McMansions, move over: the era of the micro apartment is here.
Micro apartments (we’ll call them ‘micros’, in the spirit of all things truncated) are 200-350 square foot studio apartments creatively constructed to make the most of every square foot. Instead of huge master suites, micros feature space-conserving features like staircases that double as dressers, pull-out closets and hydraulic coffee/dinner tables.
Micros include private bathrooms and basic amenities for a simple living space. Kitchens and meeting areas (with obligatory Wi-Fi) are communal, and perch atop coffee shops, restaurants or retail stores.
As you’d expect, micros are finding footing in urban centers like San Francisco, Boston, New York and Seattle, where land is limited, zoning restricted and rents are at a premium. San Francisco tested 375 220-square-foot units on the market at $1,600 rent per month (the average monthly rent for one-bedroom apartments is hovering around $2,700) and saw them gobbled up rapidly. More buildings made up of these micro units are now being constructed, filling young professionals’ demand for cheap, well-located housing.
Micros remain sparse in Los Angeles – which is unsurprising, considering its reputation for sprawl. Thus far, only Santa Monica has gotten the micro fever – it approved multiple micro developments in exchange for reduced rent for low-income tenants.
first tuesday insight
Commutes are out, community living is in. The demand for micro apartments reveals the proximity appetites of tomorrow’s first-time homebuyers. They’d rather be close to amenities and employment, than commute two hours every day just to have a big house in the ‘burbs.
Over time, this preference is going to forge a strong appetite for city living. Just as Boomers who were spoon-fed on the idea of owning a home with a white picket fence return over and over to homeownership, Gen Y is developing a taste for central location and renting.
The desire for mixed-use housing is realized in these building projects, creating cheap, comfortable housing arrangements centered in bustling areas and emphasizing community living. City workers have quickly scooped up the small selection of micro apartments – signaling buyers are hungry for exactly this type of living arrangement.
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When Gen Y begins to form their own households, their acquired taste for city living is going to increase demand for housing in the cities – as we’ve been saying all along. We need high-density, mixed use with 15-story height zoning for actual residences for the urban family of the future.
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The rezoning of one-time suburban, now urban, areas needs to be stepped up to foster this growing demand for mixed-use neighborhoods. Micros won’t be able to house whole families, but Gen Y’s housing preferences will carry over from renting to owning. Expect redevelopment and rezoning to high density and high occupancy housing in older one-story intercity areas, struggling to regain a foothold in the market.
This is good news, as smaller units mean more units and more to rent and sell. Take buyers to mixed-use areas and accentuate the location and closeness to services without a drive. Buyers are gravitating towards this type of housing and steering them straight to it means quicker sales and happier clients.
Agents who fail to grasp this significant shift are likely to find themselves battling for sales in the suburbs with an increasingly less affluent buyer population.
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