beginning to embrace tiny houses as one of the ways to ameliorate Australia's housing crisis.

Although they have often been looked down upon and even banned in many states, two councils have announced investment trials in tiny homes due to a lack of housing.

South western Victoria's Surf Coast Shire Council, which covers townships along the Great Ocean Road, is running a two-year trial on mobile tiny homes.

The trial will provide a better understanding of how tiny houses on wheels may impact neighbourhood amenity, wastewater management as well as establishing appropriate locations with consideration of bushfire risk.

Under the trial people will be able to apply to council for a permit to temporarily live in tiny houses on wheels on private property.

In Western Australia, the Shire of Esperance is the first local council in Australia to approve a tiny house planning policy for permanent living.

President of the Australian Tiny House Association Janine Strachan told ACM Esperance was leading the way in acceptance of tiny houses for permanent living.

"The tiny house sector has been waiting for that one council to accept that tiny houses can play in providing a legitimate housing choice.

"We understand that other councils are observing this action taken by the Shire of Esperance, and it will only be a matter of time for other local councils to follow," Ms Strachan said.

"At a time when the housing crisis spans all parts of Australia from regional to rural to urban landscapes, we need to explore and embrace alternative housing models so that housing for all can be realised."

Caravans are another popular option for off-grid living.

Musician and landscaper Shaun Fogarty, 33, left an inner city Melbourne unit 10 months ago for a caravan on 60 acres of land in north eastern Victoria.

He said his expenses have reduced significantly, and he doesn't miss the city.

"My cost of living has drastically changed," Mr Fogarty told ACM.

"I pay 70 bucks a week, pretty much just to cover bills, but for the most part my payment is barter, doing work on the farm, in the garden, for the property owner."

With a composting toilet, gas stove and small oven, the caravan set-up lacks the creature comforts of the tiny house model, which can cost around $50,000 to a couple of hundred thousand for top of the line luxury tiny homes.

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Mr Fogarty said living small, whether it be in a tiny house or a caravan, required a mindset shift to tackle cost of living and sustainability concerns that have placed enormous strains on the average renter.

"It's a beautiful reduction, a counter to consumerism. These ways of living are very achievable," he said.

"I think as a whole people aren't ready for this type of living. But no one is when they're desperate, and that's what this housing crisis is leading to."

You can legally live in a caravan permanently in Australia. The process requires a person to move around to different places or to obtain a license in order to make the situation permanent.

Tiny houses exist in somewhat of a legal grey area. Most tiny houses are built as moveable dwellings in Australia, so most councils consider them caravans. Land ownership facilitates parking a tiny house permanently, but this can be a significant barrier to those seeking to reduce their costs.

The degree to which local councils permit very small dwellings depends on factors such as dwelling type, lot characteristics, planning scheme zoning and overlays, and state regulations.