This is an interesting article from brandonsun.com that discusses a recent housing trend:

Something small is afoot. Backyard cottages — from 800-square-foot bungalows to Lilliputian studio cabins — are springing up behind houses in many cities, some of which have changed zoning laws to accommodate them.

Often, the cottages are built for aging parents or grown children. Sometimes, they're rented out for extra income, or are used as studios or offices.

"Backyard cottages increase density in a nice way," says Bruce Parker, principal of the Seattle-based design collective Microhouse. "They use existing infrastructure and ... they're inherently sustainable. A cottage is the antithesis of a big house on a tiny lot."

Seattle updated its zoning laws in 2009 to allow for "accessory dwelling units" on single-family lots of at least 4,000 square feet. (Permits are needed depending on the size of the cottage and whether it has plumbing and electricity.)

While Parker had been designing small homes for several years, the microhouse law inspired him to focus on backyard dwellings. Soon, he was teaching classes on backyard cottages with the Seattle firm NCompass Construction.

About 90 per cent of his students, he said, wanted to build a cottage for their parents.