Cities try to lure young professionals with 'micro'-units

Officials in many of the nation's most expensive housing markets have embraced 'micro-apartments.'

By MSN Real Estate partner Dec 27, 2013 8:19AM

CorbisBy Kris Hudson, The Wall Street Journal

 

In recent years, officials in many of the nation's most expensive housing markets have embraced "micro-apartments" as a way to provide less-expensive housing for young renters.

 

They are betting that the tiny apartments — generally the size of a hotel room for about half the rent of a full-size apartment — will attract young professionals and recent college graduates, helping to revitalize city centers.

 

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Micro-apartments are about 300 square feet or smaller, though some developers and cities define them as large as 500 square feet. They sometimes lack a separate kitchen or bedroom.

Developers believe that single people in their 20s and 30s will accept less space in exchange for lower rent, even in cities where rent levels aren't especially lofty. Nationwide, rents have soared as the supply of apartments hasn't kept pace with demand.

 

Census figures show that single-person households made up almost 27.8 percent of all U.S. households in 2012, up from 25.8 percent in 2000. While the elderly account for some of the growth, economists and demographers also attribute it to Generation Y, the roughly 80 million Americans 18 to 34 years old.

"This is not a short-term phenomenon," said John Infranca, an assistant law professor at Suffolk University in Boston who specializes in land-use law and has studied micro-apartment projects in several cities. "There is going to be demand for this housing going forward. The [trend] of an increasing number of singles in cities is staying steady across the country."

 

In Cleveland's University Circle district, an employment and cultural hub five miles east of downtown, developer Coral Co. plans to start construction next year on 50 micro-apartments as part of a large, mixed-use project. The 300-square-foot units will rent for $600 a month, compared to the area's typical range of $800 to $1,500 for one-bedroom apartments. Target renters are graduate students and medical residents, including those at the nearby Cleveland Clinic.

 

In downtown Providence, R.I., the 185-year-old Arcade retail building was converted this year to 48 micro-apartments. In Worcester, Mass., a newly built complex of 55 micro-apartments has leased more than two-thirds of its units, including to students at the Massachusetts College of Pharmacy and Health Sciences.

"We're trying to encourage more residential development downtown for college students and professionals," said Paul D. Morano Jr., director of business assistance for Worcester, a city of 181,000 people.

 

Micro-apartments started gaining popularity decades ago in large cities coping with rising rents, including New York, Seattle and Washington, D.C. The complexes often have communal spaces such as large lobbies and restaurants where tenants can socialize. Developers reason that many young tenants would prefer communal space to personal space and would rather spend money socializing than on rent.

 

A national tally of micro-apartments couldn't be found. But real estate data provider CoStar Group Inc. counts 26 micro-apartment projects totaling 2,000 units built or under development since 2011 in six of the nation's most expensive markets: San Francisco, Washington, Los Angeles, Boston, New York and Seattle.

Some real estate executives aren't sure that micro-apartments would work in smaller or less-expensive cities because rents aren't sufficiently high to induce enough renters to give up space. "In smaller markets, the rent differential is such that, if you have a good job, you can typically afford the rent of a … full-size apartment," said Jeffrey I. Friedman, chief executive of Associated Estates Realty Corp., which owns 14,000 apartments averaging 975 square feet in 10 Midwestern and East Coast states.

 

Another potential problem for smaller cities is that they don't always have the mass transit, night life and cultural facilities to lure younger workers to live downtown.

"You can't just drop these [micro-apartments] in communities that don't have the amenities to serve that kind of lifestyle," said Kelly Saito, president of Gerding Edlen, the developer of the first of Boston's new wave of micro-apartments.

Developer Evan Granoff, who owns the Arcade in Providence, has found that some renters are commuters using the units as second homes.

"They're people who have a 45-minute to one-hour commute to work and want to have a place downtown," Granoff says. "It's people looking for party crash pads. The rents are pretty reasonable, so it's an attractive alternative to staying in a hotel."

 

Scott Christensen, a 51-year-old information-technology director, frequently commutes between Chicago, where his wife and three children live, and Providence, where he works at a law firm. He plans to move this month into one of the 225-square-foot apartments that Granoff is offering starting at $550 a month.

"I'm kind of the perfect tenant," Christensen said. "I won't be in the micro-unit all of the time because I travel. While I'll cook some, I'll be in the restaurants downtown constantly."

 

In March, 25-year-old entrepreneur Ross Chanowski moved into a 464-square-foot apartment in Boston. The unit is large enough for his queen bed, a short couch, a flat-screen TV and a table that doubles as a desk.

 

"What you don't get in space … you get in the co-living space in the lobby" or on the rooftop patio, Chanowski said. "If you're the type who likes to be in your apartment all the time, this probably isn't the lifestyle for you."

 

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70Comments
Jan 8, 2014 8:55AM
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They do this without adding any parking. It is completely ruining my neighborhood in Seattle.  
Dec 29, 2013 3:40PM
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Hey, the Japanese ARE sleeping in drawers now... just keep voting democratic, and see where that leads you...
Dec 28, 2013 6:04AM
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Maybe, next, they will just let you sleep at your desk. The "American Dream" has come a long way from a little house with a white picket fence. You get claustrophobic in your shoebox so you hang around the lobby, errrrrrrrrrrrrr "co-living space" ????
Dec 27, 2013 2:12PM
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Gayslinger, why are you deleting posts and hiding again like a scared little girl?
Dec 27, 2013 1:28PM
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Cities want to squeeze as many people as possible into a very limited amount of real estate because they want (and need) the local income tax revenue from an active labor force.  Businesses want to cram people into the same limited amount of space so that they have a flow of cheap labor to further their own financial interests.  And, people who are hungry for job opportunities in a city area will rent these mouse sized spaces because that's what they can afford due to the outrageous price of real estate in the city confines.  A horrible way to live, but people who rent these units have few or no alternatives for larger accommodations due to the high cost of city living.   
Dec 27, 2013 1:17PM
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Wow, I live near one of those areas and I can find you an apartment in the neighborhood that's 3 times the size for the same amount of money.
Dec 27, 2013 12:57PM
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Just another example of the downgrading of the american dream. If the corporations have their way in 20 years we will need to rent from company apt, shop at company store with company currency and if we whine will get visit from the corporate goons. Yeah Corporate States of America!!
Dec 27, 2013 12:28PM
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the only thing is it does not work retailers.. how do you buy more stuff if you have no place to put it? good luck putting up a 52inch tv.. well unless living in mounds of stuff is now cool.. kinda disgusting actually to dine by your dirty underwear.. or use the bathroom when anyone is in the apartment.. they are not homes they are cages..
Dec 27, 2013 12:12PM
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I'd rather live in a van down by the river.
Dec 27, 2013 12:00PM
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As was said previously, this is really nothing new since studio apartments and efficiencies have been around for a long time.


Unless you have a family, there's nothing wrong with living in a space that's 300 to 500 square feet. Utilities are more manageable, rent is more reasonable, and you may not be as inclined to buy a bunch of useless items and more furniture just to fill up your 2000 plus square feet.


It looks like some people are finally getting back to the basics since our ancestors raised large families in tiny log cabins or small huts made of sod. They'd be in awe at all the conveniences and comfort that are in the micro apartments being offered. They're neat, compact, and often wisely furnished where no space goes to waste.

Dec 27, 2013 11:01AM
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Most cities are looking for a way to put more people within city limits, this means taller buildings, smaller units or both. While this allows more people to live closer to work and friends or amenities, it does potentially offer an overcrowding problem. I'm sure that some New Yorkers are fine with a tiny place if that eliminates their 1 hour train ride, but I don't know that there will be much of a demand for these outside of New York City.


As the article suggests, what these will become are second homes. I've had to live out of a long-term hotel for over a year because I couldn't find a place where my job was at that would allow me temporary living at a reasonable rate. These units will be filled with people who are in similar situations.


Most cities have minimum sized apartments for a reason. Before building codes were enacted, people were stacked on top of one another in these tiny spaces and anyone at the CDC will tell you that overcrowding is a breeding ground for all types of diseases. I hope that they will not relax their codes much in order to allow these units - which as Jeremy 12341 stated, are really studios, although very small studios.

Dec 27, 2013 10:58AM
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It will work very well for anyone not wanting to be in their apartment all of the time. The community areas will provide the need to spread out.


I have a 35' motor home that my four kids and I use regularly. We spend entire summers in only 300 sq ft of space. We grill out, eat out, do our laundry at a laundry mat. Sit at the table to play games, eat dinner, play on the computer, etc. The motor home seats 9, has sleeping for up to 7 adults & 2 children. Although, I wouldn't want that many people in there, one adult and 4 teenagers have more than enough room to get around.


I have a refrigerator, an oven, a microwave in the kitchen. A full bathroom with shower. A king bed, a queen bed, a set of bunk beds, a table that makes a bed and a sofa that converts to a bed. Yes, you cannot be a hoarder or even a collector. But, if you need a place to sleep, eat and shower, 300 sq ft is more than enough for one or two people.

Dec 27, 2013 10:56AM
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Nope I rent a whole house for $750 a month in a nice neighborhood...this is not a deal.
Dec 27, 2013 10:48AM
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this is like Japan ----the family lives in a tiny place they have 2 kids and can not afford to move the husband goes to work at 6 am and to show his boss how good he is he stays until 6 then goes out with the boss for drinks--then the husband staggers home drunk---sexs the wife who does not want to sex a drunk---gets off her goes to sleep and then he is back for another round the next day----this is what this crappy micro units do----in Vancouver Canada they are so small and so expensive the students go to tim nortons or star bucks plug in the computer and that is their second home-----rotton future  frank
Dec 27, 2013 10:19AM
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Studio apartements aren't new. The marketing of them as "micro" units is putting lipstick on a pig.

 

And the price they stick at 600 is stupid. 1 bedroom apartments can cost about that price. Studio apartments tend to cost at the upper upper end 600. But usually 300-400.

 

I just hope future generations don't expect to raise kids in studio apartments.

Wow, here we come swapping our life style for that of the developing world.

Dec 27, 2013 10:18AM
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I wish they had more of these in NYC as a Pied de terre.
Dec 27, 2013 10:12AM
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This trend is dumb, it's like living in college again.  Either get a roommate and a larger apartment or move back in with your parents.   It's homier.


Dec 27, 2013 9:53AM
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Actually, what is REALLY going to happen is, irresponsible people who have zero regard or respect for other peoples property will trash these places like they did the projects in Philly and other cities. They'll soon become a ghetto like the rest of urban America. They'll become infested with rats and cockroaches and deemed unfit. It's all part of "urban planning" where government doesn't want people to have land, spread out, and breath. They want top limit land development so they can seize more for themselves and force everyone else to live like two mice in a tennis ball.
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