By Don Newquist
I decided to get out of the Arizona heat and head north to seek acreage on which I could build a tiny house. I was curious about the smaller communities in CO such as Dolores, Mancos, and Pagosa Springs. I always considered Colorado a treehugger state, where “green” and tiny home builders were more than welcome.
There’s no lack of nice high-end homes here. Nowhere did I see any tiny home communities that I thought would be sprouting up like weeds. Why?
Well, it comes down to zoning, and a thing known as NIMBY – Not In My Back Yard.
I’ve run into this in Arizona. The zoning laws are antiquated, and the folks running the show are antiquated. One of the major obstacles, IMHO, is “How do you tax a tiny house on wheels?”
A tiny house on wheels (THOW), is actually considered an RV, which means that the revenue collected by licensing it goes to the state’s DOT. The local municipality can only tax the land in which it sits on. So, where is the incentive to allow tiny home villages?
The solution is to come up with a formula with which to tax these units, just as you would a Single Family Dwelling (SFD). My suggestion is $2/sf. So, if your tiny house is say, 250 sf, tax collected is $500/yr. One acre could host up to 15 tiny houses, whereby the local municipality could collect $7500/yr – much more than would otherwise be collected for a 2500 sf dwelling occupying the same space.
As an exercise, I wanted to find out what the minimum amount a buyer of a tiny house would need to make in order to finance one. So, let’s just say our fictitious buyer, Bob Bagofbagels, wanted to buy a tiny home, and park it in a tiny house community, in which his space is leased. Bob needs to finance the purchase, which for a 150 sf tiny house is about $250/month. The leased space, which has hookups for water, power and sewer, is $250/month. So, his total outlay would be $500/month plus utilities.
Typically, housing should cost no more than 25% of your gross monthly income.
OK, so let’s crunch the numbers:
$500/.25 = $2000.
So, Bob would need to make at least $2000/month in order to afford the monthly payments. If Bob can work 160 hours/month, this equates to $12.50/hour. Guess what? That is MINIMUM WAGE in most of the country!
What that means is, you could take practically anyone off the street who could work a 40-hour week, and he/she CAN BE A HOMEOWNER!
The municipality wins, since they are now collecting taxes. The builder wins, because they are selling tiny houses and renting the spaces. And, Bob Bagofbagels wins, because now he OWNS something and is building EQUITY!
Don Newquist is a tiny home dweller and advocate, presently located in the Arizona desert. Don has tiny home building and solar power experience, (including off grid), and possesses a BSET. He also likes to camp in his 4×4 SUV-turned-camper. His website is www.sportutilitycamper.com.