New Hampshire Thinks Big with Tiny Homes

Want to live in a teepee? Then come on over to New Hampshire, where Governor Kelly Ayotte recently signed into law a legal framework for innovative housing options, including tiny houses, tiny houses on wheels (THOWs), and yurts. Under HB 1681, Granite Staters will have the undeniable right to build and live in these creative housing structures on their own land.

Per the legislation, a tiny home is defined as a detached building intended for permanent habitation that is less than 600 square feet and complies with state building codes. THOWs follow similar rules: they must be built on a trailer chassis and cannot be a recreational vehicle. An example of a style of tiny home now permitted by New Hampshire law is a yurt, defined as a round, freestanding dwelling inspired by traditional nomadic dwellings. HB 1681 also allows these creative dwellings to be used as accessory dwelling units (ADUs), meaning they can be built on the same land as a primary unit.

The immediate benefit of HB 1681 is that it expands the range of housing options available in New Hampshire. By providing a legal structure for tiny homes, tiny homes on wheels, and yurts, residents have more flexibility in choosing smaller, lower-cost places to live. Over time, it could also help bring more traditional homes onto the market.

Having a legal framework to build these new kinds of housing makes it easier to get these projects off the ground. Integrating tiny homes and other alternative housing models into existing regulations for inspections, wastewater treatment, and permitting provides greater certainty for homebuilders’ operations. This makes it easier to build because financiers have more clarity regarding what regulations they need to follow, allowing for lenders to better structure mortgages and loans for these housing options.

Current laws create a framework that prices many consumers out of the market. Under local zoning laws in many New Hampshire municipalities, it becomes nearly impossible to build anything other than large single-family homes. Based on an analysis of 247 jurisdictions, 62% of zoning for 1-family housing requires a minimum lot size of at least 80,000 square feet, nearly 2 acres of land. That is nearly 2 NFL football fields without the endzones.

Not only does New Hampshire require an unnecessarily large amount of land for homes, but if you wanted to build another piece of smaller housing on that large parcel, it is nearly impossible. For example, 85% of land zoned for 1-family housing imposes some level of regulation on accessory dwelling units, such as public hearings, occupancy restrictions, or outright bans. The result is that these laws effectively force homebuilders to build large homes on large plots of land.

By making smaller homes difficult to build, current rules also prevent many residents from downsizing, which keeps larger homes off the market for younger families who need them. With legislation like HB 1681 that frees the housing market and encourages supply of more efficient alternatives, people like empty nesters, divorcees, and retirees who no longer need large homes can effectively downsize and profit while simultaneously saving thousands in property taxes. As they leave their traditional single-family homes, young families and those initially blocked out of the housing market can access more options than before. HB 1681 provides a much-needed increase in supply, which can lead to a more efficient allocation of scarce resources and, in turn, drive housing costs down.

New Hampshire’s housing market is not going to be solved instantly by HB 1681. Some people may not want to live in a tiny home or yurt. But those who want should at least have the option, and HB 1681 delivers the freedom to do so.

While HB 1681 serves as an excellent start, rulemaking will likely be needed to address concerns about how these housing units will be taxed, especially regarding the mobility of THOWs. Additionally, future work might deliver on Senate Bill 84’s proposed maximum lot size for residential units in municipalities – one of many creative reforms that would curb excessive local regulations that choke construction. Furthermore, reviving HB 685 from the prior legislative session, which would have permitted all manufactured homes, would help increase the housing supply for Granite Staters. For now, however, ATR commends Majority Leader Jason Osborne, Senate President Sharon Carson, Rep. Joe Sweeney and Governor Ayotte for working to deliver more housing and more freedom to Granite Staters by adopting a legal framework for yurts, tiny homes, and tiny homes on wheels.