There’s a lot about micro apartments that makes sense.

In many major cities, along with high costs of living, there is an extreme shortage of affordable housing. So, enter micro apartments. A JLL report says that they typically average between 300 and 400 square feet, or the size of a “one-car garage.” 

Though, having an apartment “the size of a closet” has always been used to describe dwellings in Manhattan, where multifamily is built that way due to the borough’s unparalleled population density in the United States, these developments are now going up in other cities.

JLL executives argue that these spaces are suitable in other locales where there is limited room to build, paired with a housing shortage, if they are in walkable neighborhoods with amenities and efficient public-transportation access. And reportedly, due to technology shrinking appliances and the preference of many young people to live in urban areas, the smaller space is preferred by many.

Developers across the country are certainly influenced by that message.

In Minneapolis there is a project underway with 54 units being built by a joint venture. Rents will reportedly total in the low $1,000’s. A Denver development in the city’s Cherry Creek area will have units ranging from 300 to 800 square feet. Nook East Village is a recently completed micro-apartment development in San Diego, one of a handful proposed similar projects in that city.

Though we have certainly seen a proliferation of micro apartments nationally, it doesn’t mean that every municipality is fully on board with these asset types.

In Kansas City, Mo., a group of residents protested a plan to build micro units as a solution for the relatively inexpensive city’s increasing affordable-housing challenge. The Santa Monica, Calif., city council has placed an all-out ban on micro apartments unless they are affordable housing or for shelters, due to a proposed WS Development project, where it wants more families living.

And that is one of the problems facing the micro-apartment issue. The developments are being designed for a very particular type of tenant, young professionals who desire an urban lifestyle. Only families who have unlimited patience and bountiful resourcefulness will be able to make a 400-square-foot living situation work.

Opponents of micro apartments claim that developers build them to make up for an affordable-housing requirement in a space not practicle for families. 

There is surely a place for micro apartments in part of several cities, but developers might want to keep in mind that if those areas don’t have many other living-space options, the could be some potential push back from communities seeking affordable-living solutions.

About GRS Group

GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.

Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance.  We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.