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Tiny homes are a big deal. These 14startups say they also provide cheaperhousing, generate rental

The N1 model by Escape. Courtesy of Escape Homes

High prices and low inventory continue to squeeze Americans looking to buy and rent homes.

Tiny-home makers believe they offer affordable, sustainable, and even money-making options. We compiled 14 tiny-home and accessory-dwelling-unit (ADU) startups shaking up the industry.

In today's housing market, the list of reasons to buy a tiny home stands tall.

Whether you're a millennial or Gen Z buyer facing record-high prices, a current homeowner looking to live with less, or a city dweller whose lifestyle shifted during the pandemic, tiny homes can be filled with promise.

Tiny homes can range in price and aesthetics, but typically remain under 600 square feet. Last year, the median size of a new single-family house in America was 2,273 square feet, according to the Census Bureau.

In 2020, over 56% of Americans who responded to a recent survey by Fidelity National Financial's IPX103 said they would consider living in a tiny home. As builders move to meet that demand, the tiny-home market could reach $5.8 billion by 2026, according to iProperty Management, a research site.

But it's not just individual tastes driving demand. Tiny homes are also at the center of efforts to address climate change and affordable housing. Their often-modular approach can help reduce construction costs and make housing cheaper as a result. From all-electric homes to optimizing backyards in Los Angeles, the future of housing may look smaller.

They can also be money makers. Petite, picturesque Airbnbs are popular with Instagram-savvy travelers. In states like California, homeowners are tapping companies that plop prefabricated structures down in their backyards. In one model, a startup collects rent from the tenants of the accessory dwelling units, or ADUs — and pays out a portion to the homeowner.

We've compiled a list of the hottest tiny-home companies on the market, all shaking up the industry in different ways. Here they are, presented in alphabetical order.


An Abodu home. Courtesy of Adobu

Abodu helps homeowners make use of their unused backyard space with accessory dwelling units, or ADUs. The Redwood City, California-based company, founded in 2018, promises customers none of strings some of their competitors require, such as splitting rental income.

"We don't do any sort of land lease with the owners," John Geary, Abodu's co-founder, said. "Our biggest view is that homeowners should feel free to use their backyard as they see fit and not have it tied to us as a company — or any other company."

Instead, Abodu makes its money on customers' initial purchases of its tiny homes. Studios of 340 square feet start at $228,000, though the average purchase among all its offerings is closer to $280,000, according to Geary. Abodu also offers one- and two-bedroom homes in the relatively generous sizes of 495 square feet and 610 square feet, respectively.

The company has raised $23.5 million to date, according to Geary. Geary declined to provide Abodu's revenue but said it increased nearly five times in 2021 from 2020 and is on pace to do the same this year. It already placed 100 units in backyards as of this year, and has more than 100 more units in production.