Tiny houses: Real estate’s next great wave?

Gerald Cook used to build luxury houses in Douglas County, $5 million and up. His last one was 11,500 square feet. “Castles,” he calls them. The recession found him over-extended in “dirt.” Now, a divorce and bankruptcy later, he’s starting to build a house for himself: 109 square feet.

and he says he hopes to build many more.

Tiny houses have been showing up from mountain towns to Front Range cities, even out on the Eastern Plains. The Aspen Skiing Co. purchased roughly 40 tiny houses for placement in Basalt, to satisfy a painful shortage of housing for seasonal employees. In Brush, a farming town located 90 miles northeast of Denver, town officials recently spent four hours talking about tiny houses with Rod Stambaugh, the founder of Sprout Tiny Homes.

Stambaugh left California behind four years ago after tiring of the mobile credit device business. He had done business with La Junta and decided to set up his shop there. It’s become a significant business. Last year, his company built about 25 tiny houses. One of his favorite projects: The Wee Casa, a tiny home motel community along the St. Vrain River in Lyons.  From June through October, nightly rates range from $139 to $214, and they’ve been booked at 70 percent capacity, he says.

Now, Sprout is looking to relocate to the Front Range, partly to be closer to suppliers. Stambaugh says tiny homes will never be built at the scale of mobile homes, but his company is done building one-offs. He has talked with one of the largest developers in Colorado, he says, who believes that the current traditional multi-family home-building cannot be sustained.

“Their labor has gone sky high and constructions costs have gone sky high,” he says. “Their margins have become real skinny.”  But he also sees demand being driven by baby boomers who want to get out of the maintenance and responsibility of big homes. He figures he can deliver a high-quality tiny house for $65,000.  “It’s the next wave of real estate.”

In Denver, tiny homes may also help meet another niche need: shelter for homeless people in the RiNo District along the South Platte River. The city recently issued a zoning permit for 11 tiny homes near 38th and Walnut streets to serve as homes for 14 homeless people.

Working from a small shop in Englewood, Cook, with his 30 years of home-building experience, has re-established himself as owner of and “mad scientist” of Abundant Living Tiny Homes & Aquaponics. He almost jumps with excitement about the future of tiny homes. If local municipalities were skeptical at first, many have started to embrace zoning that could allow tiny houses in the urban fabric. For some people, tiny homes also offer a new frontier. “You have to go through the idea that you don’t need everything you thought you needed,” he says. He calls the process freeing.