The No-Mortgage Natural Cottage

From treehouses to tiny homes on wheels, a no-mortgage shelter can help you eschew expensive rent and debt.

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A Carpentry for Women class inspired Miwa Oseki Robbins to build her own tiny home on wheels.

Photo by Miwa Oseki Robbins.

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When our oldest daughter was 9, I caught her dragging my air compressor into the woods, where she had stashed a bunch of my building materials in preparation for building her first treehouse. Fast-forward 10 years: When she started attending the local community college, we were pleased that she chose affordable schooling and excited that she would be hanging around longer. But then she announced that she was moving out — not into a house or apartment that would cost more than her tuition, but into a treehouse that she would build herself.

It isn’t just children who dream of escaping the rent/mortgage treadmill in their own little cottage in the woods, but as we get older — and more weighed down by our jobs, responsibilities, and stuff — we accept the notion that we’re trapped. That only an expert can build a house. That shelter has to cost hundreds of thousands of dollars. That zoning and codes make living your no-mortgage dream impossible. That you can’t just go out into the woods with an axe and a saw and build something you can live in. Fortunately, my daughter didn’t get those memos. Instead, the time she spent in her formative years with folks who had done just such a thing convinced her that she could do it too.

Locating Your Cottage

I like to think of a DIY, no-frills cottage as a way out of being trapped. Moving into an apartment of her own would’ve cost my daughter at least $600 per month in our area. Instead, her total expenditure came to a little less than $2,000. If she stays there for four years and pockets the difference, she’ll walk away with more than $26,000.

To someone who’s just starting to dream, or who has their hands full just trying to keep their head above water, this type of living may seem impossible, but variations on this theme are quietly playing themselves out all around us. Most of the people I know who have done something like this haven’t owned the land they put their cottage on. Many of us didn’t have the cash or even a credit card when we started, but we had a plan we were willing to take a chance on.

If you don’t own land, such a plan might include a proposal to a landowner where you want to live: “Let me build a cottage on your land in exchange for five years of free rent. At the end of five years, if you like me, let me stay with low rent. If you like the cottage, let me build you another on similar terms. If you don’t like me or want to do something else, start charging me a higher rent.”

At first, building a cottage you might walk away from could seem silly, but this type of agreement works for landowners because there’s a set timeframe and something useful offered in exchange. I love my daughter, but knowing I would get a treehouse out of the bargain may have boosted my enthusiasm a bit. I might’ve also been a bit more generous in giving her cool building materials from my hoard of treasures because, well, I want my — I mean her — treehouse to be nice.

Knowing you could walk away from your cottage will also help you focus on the basics. What do you really need to be comfortable? Can you scrounge it rather than buy it? Does it need to be perfect? My daughter didn’t really want to build something she would have to walk away from, but the trailer frame alone for the tiny house on wheels that she wanted to build was more than twice her entire budget. She also wasn’t certain there would be a safe spot to park her tiny home at the next place she wants to live, making it more of a burden than a dream. Building a walk-away cottage was thus more practical and economical, leaving her with more freedom in the end.

Code Considerations

My wife and I got married in college in a town where housing was expensive. My aunt had an attic room above her garage that she wanted to turn into a game room for my cousins, but she lacked the time and money to do anything about it. So instead of spending our money on one month’s rent, we bought drywall and insulation and put in a couple of weeks of work, after which we had a place to stay for a year, and my aunt had a new rumpus room. There were definitely drawbacks, such as going through the garage to the other end of the house to use the bathroom (we had not yet discovered the composting toilet), cooking with a hot plate and microwave, washing dishes with no running water, and waking up at 6 a.m. on a Saturday to the sound of the garage door opening below our heads, but we made it out of college with no debt.

In some ways, that attic room was the perfect walk-away cottage. It wasn’t the hippie school bus we had dreamed of, nor the backwoods cabin, but it was close to school, a lot cheaper than a bus, and easier to heat, and because it was an unused space inside an existing building, it was certainly less likely to draw unwanted attention from our neighbors and the law.

To be clear, many areas of the United States have regulations that present formidable obstacles to the no-mortgage cottage. Codes designed to combat exploitative slum housing and dangerously substandard construction have combined with zoning that encourages economic expansion (larger houses, larger loans) and social expectations (“You can’t live like that in my neighborhood — we have standards!”) to discourage tiny, self-built, cash-funded homes. In Seattle, for example, you can build an “accessory dwelling unit” (also called an “in-law suite” or “infill house”) but the rules are so stringent that hardly anyone can afford to build one legally.

There are loopholes: Some areas (mostly rural) have no zoning and no effective enforcement of building codes. In many states, farm buildings are exempt from zoning, and a caretaker shack or worker cottage is perfectly legal. Many municipalities allow you to build a “temporary” building on skids or a “shed” of less than 200 square feet without requiring permits. A treehouse, provided it isn’t huge, will often get a pass just because it’s a treehouse and everybody loves treehouses (except when they don’t). Regardless of size, if your building has its own entrance as well as its own plumbing, cooking, and bathing facilities, it will probably be considered an accessory dwelling unit, so look into whether your loopholes will apply.

Especially if you’re going to break them, you should know what the rules are and the consequences of getting caught. Code officials rarely go around looking for violations, wandering into your yard to see whether anyone is living in your shed, or peeking into your windows to see whether your garage has been turned into an in-law suite. Most enforcement is the result of a complaint. So a good relationship with your neighbors will go a long way toward minimizing your risk of being turned in, but it won’t eliminate the risk. You can manage the risks if you know what they are.

Tiny Homes on Wheels

One recent trend in cottage building is the tiny home on wheels (THOW). It’s a captivating idea that one can park a dream in the driveway, connect it with a hose and an extension cord, and rent out the “big house.” Imagine your chagrin upon finding out (after buying in) that your community won’t let you just move into your THOW (or any RV for that matter). If the financial success of your plans depended on moving in, you may find your “way out” has actually trapped you even more.

My carpenter friend Miwa in New York didn’t have a big house or even property, but she was inspired to build a THOW of her own. She wasn’t settled down, land and rent were expensive where she was living, and the Carpentry for Women class she was helping to teach was building a THOW, so constructing her own made sense. She knew that local zoning wouldn’t allow someone to live in a THOW (if they found out about it), and living on borrowed land can be less than stable, so she was prepared to move it around if necessary. Miwa says, “I’ve only had to move it twice, and that was for convenience of building! I got lucky and feel pretty confident that I could stay where I am as long as I want.” She’s fairly close to town but the stars are beautiful, and because the costs are low, she can devote her time to pursuing her passions.

Measuring Your ‘Risk Niche’

When looking at building your no-mortgage cottage, calculating your “risk niche” becomes a high art. It’s a gamble, so you’ll need to know your odds and bet accordingly. Our odds of having to leave my aunt’s house and our investment in the property were both small, so our risk niche was ideal. The risk was also small for my aunt, as she knew we were almost done with school and she wouldn’t get stuck with us, and the improvements to her property were unlikely to be ordered to be removed.

Our friend Stardust found her “cottage” in an abandoned house in a suburb of Detroit. The house needed too much work for the owner to legally rent it out, but empty houses in that area are regularly vandalized, so the neighbors took the unusual step of actively recruiting Stardust to squat there. They even let her use their water and electricity so she would be comfortable. She went about fixing the house to make it livable. She kept an eye on Craigslist for free paint and finished the floors with polyurethane over brown paper bags and white glue. In the two-plus years she lived there, she didn’t get thrown out and the house didn’t get vandalized, so everybody won.

Stardust’s investment in time and money had to be calculated against the possibility that she could be evicted any day. If your cottage is built on borrowed property or without code approval, your risk assessment needs to reflect that. Weighed against a $600 monthly rental fee, my daughter could’ve walked away from her treehouse after four months with cash in her pocket (and I would still have a treehouse). Even if she’d spent $6,000, she could’ve walked away after a year with a net positive. But the gamble exists from day one, so your cottage investment (time, money, and love) has to be one you can afford to walk away from if it doesn’t work. Society talks about banks being too big to fail, but I’m talking about doing something too small to fail. If I build a cottage on my own property and it’s below the minimum square footage that requires a permit, I’ll still have a shed, even if I can’t live in it. If I build a bigger cottage, my investment will go up, as will my risk of being required to tear it down. In the cottage game, higher stakes aren’t what we’re aiming for.

Even if you do everything by the book, taking out a loan and buying or building a house with permits is a gamble — a relatively big gamble. You’ll be gambling that the house will rise in value faster than it will fall apart, that your job will be stable enough to allow you to make all the payments on time, and that the local economy will grow enough to allow you to sell the house for more than you owe so you can move.

One Piece at a Time

My friend Dave was tired of starting over. Every time he had to move from one rented house to another, he had to come up with a couple of months’ rent and a security deposit for the new place, hoping he got the deposit back from the last place, all to secure the privilege of paying $1,000 or more per month for someone else’s house. He really wanted to own his own home, but because he’s been his own boss for his entire adult life, he could never get a loan to buy a house, even though he makes decent money. Rather than flush that deposit money down the toilet yet again, he took a leap of faith and moved into the storage room of our office for a year, pocketing his rent money.

Meanwhile, a house across the street from his mother’s house had been in the middle of major renovations when the owner died. The family hadn’t been able to renegotiate the loan with the bank and lost it. Because the house was unfinished inside and out, it, like Dave, couldn’t get a loan. After a couple of years, the exposed housewrap was starting to decay, exposing the particle board walls to rot. Not a moment too soon, the bank sold it to Dave for $15,000. When he moved in, it was pretty primitive, but every payday enabled a new project: first siding, then insulation, then drywall. Last month, he showed me his new wood floors. “One piece at a time,” as the Johnny Cash song goes. Dave made his own “transitional housing.” His investment was bigger than most no-mortgage cottages, but the return was also greater, and the risk was very low because the house’s value keeps increasing and no one is going to make him move out. The neighbors are quite happy to have the eyesore fixed up.

Home Sweet Home

Ted Brinegar, of the nonprofit Foxhole Homes in New Mexico, has taken the no-mortgage cottage to another level. Foxhole Homes has used New Mexico’s “experimental building” code designation (pioneered by Earthship originator Michael Reynolds) to build tiny, code-approved Earthships as transitional housing for homeless veterans. The nonprofit’s use of junk and dirt as building materials helps keep costs low. The Earthship design — with walls that store a massive amount of heat, lots of insulation (cardboard wrapped in fireblock foil), and an attached greenhouse — keep the heating and cooling costs minimal too. The building even catches, filters, and stores its own water supply, and treats the wastewater in food-growing planters in its greenhouse.

For my daughter, the greatest risks in building her treehouse were pretty small — more college debt, or maybe having to share a room with her sister. For some people, the stakes are a lot higher. Homeless people are three to four times more likely to die than folks who have shelter.

My daughter’s two-story treehouse has turned out marvelously. It’s fully insulated, with electricity and a composting toilet. It doesn’t have running water, but our laundry and shower facilities are a short walk across the yard. Her mini-fridge and microwave are good for a midnight snack, but for real food, she raids the main kitchen anyway. The treehouse took her a year to build while going to school full-time and working, which was a lot longer than she had hoped, but she dreamed about it for at least half her life, so that’s just fine.

Taking On Zoning Rules

Building code dictates the materials and the methods of putting them together to ensure that a house is safe. Building code is generally a flavor of your state’s version of the International Building Code (IBC), adapted for local conditions, such as potential hurricanes, heavy snows, wildfires, or earthquakes. Zoning rules typically dictate how big a building has to be, how far it needs to be from the edges of the property, what it can be used for, how many families can live on the property, how tall the fence can be, etc. Zoning is your community’s best guess at rules everyone can live with. Zoning rules can be changed or amended to allow for new and useful trends (such as backyard cottages), but only if the neighbors are on board.

Inspectors can’t change the rules, but you can file for a variance and present a case for an exception. You can usually find the code on your municipality’s website, along with the forms you’ll need to fill out to apply for permits, and worksheets that list the exact order in which you’ll need to do things. When you’re ready to start asking your inspectors specific questions, you’ll get a much better reception if you’ve familiarized yourself with the rules. Ninety-plus percent of the folks whom inspectors work with are professional contractors, so the inspectors will expect you to know how things work and may become impatient if you don’t. Be as prepared as you can be, and even consider hiring a local contractor to walk you through the process. If you come in wearing a T-shirt that says “stick it to the man” with your plans drawn on a napkin, you should be prepared for a less-than-enthusiastic response. If you present yourself as someone who wants to build a structure that will be a safe, sturdy, and beautiful addition to the neighborhood, you will generally find your building department staff to be helpful and accommodating.


Chris McClellan (aka Uncle Mud) raises free-range, organic children in the wilds of suburban Ohio. Building with mud and junk is his soapbox for preaching self-empowerment. He writes, builds, teaches workshops, and hosts a mud pit and demo area at Mother Earth News Fairs across the United States.