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VOL. 43 | NO. 23 | Friday, June 7, 2019

Small footprint, big potential

Knoxville’s Clayton finds new niche in growing popularity of tiny homes

By Joe Morris

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Offering a different kind of housing put Knoxville’s Clayton Homes on the map more than 50 years ago.

Founder Jim Clayton saw the potential in manufactured homes, both from a lower price point that offered more people the chance to own, as well as the communities those structures could make up when grouped to share common services and amenities.

There was a market. People loved the idea of a truly mobile home with a significantly lower price point than traditional options. The company grew quickly, eventually going public in 1984 and expanding its services over the years to include traditional site-built homes, college dormitories and even military barracks and apartments.

In 2016, it was acquired by Berkshire Hathaway, and about that same time began expanding into a new style of housing that, in many ways, hailed back to its very first alternative products: tiny homes.

Downsizing into a smaller home isn’t new. Empty-nesters have been doing it for years, alongside younger adults who simply want a more manageable living space to start out or stay in.

Designer Jim Greer sits on the porch in front of the Low County tiny house model.

-- Photo Provided

When tiny homes appeared on the scene, Clayton once again divined the marketplace’s strong interest and wanted to get out in front. The company debuted the Low Country in 2017, its first tiny home model in what would become its Designer Series. The home was designed by noted architect Jeffrey Dungan, who also collaborated with Clayton on the Saltbox, a second option that was released later the same year.

So, what is a tiny house? Essentially, as the name would imply, miniature versions of larger homes. Many early versions were stripped down, hardly more than boxes on wheels.

The concept has evolved, and in the case of Clayton’s units, are built with traditional materials and outfitted with varying degrees of amenities.

The company’s Low Country design, with a starting price of $124,724, features one bedroom and one bathroom in 464 square feet. Price does not include delivery or installation.

Salt Box exterior

-- Photograph Provided

The Saltbox – one bedroom, one bathroom, 452 square feet – starts at $131,885. The company bills this model as a “perfect year-round permanent residence, vacation home, guest home or accessory dwelling unit,” and kits it out with French doors, name-brand appliances, custom countertops, high (more than 9 feet) bedroom ceilings, room for a six-person dining room table, an exterior covered porch, metal and wood trim, energy efficient amenities such as a tankless water heater and more, all in 452 square feet.

Tiny homes are eye-catching, and thus they have staked out a significant place in the cultural landscape. HGTV, never one to let a pop-culture housing phenomenon go unexplored, broadcasts “Tiny House Hunters.’’ Netflix has bowed with “Tiny House Nation.’’ And in the physical world, events such as the 2019 Tennessee Tiny Living Festival, put on by the United Tiny House Association, recently packed Nashville’s Nissan Stadium.

Salt Box living room

-- Photograph Provided

“The tiny home movement began a few years ago and it has been interesting to see how it has evolved,” says Jim Greer, national brand manager for Designer Cottages, a division of Clayton Homes. “The ideology is that bigger is not always better, and people want to enjoy and experience life in a different way. The last economic crash meant that people began to look at housing differently, and the millennials and Baby Boomers alike were looking at downsizing. It really grew out of many social factors.”

Early on, the idea of tiny houses ran up into the reality of practical factors such as zoning, placement, usability and other hurdles. Television shows piqued interest, but there weren’t a lot of consumer options for a home that people would actually want to spend time in vs. owning one as a novelty and keeping in their backyard.

So, when Clayton spun out its Designer Cottages offshoot, the impetus was as much on education and creating a new type of community as it was on selling a new style of home, Greer explains.

Low Country exterior

-- Photograph Provided

“There has been a lot of work to educate local planning and building officials, because they are interested in these homes, but aren’t sure how best to integrate them into their communities,” he notes.

The question of mobile vs. permanent loomed large, for instance. If a home is designed to be portable, that means one set of state and local codes must be adhered to. If it’s permanently affixed to a foundation, that’s another list of standards to meet. Clayton’s Designer Cottages are designed to be permanent, affixed property, which was done in part to help create communities of them, as well as allow for upgrades, Greer says.

“Even as people downsize, they don’t want to give up the things they like,” he explains. “You see higher-end residential homes with a lot of features and finishes? People want the same in their tiny home, and Jeffrey Dungan is really good at creating that blend of unlimited creativity in a small space.”

Clayton also was able to maximize its well-established manufacturing operation and supply chain efficiencies to ease its startup costs as it moved into new territory.

“We were able to re-fit our standard off-site home building method to build the smaller floor plans efficiently,” Greer points out. “Building inside a facility, savings are achieved by purchasing building material and upgrades in bulk, as well as leveraging innovative building practices, recycling, automation and leveraging economies of scale.

“Unlike traditional building methods, the off-site home building method does not suffer from weather damage or seasonal delays.”

Rolling out a new product is no small endeavor, but thus far it appears to have taken off.

Clayton adapted the traditional sales-center approach it had used for mobile homes since the 1960s to begin entering markets that were aligned with vacation and resort properties and destinations. A sales and experience center was created in the mountain retreat community of Cashiers, North Carolina, to show interested vacation-homebuyers what it would be like to live in a smaller space, while also demonstrating communal amenities such as pools or dog parks.

A residential development, Designer Cottages of Cashiers, was begun alongside the experiential space, so those taking a tour also could buy in on the spot. In an area where the median home price is around $650,000, the chance to own a house and land for around $260,000 made a second vacation home much more affordable and sales were brisk, Greer says. Whatever the case, the effort quickly got other developers’ attention.

“People are interested in a second home, but many don’t have the capability to purchase a large, expensive lakefront or mountain home,” says Chip Hayes, president of Oakstone Land & Capital, a turnkey vendor of Designer Cottages and developer of two (and counting) tiny-home communities in Middle Tennessee (see related story).

“Tiny Homes appeal to a wide range of homebuyers and based on the interest we’ve seen there is a large, and largely untapped, market for them.”

Greer concurs, noting that while tiny homes may be resonating with buyers in a way that may seem faddish now, they are likely to become more commonly accepted as part of the overall U.S. housing stock, Greer says.

“Every day, more people realize that choosing to live in homes with smart features and modest floor plans could answer their needs,” he says. “This is a trend we don’t anticipate going away anytime soon. Homes are no longer considered better simply because they are more expensive or larger than their neighbor’s.

“By utilizing the expertise of our designers and architects like Jeffrey Dungan, we can provide the latest trends for interior design and features for homebuyers.”

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