I have no experience living in one, but my understanding is they can be hooked up to services if you desire. The reason they are on trailers is because the person who invented the first tiny house (now runs Tumbleweed Tiny House Company http://www.tumbleweedhouses.com/) was looking for a way to get around zoning laws. These houses are so small they are not allowable under most zoning laws. But if you put them on wheels, they qualify as "trailer homes" and, voila!, now you are legal.

From what I gather, the fact that they are too small to be legal in most (urban/within city bounds) areas creates all kinds of challenges. I have long been interested in the subject, and I sometimes fantasize about living in a tiny house, but I have not yet in earnest tried to make it happen.

I've lived for 3+ years in a 25' Airstream with my wife. I feel our Airstream is much better laid out then most tiny houses I see. I wouldn't want to do the loft. We love living in a tiny space. We constantly travel though. It might be a different story if the view out my window wasn't constantly changing (feeling closed in..etc.).

I'm building one right now. It's going to be about 20k when I am finished. https://goo.gl/photos/dPnx7jttphUvQXcj8