This is a Tumbleweed Tiny House, part of a collection of more than 20 designs of houses that are small, energy- and materials-efficient, and which emphasize a smart use of space.

GRATON, Calif.--As most people know, a major reason for the current housing meltdown was millions of people buying homes far bigger than they needed, let alone could afford. To Jay Shafer, the answer is tiny.

Shafer is the creator of Tumbleweed Tiny Houses, a company based in this, yes, tiny town about an hour north of San Francisco, that designs and sells very, very small homes.

How small Tiny Houses' most petite model, the XS-House, is just 65 square feet. Yet, while you might expect to find little more than a rabbit warren inside, what you actually experience when you walk in the rustic wood front door--after crossing the charming porch in front--is a functional house complete with a living room, a furnace, a kitchen, a bathroom, storage, and even a loft bedroom.

To be sure, this isn't spacious living. It's tight, compact, and forces those who live here to be dedicated to organization and regular cleaning. "A lot of people are like, 'How can you live like this'" Shafer says. "But anybody who's lived on a boat or in a van would probably find this luxurious."

The question is, who exactly would want to live in a house where you can nearly reach your arms from one side to the other

For Shafer, it's pretty clear: it's people who are interested in a simple, green lifestyle. These days, the term "green" is thrown about left and right and often means little, but in the case of Tiny Houses, green living is a direct reflection of a choice to live very efficiently, with the minimum amount of unused space, materials, and energy. "I think that's the greenest green thing you can do," Shafer says, "buy less."

And that's an attractive proposition for the hundreds of people who have chosen to adopt Shafer's way of living: mainly, he says, single and creative types. It's "folks who want to be doing something else besides paying a mortgage," he says.

And that's clearly a huge part of it. Tiny Houses may be small, but they also come with a matching price tag. The company, which started in 2005, sells its homes at prices that seem like they're from another era: The XS-House, its smallest, comes ready made for just $39,000. And the estimated all-in price for plans, materials, and labor if you wanted to build it yourself is around $16,000--not counting the small patch of land it would need to sit on. Indeed, in this do-it-yourself era, the vast majority of his customers buy the plans and build the houses themselves. He says he actually builds and sells just one or two Tiny Houses a year.

Of course, Shafer does recognize that not everyone is ready to live in a home "smaller than some people's closets." So while his flagships are his under-100-square-feet models, he also gives a nod to couples, or even small families, that need a bit more space. As such, he currently offers around 20 different models, with another 20 or so in the works, and sizes that go as high as five bedrooms, yet which still take up just 837 square feet.

Storage is 'key' As part of my Road Trip at Home series, I recently visited Shafer at company headquarters--aka his personal 89-square-foot Tiny House--in Graton and got a chance to see first hand what I'd been hearing about for years.

It turns out that while Shafer began living in very small homes as a single man in Iowa, he's now married, and his wife, though supportive of his business, isn't so interested in living la vida tiny. So the couple shares a "palatial," 500-plus-square-foot home he didn't build adjacent to headquarters. But Shafer explained that he still spends most of his time in his Tiny House, using it both as a model for those who want to come and see what the hoopla is all about and also as his primary work and design space.

A big part of what Shafer sells is his philosophy--that too much space is a waste, and that, for some people, at least, it's not only possible but actually preferable, to live in a home that emphasizes efficiency and thoughtfulness.

Since that philosophy doesn't call for abandoning the essentials of daily life, Tiny Houses are designed with plenty of what Shafer says is the "key element" of living small: storage. Throughout the homes, from the living room to the kitchen, are little closets, cabinets, and shelves, places where extraneous things can be tucked away and put out of view so that the living space can remain clean and uncluttered. In his 89-square-foot house, he has about 100 cubic feet of storage.

And that's also a nod to another design principle Shafer regularly employs: keeping open spaces clear and pushing most "stuff" to the periphery of the intimate rooms. At the same time, he tries to make it so one room--the living room--gets as much of the square footage as possible, while limiting the size of the "activity" rooms like the kitchen to the minimum necessary to be functional.

As well, he says he always makes sure to take maximum advantage of vertical space by, among other things, including storage that starts right at the floor. This way, he wastes as little space as possible.

On wheels Technically, the smallest of the Tiny Houses are classified as mobile homes, explains Shafer. That accounts for the fact that they are built on top of frames with wheels. Yet, while the buildings can be moved around, that's not something Shafer expects many of his customers to do.

In fact, the wheels are a nod to a nearly ubiquitous zoning ordinance that sets minimum square footage requirements for free-standing buildings. But since most Tiny Houses are smaller than the minimum, the way Shafer figured out to get around the rules was to include a mobile frame with wheels, an accommodation that allows owners to place them wherever they want without worrying about breaking their local regulations.

Though the Tiny Houses are small, that doesn't mean they skimp on appliances. Here, we see the propane furnace that helps heat the highly-insulated homes. It can cost as little as $70 a year to heat them.

Appliances You might think that a less-than-100-square-foot house would skimp on niceties like appliances, but Shafer rejects that notion. It's not likely that anyone living in a Tiny House is going to have a state-of-the-art Viking range or ambient heating, but that doesn't mean going without the basics.

As such, Shafer's designs call for standard recreational vehicle plumbing and electrical systems and sometimes composting toilets or direct current power systems that support solar panels. In Shafer's own house, he's installed a gray water system that cycles all his waste water into the nearby garden. At the same time, since his house has access to services, he's plugged into his local grid. But those who want to place a Tiny House away from municipal systems can get by with propane hook-ups.

Yet power consumption in a Tiny House matches its name. Shafer estimates someone could easily get by on about $70 a year for propane, which would both heat the house via an elegant little marine heater, and power its stove. Even in the chilliest climates--recall that Shafer came from Iowa and its frigid winters--he allows that the bill would top out around $160 a year.

One thing Shafer's Tiny House doesn't have is a normal size refrigerator. Instead, he's installed a "dorm fridge," one of those little square models that holds just a few drinks, some milk, and a little food, under the kitchen sink. Clearly, Shafer doesn't see the need for a single person living in an 89-square-foot house to fill up a standard fridge.

Similarly, there's really not room for a normal sized entertainment center. Someone wanting to spend time listening to music or watching TV shows or movies would likely have to do what Shafer does: use a laptop computer.

While Shafer may well be the best-known maker and designer of small homes like this, he's by no means the only one. Yet, he argues that two of his biggest competitors, Tortoise Shell Homes and Little House on the Trailer, both put more of their energies into manufacturing their homes for customers, while Shafer says he puts most of his time into design. Still, since both of those companies are in nearby towns, he says that for reasons he doesn't quite understand, Sonoma County, where all three are located, has "somehow become the mecca for tiny houses."