Living or starting a business in a tiny home has been a popular trend, and Colorado Springs is well known for its connections to the industry.
The city hosted the Tiny House Jamboree, which drew thousands during the past two years. The event has since moved to Arlington, Texas, because of its rapid growth, according to Darin Zaruba, founder of the jamboree and former tiny home manufacturer EcoCabins.
And even though the tiny house movement’s popularity continues to grow — thanks to builders such as Tumbleweed Tiny House Company in the Springs and Sprout Tiny Homes in Pueblo — some experts say the miniature structures might be an unwise investment because of city zoning restrictions and depreciation.
Tiny homes, big depreciation
Buying a tiny home as an investment is similar to purchasing a vehicle and trying to sell it for more money, according to RE/MAX Realtors David Thomas and Jonathan Hanson, who agreed that the value of a tiny home will only depreciate over time.
“I think the tiny house movement is harmful,” Thomas said. “For most people, especially people who are not typically investing, their home is their largest single investment.
“A lot of these [Millennials] who are buying tiny houses aren’t investing their money [anywhere else],” he said. “You now have a group of people who haven’t invested anything and may have a very difficult time retiring, so tiny homes [purchases] are very shortsighted.”
Thomas and Hanson said many Millennials saw their parents lose homes during the last recession, so they think they will benefit from buying something more affordable.
Jeffrey Markewich is a wealth adviser for United Capital Financial Advisers and a city planning commissioner. Markewich, who said his opinions don’t reflect the city’s, added tiny homes have not been on the market long enough to know if they are a wise long-term investment.
“It’s not like you have 10 years of market analysis to say, ‘This is where trends are going or not,’” Markewich said. “They’re very trendy, but I don’t know if it’s going to end up becoming a practical use of housing. I think it’s very possible — there’s a lot of promise to it.”
If future zoning allowed for it, Markewich said he would like to see businesses use tiny homes like food trucks use vehicles.
“Imagine if you had a raw piece of land, a piece of property downtown and you wanted to start a business,” he said. “It would be a heck of a lot cheaper to put a tiny home on that property and open doors as a business than actually build a foundation and an actual building. If you put a tiny home on there and the business fails, you just move the tiny home.”
The tiny future
Wise investment or not, in Colorado Springs, the challenge continues to be location. El Paso County doesn’t have many options for people who want to set up a tiny home on a residential lot.
Peak View Park in Woodland Park is a tiny-home community and RV park. It’s one of the closest tiny-home communities to Colorado Springs.
The site has 34 spaces for long-term rentals starting at $450 per month. The land also includes water, electricity and gas from local and national providers.
It’s an option not available in El Paso County: Tiny homes cannot be located in RV parks in El Paso County for more than 30 days at a time or 90 days total per year, according to Nina Ruiz, project manager for El Paso County Planning and Community Development.
But Zaruba said efforts are underway to expand options through an amendment to the land development code, which the El Paso County Planning Commission would review and then recommend whether the board of commissioners should approve it as well.
The proposal would allow tiny homes within RV parks for an unlimited time and on five or more acres of individual parcels of land throughout unincorporated El Paso County, according to Ruiz.
The proposal will first be heard by the El Paso County Planning Commission, and if recommended to be passed, will be heard by the Board of El Paso County Commissioners.
Planning commission hearings are open to the public and commissioners will address tiny homes at 9 a.m. Nov. 7 at 2880 International Circle and 9 a.m. Nov. 28 at 200 S. Cascade Ave.
Ruiz said the proposed change would include some construction limitations and site plan requirements.
“Because there are no building permits for [tiny homes], we would need to verify that there are utilities in place — so water, sanitation and then some form of gas or electric. We will be the only step in the process where basic utilities could be verified,” she said in an email.
Although proposed changes and discussions look positive for tiny home enthusiasts, Zaruba said it’s still never going to be possible for anyone to place a tiny home wherever they want.
“The only other viable solution is either a city, or somebody, changes ordinances to allow [tiny homes] as an accessory dwelling unit in a backyard,” he said.
Tiny homes should be compared to Class A RVs, Zaruba said.
“There are a million Class A RVs out there that people live in year-round in RV parks or resorts around the nation,” he said.
Zaruba, who plans to merge with Sprout in Pueblo, said Realtors and the city don’t understand tiny homes because they’re not accustomed to them.
“Typical tiny houses … are a whole different category of housing,” Zaruba said. “Anytime you ask a Realtor, they’re going to have a bad opinion on it — it’s not real estate, you can’t sell it.”