Tiny Living on City Living Penthouse?

@Chaubin_806 You make a very interesting point. I can see the ways in which this would have some fun and exciting potential. I would guess the bottom line is...

Yes, a Penthouse is considered a house, to my understanding, not an apartment. But... it's a house with no 'yard'. Even if you were to place grass tiles on part of it, they would still be tiles. It would be 'fake' ground. You cannot plant on. The entire space is home. 
But... The Old Salt House (in San Myshuno) is a home that is not a penthouse. If you bulldoze it you can use it like a tiny home/lot.  (Note: make sure you bulldoze - which on that lot will also bulldoze cement and grass tiles. Alternately you could delete the home plus sledgehammer the cement and grass there currently, as the grass showing by default is tile, not grass. There is grass under the whole lot.)

That makes a great deal of sense, though its strange to see the option available for a location it does not work in. Given that dormitories can be built on regular AND penthouse style lots for Discover University, and that the option was made available, it seems like a simple change in definition. But I could see it either way.

@Chaubin_806  It seems to me that all lot types are in the drop down of all buildable lots in all towns. Perhaps your post will be considered as feedback on making an adjustment to lot types. Thank you! 🤞🏻💡