While tiny apartments are typically found in high rent areas, such as San Francisco and Boston, multifamily housing developers in other areas are starting to build these units. Are micro apartments just a passing trend or the future of multifamily housing?
With average monthly rent for a one-bedroom apartment averaging $3002.00 in San Francisco, it is no wonder young single professionals are looking for a lower cost alternative for housing. The solution many single people under 30 are opting for is the micro apartment, defined by the Urban Land Institute as an apartment with 400 square feet or less of living space. In San Francisco, some micro dwellings are listed at about half the price of a conventional apartment, thus spurring demand for these units. What is the appeal of micro apartments to the owners of multifamily properties?
The ROI of Micro Dwellings
Multifamily developers and property managers are discovering that although the construction and management costs of micro apartments tend to be higher than conventional units do, the higher rent per square foot these units command offsets the additional expense. As investors look to optimize their ROI, micro apartments are now coming to market across the country. How are tiny apartments fairing in the market place.
Current Market Trends for Micro Apartments
A recent report published by the Urban Land Institute provides a snapshot some of the forces driving the upsurge in construction of micro units across the country. Some of the trends discussed in this extensive report include:
- • Micro apartments tend to be offered in high-density multifamily housing towers located in the urban core of cities near public transportation, trendy restaurants and attractions, and highly desirable neighborhoods.
• The demographic most likely to rent a micro apartment is a single professional male ranging in age from 27 to 30.
• A survey of tenants in micro dwellings commissioned by the Urban Land Institute found 73 percent opted to rent a tiny apartment because of the rent was lower than conventional apartment options. The second reason cited for choosing micro units was the location of the development.
• When compared to mid-sized units ranging from 600 to 1,000 square feet in the Northeast, micro apartments tend to have higher occupancy rate (91.3 percent) than larger apartments (89.6 percent). The difference in occupancy rates is not evident in the South or Mid-West.
Design Considerations for Micro Apartments
Architects who design tiny apartments not only face the challenge of creating functional and appealing space, but they also need to ensure the space meets the accessibility standards established by the Fair Housing Amendment. Some of the design elements commonly found in micro apartments include the following:
- • High ceilings to create the feeling of more space
• Flexible and multi-purpose furniture, such as Murphy beds and pieces with hidden storage
• Oversized windows
• Gadget walls
• Moveable kitchen islands
• Over the stove built in microwave/convection ovens
• Amenities outside the unit but within the building that act as gathering places
One of the design elements not readily evident to tenants but in demand by property owners is the ability to convert micro apartments into larger conventional one apartment units. This is one indication that architects, developers, and owners of multifamily housing projects are not yet convinced that the demand for micro apartments will last.