Part 3: Pros and Cons of Living in Tiny Home Villages
In the last decade or so, the idea of living in a tiny home has become more appealing to people from all walks of life. The increase in popularity has motivated developers to create places where people can either park their homes or purchase residences that already have a permanent location.
One idea that seems to be gaining traction across the state of Colorado is building a tiny home village where people can either rent or buy houses within the community or park one there they already own. Many of these villages sell homes that are fixed to the property and the buyer must pay lot rent to live in the park.
An example of a tiny home village in the Pikes Peak Region is Peak View Park, located in Woodland Park. Peak View has spots for 50 lots and tenants pay around $600 per month for lot rent. The lot rent in this park includes water, sewer, and trash.
Another similar community is not completed yet, but it has been in construction for the last couple of years. The Village at Tamarac is located on the north side of Woodland Park and it will soon have tiny homes for sale in the $140,000 range with a lot rent around $650 per month.
New Village Causes Controversy
Last summer, a Denver developer proposed to bring a tiny home community called Bonsai Village into the Green Mountain Falls and Chipeta Park area west of Colorado Springs. The developers asked to rezone the property to a Recreational Vehicle Park zone so that it could fit 100 tiny homes and be open by fall 2022.
As soon as the signs on the property went up, the developers held a meeting and immediately heard pushback from the community. Some said that they were concerned that their property values would be negatively affected by the tiny homes. Others said that they were concerned about the land turning into a rundown trailer or RV park 10 years from now if the tiny home village idea does not prove to work.
Tiny Home Villages Prove to be a Good Fit for Some
One positive aspect of buying a tiny home that many real estate agents and tiny home developers mention is that the buyer builds equity. Therefore, young couples and single people could benefit from purchasing a tiny home versus renting an apartment where they don’t receive any equity.
According to the co-owner of Peak View Park and developer of Village at Tamarac Pete LaBarre, there are different types of people who live in the villages and many of them make up the working class of the city. He said that people who bought homes in Peak View Park around five years ago when it opened have seen an increase in values.
“In Peak View Park when people bought homes when we had spaces and were selling them at retail prices, they were paying anywhere from the mid $60,000s or maybe as high as $90,000,” LaBarre said. “The resale on those homes now is anywhere from $115,000 to $130,000. The tiny homes, even though they are classified as RVs, continue to go up in price because there is such a limited supply of homes in that price range.”
LaBarre also said that before they started developing the Village at Tamarac they did market research on Peak View Park to see if the tiny home village lowered the property values of houses in the neighborhood.
“We looked at sales prices and four years after we had opened Peak View Park, the third most expensive home in the county sold and it was adjacent to Peak View Park,” LaBarre said. “So, apparently it didn’t affect the prices. There are homes being built across from Peak View Park and I believe the sales prices are over $500,000 for one half of a duplex. It doesn’t seem to be affecting those.”
Paying Lot Rent Changes the Affordability of the Property
According to real estate agent Josh Dorsey, with Abode Real Estate in Colorado Springs, the lot rent buyers must pay deter many people from buying residences in tiny home villages. He said that the cheap prices of the tiny homes in the village at first attract potential buyers until they find out that they must pay $600-$700 a month in lot rent.
“The big thing with those is because they come across as affordable housing because people can buy a house for $120,000, but the lot rent is like $700 per month,” Dorsey said. “And I don’t think the tiny homes in the villages are even movable. That is something for people to look out for. Because if you can’t move that property than it is going to be there forever. During a market downturn, the values can be reduced significantly.”
He said there is a good chance tiny home villages could lower the property values of the houses around them. “Any piece of real estate is going to have impacts on its neighbors in terms of value based on the way that it is used and what is placed on it,” the real estate agent explained. “If you have a $700,000 house in Green Mountain Falls, you probably don’t want $110,000 tiny homes with $700 a month lot rent across the street from you. It’s going to impact your value no matter what.”
