By Jennifer Brooks

The next big thing in Brainerd, Minn., might be very, very small.

Tiny houses — dwellings as small as 400 square feet — are on next month's City Council agenda. Right now, it's illegal to build that small in Brainerd, but supporters of the less-is-more school of home design say it's time to relax the city's zoning codes.

Tiny homes are trendy these days. New York recently legalized 275-square-foot apartments. Madison, Wis., plans to use tiny houses to shelter the homeless. The appeal of small spaces — less expensive to buy, less expensive to maintain — only increased after the recession and housing market collapse.

Brainerd is an older city and its neighborhoods are sprinkled with hundreds of oddly shaped lots that are too small to fit a regular house. Building smaller might solve two problems at once, said city planner Mark Ostgarden. Smaller houses could fit the vacant lots, while their smaller price tags might suit the budgets of retirees looking to downsize or young couples just starting out.

But there's small, and then there's too small. Critics and planners alike worry that if the city doesn't impose some standards, tiny houses could take a big bite out of neighborhood property values.

"Who's going to want a 400-square-foot house next to a 2,000-square-foot house?" Ostgarden said. "That's going to look like a storage building, or a dollhouse."

When the City Council debated lowering the current home size limit of 750 square feet in April, Council Member Gary Scheeler cast one of two opposing votes. The council will hold a final vote June 2.

"The planning commission's job is to maintain or raise the value of this city, not to lower it. And in this case, they're lowering it," said Scheeler, who believes the city will get more value out of those small odd-sized lots if they stay vacant, giving neighborhoods some green space.

Scheeler believes Brainerd might be the first city in Minnesota to consider small house zoning. "I really don't want to be the first," he said. "I would like to see this tried somewhere else and see what it does to the community."

Jim Wilkins, who owns Tiny Green Cabins in North St. Paul, is watching the debate in Brainerd with interest. His company manufactures the kind of compact dwellings that are currently illegal under the Brainerd zoning code.

"The small house movement is about sustainability and downsizing from McMansions," said Wilkins, whose small structures have been bought by a North Dakota teacher who couldn't find an affordable place to live in the oil field boomtowns, and a college student in Boston, who planted the small structure in his sister's driveway as his own personal dormitory.

In Minneapolis, the smallest legal housing size is 350 square feet for an efficiency apartment and 500 square feet for any other dwelling.

The secret to going small is quality over quantity, said architect Sarah Susanka, author of "The Not So Big House."

"You can build a lovely smaller house," Susanka said. "What people are fearful of, and rightly so, is something that has absolutely no design thought put into it and it just lowers property values. If it's going to be smaller, I would argue that it has to be better."