Tiny bungalows are popping up in back lawns across the U.S. as more American adults welcome their grandparents home with “granny pods.” Denise Martin, a 65-year-old retired financial advisor and grandmother of three, has been cozied up in her own miniature home for over a year—right in her daughter’s backyard.
“The primary reason why I relocated here was because I had a granddaughter, and I now have a second granddaughter who’s four months old,” Martin tells Fortune. Luckily her son-in-law, Bijan Taherkhan, just so happened to own his own micro-home business: Spindrift Tiny Homes. And with enough room on the family’s property in Bend, Oregon to fit another structure, Taherkhan built her a custom model suited to her needs: a 10-by-10 foot loft where she sleeps, hovering above a 300-square-foot living space.
Martin says it took less than three months to build her granny pod, which set her back less than $200,000. It took her six months to adjust to living in such a small space—but Martin believes it’s worth it to live near her family and save some coin in the meantime.
“There was room to put one on the property for me, and that enabled me to be close to the grandchildren, help out the family when needed, [and] just participate in all the things that go on on this property, and live very comfortably at the same time,” Martin says.
While grandparents like Martin get a sense of independence while still being able to connect with their families, there’s also another huge perk to tiny homes: a lower cost of living.
Jason Waugh, president of global real estate brokerage Coldwell Banker Affiliates, tells Fortune that he’s witnessed an influx of granny pod requests as families are trying to scrape by. He says multigenerational living is on the rise largely out of “economic necessity.”
“Whether it’s a tiny home or a granny pod, it’s a growing trend because of affordability issues and economic uncertainty that we’ve navigated over the last three years,” Waugh explains, pointing to “mortgage interest rates, or just overall economic conditions and shortage of [housing] inventory.”
Why retirees like Martin are investing in ‘granny pods’ over houses
Martin moved from Arizona into her Oregon granny pod back in December 2024. Spindrift Homes, which manufactures tiny homes for typically under $160,000, assembled the unit—flush with a deck—within a matter of months. She says it was a fairly painless process: there was no permitting or DMV registration required. It took her half a year to finally get used to her 400 square-foot micro living arrangement.
Martin says she had to radically downsize all of her material belongings—especially clothes. But the difficult adjustment taught her that she doesn’t need everything that she once thought she needed.
And the upsides have been undeniable. Martin says rather than opting for cheaper compact housing like a motor home or RV, tiny homes are actual houses with insulation and furnishing: the best way to downsize while retaining some normalcy.
Plus, living out in her granny pod is “absolutely cheaper” than being full-time at her Arizona house, which she moonlights two months a year. Martin explains that she uses minimal utilities, and the cost of her build was just a fraction of what a regular house costs. After all, the median sales price of a U.S. home is $410,800, according to the Fed.
“They’re extremely affordable, everything is included,” Martin continues, adding really the only thing she pays for is gas, which powers most of her appliances. “I have a washer and dryer combo unit. I have a gas stove, gas water heater, so that just runs off of propane tanks I go and get once a month for $35.”
But the real reason she’s uprooted her life to live in a granny pod isn’t money, it’s family. And her child care assistance goes a long way to help her daughter, Sarah Taherkhan: a working mom who also holds a job as Spindrift Tiny Homes’ office assistant. Martin helps drop her grandkids up at preschool and pick them up, is available for babysitting in the evening, and can cover if their parents need to go on vacation.
Even just dropping in to hold the baby so her daughter can take a one-hour nap goes a long way.
The resurgence of granny pods: an economic convenience to tackle costs
America’s retirees are being dragged back into the workforce to make rent in a cost-of-living crisis. Around 20% of Americans aged 65 and older are employed—nearly double the share of those who were working 35 years ago—according to a 2024 analysis from Pew Research Center. And among Americans who do stay retired, two in five worry their savings won’t cover their ideal retirement, according to a 2025 survey from investment banking firm D.A. Davidson, affecting millions of baby boomers and Gen Xers.
“All [micro house trends] bubble up to what the overall real estate market’s major headwind has been—and that’s affordability,” Waugh explains. “These senior lifestyle communities are getting more and more expensive, especially the more services that they provide. So it makes better sense to come together and share those household costs.”
The real estate expert also says that with grandma and grandpa around, the multigenerational “granny pod” setup eases the burden of child care costs. And it’s a welcome relief when the amount of money it takes to raise a kid has surpassed rent in dozens of U.S. cities; depending on where a kid is raised, child care costs averages at $297,674, but can hit as high as $362,891 over the span of 18 years, according to a 2025 analysis from LendingTree.
“Look at the cost of child care: that is growing, and really expensive. So if you’ve got multiple children that need that, is it better to have grandma or grandma, or niece or nephew, coexist on this property?” Waugh explains. “It’s economic necessity, convenience, and care. I think those are the three main drivers.”
