July 9, 2025

When The Government Says You Can’t Live in a Gingerbread House

Picture vibrantly colored, gingerbread-esque cottage homes with trims of teal and pink and small green courtyards, surrounded by serene pine trees and winding sidewalks. Firepits and garden beds dot the landscape. Neighbors socialize at picnic tables while children play nearby. Folks of all ages mingle and chit chat. It’s not fantasy – it’s a tiny homes development in Caroline, New York.

But last year the town made it illegal to build any more of these homes. 

Local developer Bruno Schickel was inspired by a drawing of a gothic cottage straight out of a children’s book he read to his daughters. He wanted to make the quaint development into a reality near him. So he did: up went the cutesy, lovable rentable homes in CarolineFreeville, and Burdett, New York, bringing new life to vacant or dilapidated lots.

Included in Caroline’s new zoning law, however, is a requirement that rural and agricultural districts are capped at one “development unit,” or residential building, per three acres. This clause makes it impossible for Schickel to build his characteristic clusters of cozy, separated cottages.

Creative homes are in demand but nearly impossible to build in many places. A giant potato in Idaho and a real-life hobbit hole in Washington state are a few of the developments in the portfolio of Kristie Mae Wolfe, another architect famous for her handmade, shoestring-budget, lovable short-term rentals. Without any professional training, Wolfe started developing tiny homes at 27 with savings from her job at the potato factory. The wonder and detail of her homes are often the attraction for guests. But her mystical inns are often built out in the rural country, because that’s often the only place where they are legal.

Zoning restrictions like those in Caroline exist all over the U.S. and prescribe the minimum lot size for a home, amount of space required between the building and the property line (“setback” requirements), and how many units you can build on one plot of land. Together with building codes, zoning regulations restrict the possibility of what people can choose to build on their own land and constrict people who have creative ideas on how to use space.

Tiny homes can be a getaway, but they can also be a resource for disadvantaged residents. The multicolored “people-sized birdhouses” in Madison, Wisconsin, provide affordable homes, jobs, and a community to individuals who might otherwise be sleeping on the streets. In Springfield, Missouri, Eden Villages is a tiny home village operated by a faith-based nonprofit that has provided a home to the disabled or chronically homeless. 

To enable the building of these creative dwellings, cities need to reexamine their zoning regulations. The Institute for Justice’s Zoning Justice Project aims to protect the right of Americans, like Schickel and Wolfe, to use their property as they see fit. The basic premise: if it’s your property, you have the right to build something magical on it.

Fortunately, cities are finally starting to get out of their own way: Austin, Texas, recently passed reforms to reduce the minimum lot size for a home from 5,750 square feet to 1,800 square feet, and St. Paul, Minnesota, cut minimum lot sizes to 1,500 square feet. States and cities all over are moving to legalizeaccessory dwelling units (ADUs), colloquially known as backyard cottages. 

There is a lot more work to be done. Cities should overhaul their zoning codes to be less restrictive to unleash the magic of Americans’ right to make special homes. 

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