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The Rise of Micro Units in the Rental Housing Landscape

the-rise-of-micro-units-in-rental-housing-landscapeAs I happily binge watched back to back episodes of Tiny House, Big Living over the holidays, I realized just how much every trend has a corresponding backlash that follows it.

In this case, owning a large luxury home or a breathtaking penthouse suite was the ultimate goal for a while, as a large majority of our society coveted the celebrity lifestyle that is continuously promoted in every media channel. But many of us are waking up to the fact that living like a Kardashian brings some undesirable challenges and stressors with it, that often prevent people from truly enjoying life.

Paying for all of that space and luxury means that people have to work longer and harder while sacrificing social and family interaction — and they may not have the time or money left over to do the things they love, like travelling, developing hobbies and taking in the local entertainment. The resulting backlash is that we have seen a reduction in consumerism characterized by downsizing living spaces, minimizing clutter and maximizing the enjoyment of life.

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The rental housing and condominium sectors are responding to this trend by developing units that offer smaller spaces with lower price tags. But these are nothing like those tiny stereotypical New York City apartments that are used for comedic effect in movies and TV shows. Today’s developers are getting very creative with their new projects, incorporating features that make small spaces highly functional and comfortable, while providing desirable amenities such as on-premise gyms, rooftop terraces, premium fixtures and appliances, smart storage features and large windows for openness and natural light to name a few.

Not only do smaller price tags on dwellings mean greater financial freedom for residents, but smaller unit sizes also translate to more people being able to live in urban centers, bringing them closer to where they work and play. The result is shorter commute times and fewer vehicles on the road — which is beneficial to the well being of both people and the environment.

Are micro units a viable trend in the rental housing industry?

In 2015 The Urban Land Institute published a study entitled “The Macro View on Micro Units”.

The study includes answers to the following questions:

• How have smaller and micro-unit rental apartments performed in the marketplace compared with larger, more conventional apartments?

• Does the higher per square foot rent justify the higher construction cost?

• What are some of the examples across the country where micro units have been successfully developed and operated?

• What are the critical success factors and lessons learned from developers, owners, operators, and design professionals that have experience with this new breed of micro-unit community?

• What has been the experience of residents who have actually lived in one of these tiny apartments, what do they like and dislike, and what motivated them to consider a micro unit in the first place?

• What would motivate potential renters of conventional apartments to live in a smaller unit?

• Based on a compilation of all of the above, what is the likely future for micro units; is this a passing fad or a growing trend?

Read the full study{{cta(‘c12133db-01ae-4feb-bca3-ff6540142ac7′,’justifyright’)}}

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