Micro-housing: A hip urban trend or economic necessity?

Over the last several years, micro-apartments, or small housing units that average between 150-300 square feet, have been popping up in urban areas across the United States. As rent prices in desirable urban locations rise prohibitively, this innovative form of housing has also risen to meet the demands of city residents who want to live in the priciest of areas for a fraction of the cost. The only condition is that inhabitants must be content to have their closets hanging from the bedroom wall or the dining room table folded under the bed.

The model has been touted as a solution for many coastal urban areas with shortages of affordable living spaces, including New York, San Francisco, Washington D.C., and Seattle. But now the fad is catching on in less-populated metropolises such as De Moines, Iowa or Kalamazoo, Michigan. This latest development has left some spectators wondering whether the micro-housing movement is really gaining popularity because of a lack of affordable housing, or whether there are other perks, such as an ability to downsize and live a minimalist lifestyle, that are attracting a younger, more mobile population.

“Housing affordability issues are spreading, for sure, and housing costs are going up extending outside of big cities. But I think it is part of a broader demographic shift,” says John Infranca, Assistant Professor of Law at Suffolk University Law school, who has researched the emergence of micro-housing.  

“People are willing to forgo space because they are residents that are going to spend a lot of time outside their home; the city is their living room. And some of these places are morphing into communal living. There are new developments going up where they are emphasizing shared living and social areas,” he adds.

Culturally, young Americans are downsizing and sharing more, and this is allowing them to choose to live in smaller spaces. Instead of lining a wall with bookshelves, they keep books stored on an iPad or a kindle. Instead of filling a closet with heaps of clothes, they rent their wardrobe from the plethora of online rental companies proliferating across the Internet.

“The sharing economy is about making use of idle capacity, and moving to the micro housing is also making use of idle capacity. They see this as the next generation of the sharing economy. It’s how people are approaching ownership and use of goods,” says Mr. Infranca.

Aside from the increased affordability of living in a smaller dwelling, many of the people moving to micro housing have expressed an intentional wish to downsize.  

"I feel very happy when I'm in this space,” Gil Blattner, a micro-apartment resident in New York, told USA Today as the micro-housing option emerged in full force two years ago.

"The name of the game is being selective about what you hold onto. It's helped me stay away from being a hoarder."

Furthermore, these houses are touted as more environmentally friendly and more social, since people will interact more if they are forced to leave their apartments. Many of the buildings come equipped with communal kitchens, lounges, and balconies, and most are near urban amenities such as restaurants and cafes that residents couldn’t afford to live close to if they were renting a traditionally sized apartment.

But despite the potential lifestyle perks, others say that the spread of micro-housing has more to do with economics than an overt change of lifestyle among renters.

Jon Durham, a developer in Kalamazoo, told Bloomberg that his company began building micro-apartments so the city would have housing options recent college graduates could afford.

 "We need it for the stay factor for our city," he said, adding that the apartments have been in high demand.  

Two trends have contributed to the rise in popularity of micro-housing across the country, experts say. More people want to live in central urban locations, and more people are single and living alone. For these individuals, renting a normal-sized home is simply unaffordable in many cases.  

Census numbers demonstrate that the number of renters is growing, and the rental housing burden, defined as paying more than 35 percent of your monthly income on rent, is a problem in cities across the country, affecting roughly 2/5 of Americans.

“Though homeowners build equity when housing prices rise, renters face a much different reality: housing-price inflation directly affects renters’ ability to spend or save for the future. And unlike homeowners, renters see no return on their dollar,” notes the Urban Institute.

What renters, researchers, and urban developers have found, however, is that creating smaller living spaces reduces the cost of housing for renters while also being more profitable for developers. It could be a win-win situation, if it weren’t for the concerns about health risks and other stresses that some of these small spaces inspire.

“Home is supposed to be a safe haven, and a resident with a demanding job may feel trapped in a claustrophobic apartment at night—forced to choose between the physical crowding of furniture and belongings in his unit, and social crowding, caused by other residents, in the building’s common spaces,” speculates Jacoba Urist in the Atlantic.

Still, as the country continues to grapple with the issue of where to put its urban population, it’s probable that micro housing will continue to be a big hit.