Tiny Home Study Conducted for Pennington Gap, VA
February 28, 2020
To support an ongoing partnership between Pennington Gap, VA and VT-IPG, the Institute partnered with Dr. Maria Saxton, NANO - Tiny Life Innovators, Environmental Planner and Housing Expert at Hill Studio, and recent graduate of the Environmental Design and Planning Ph.D. program at Virginia Tech, to conduct a feasibility study and to create a business plan for a tiny home development associated with the Town’s Leeman Field Park. The need for this study was driven by local government and resident interest in developing more short-term lodging options for overnight visitors engaging in family reunions, town events, outdoor recreation, and so on. Dr. Saxton has research experience investigating tiny home design concepts and worked with Town officials to explore Pennington Gap’s potential for a tiny house development through the research project. Tiny homes are part of a fast-paced, innovative, and evolving industry in housing and hospitality, offering an opportunity for environmentally-conscious design options, a lower environmental impact for the home and its occupants, and resilient, flexible lodging for both short- and long-term stays.
The final report details goals for a prospective tiny home business, describes the target market, highlights major considerations for development including zoning and construction factors, outlines site management and occupancy concerns, and presents cost projections/return on investment (ROI) based on several variables and scenarios. Based on the preliminary financial model, both the Town and project investors would likely experience a positive 5-year ROI, showing promise for a successful project. In most scenarios, the Town need only provide minimal investment, leading to a 5-year ROI over 400%. For investors, financial prospects are based on more factors, including tiny home type and occupancy rates. Both of the tiny home types proposed in the report would experience 5-year ROIs of about 70% - 115% given a conservative occupancy rate estimate of 45%.
A summary of the findings from the 100-page report were presented at the Pennington Gap Town Council meeting in February 2020 by Dr. Saxton who joined remotely, facilitated by Max Stephenson and CCC members Lara Nagle, Neda Moayerian, and Courtney Surmanek who attended the meeting in person. The visit also included a walking tour with Council members of the proposed site for the tiny home development. Council members engaged in discussion following the presentation, and will determine how to move forward with the proposed development concept dependent on the commitment of a local investor and in consideration of other housing opportunities.