Georgia City Sued Over Ban on Tiny Houses, Small Cottages

Requiring that homes and apartments be a minimum size is a major driver of high housing costs. A new lawsuit from a nonprofit developer argues those rules are also unconstitutional.

Can the government force you to buy a larger, more expensive home than you want? That's the question at issue in a lawsuit filed by a nonprofit housing group against Calhoun, Georgia, over its minimum home size requirements.

For the past several years, Tiny House Hand Up, Inc. (THHU) and its executive director Cindy Tucker have sought to provide affordable housing for people in Calhoun by building smaller homes, which are cheaper to build and can be sold to people of modest incomes without the need for government subsidies. However, the city's requirement that new single-family dwellings be at least 1,150 square feet is frustrating this effort to create private, affordable homes.

Minimum unit sizes, for single-family homes and apartments, are common across the U.S. and considered a major driver of high housing costs. Those with means are forced to purchase more house than they otherwise would, while people with lower incomes are regulated out of the market entirely.

Cities and states that have reformed their regulations to allow for smaller homes—including California's legalization of accessory dwelling units and Houston's minimum lot size reforms—have seen a wealth of new development.

But despite repeated conversations between Tucker and city officials about how Calhoun's own minimum home size regulations are thwarting THHU's mission, those restrictions remain unchanged.

Earlier this month, the city council also denied THHU's application for a zoning variance that they requested for their Cottages at King's Corner development: a project that would build an initial six small homes (with plans to add up to 40) on an eight-acre plot of vacant, donated land.

In response to that rejection, THHU yesterday sued the city and the members of the city council.

"The Georgia Constitution requires that zoning restrictions bear a substantial relationship to the public health safety and general welfare. These minimum home sizes don't serve any of those purposes," says Joe Gay, an attorney with the Institute for Justice, a public interest law firm representing THHU. "Smaller homes are completely healthy and safe. People around the country live in smaller homes and even in Calhoun, people live in smaller homes that were built before this ban was enacted."

Indeed, the land that THHU has acquired King's Corner project was initially zoned for industrial uses. That would have allowed the nonprofit to build a truck terminal, scrap metal processing facility, or any number of other types of seemingly more impactful developments without any issue, notes Gay.

Instead, THHU and Tucker, its director, had hoped to build several one- and two-bedroom cottages on the land. Each would be between 540 and 600 square feet, and come with their own kitchen, living room, and covered porch.

The smaller size of the cottages would enable a sale price of around $99,000, according to THHU's complaint. Their lawsuit says that the nonprofit has finished building plans, obtained financing from a local bank, and has contractors at ready—everything it needs to start work on King's Corner. Except the city's permission, that is.

Because these homes are too small to comply with the city's zoning code, THHU applied for a variance in August 2021. At an October city council meeting, Tucker said that her planned cottages would meet a need left unmet by the larger, zoning-compliant housing being built by private developers and government-subsidized affordable housing providers like Habitat for Humanity.

"We are not subsidized housing in any shape, size or form," said Tucker at that meeting. "We are not trying to step on anyone's toes, we're not trying to compete with anyone, but we saw a gap where we thought we could fit in."

Not everyone who spoke at that city council meeting was as eager to see the gap for affordable, private housing filled.

"If they put them little tiny houses in this neighborhood where we have bigger houses, the first thing I'm thinking of is that they're going to [be] priced less, and it's going to bring everyone's price down," said one member of the public.

Another woman saw the possibility of lower-income people purchasing the planned King's Corner cottages as a bug, not a feature.

"They're keying on low-income housing. You think of low income, how are they going to keep up with everything [like] trash pickup and this and that, and then it's not going to cause more issues and more riff raff than what we're already dealing with?" she said.

In the end, the city council rejected THHU's variance application. Left with no other options for starting their project, the nonprofit decided to sue.

Their complaint argues that Calhoun's minimum home size requirement violates the case law surrounding the Georgia Constitution's Due Process guarantee, which only allows zoning regulations that bear a "substantial relationship" to public health, safety, or welfare.

Minimum home sizes fail that requirement, says Gay. He notes that the city's building code (distinct from its zoning code) already imposes safety regulations on buildings, and the King's Corner development would be in full compliance with those. There are already a number of existing homes in Calhoun that are smaller than 1,150 square feet that have been grandfathered in under the current zoning code.

Governments' court-recognized powers to regulate development to combat the (supposed) negative externalities of traffic and density also don't apply, says Gay, because THHU's smaller cottages would lead to less traffic and density than the larger homes required by the zoning code.

The fact that the city would have allowed an industrial development on the same site "really unmasks what these kinds of bans are about," Gay tells Reason.  It's "not to promote a legitimate government interest, but it's about excluding from the community people who could afford a smaller home."

Today, the Institute for Justice and THHU submitted their lawsuit to the Superior Court of Gordon County, Georgia. It will be reviewed by a judge and then filed.