Portland, Oregon famously has some of the most tiny-house-friendly laws in the country. This NPR article notes that last year Portland averaged one new accessory dwelling unit (ADU) per day, partly because the city enables almost any homeowner to build one and exempts them from certain permitting hurdles and parking rules. But the ADU boom is also a response to zoning laws that go the other way, ones that encourage very large houses and gentrification.
Portland, like most cities, limits the number of primary dwellings that can be built on a lot. This causes developers (who are only trying to make a living, after all) to build out instead of up, so most new construction consists of the most profitable single-family dwellings possible. Usually that means maximizing interior square footage, taking up as much of the lot as setbacks allow. Thus neighborhoods become more expensive to live in, and residents who can’t afford it are forced to leave.
ADUs don’t quite prevent gentrification, but they decelerate it by enabling a diversity of income levels within the same neighborhood. Smaller than the primary dwellings but efficient in terms of both HVAC and use of physical space (mainly since they tend to be new construction), ADUs offer more affordable options that fill in the fabric of an existing neighborhood. Big house, little house.