Why you should care
As millennials flee costly U.S. cities, suburbs are starting to embrace micro apartments that offer urban facilities for less.
A three-story building made of brick, glass and metal, Amber on 11 offers tiny but smartly designed lofts and studios that could fit right into a cramped, downtown metropolitan landscape. The studios have an area ranging from 280 to 363 square feet and come equipped with an electric stovetop, refrigerator, dishwasher, air conditioner and hardwood floors. But Royal Oak, Michigan — home to Amber on 11 — is no bustling urban hub: It’s a 58,000-strong Detroit suburb.
Crowded urban settings, from New York to Chicago to San Francisco, have over the past decade increasingly embraced micro apartments — typically with an area less than 400 square feet, often much smaller — as an important housing option. But now these small living spaces the size of a school bus are beginning to sprout up in sprawling suburbia. They’re potential lifesavers for small communities that are starting to see an influx of millennials after decades of population drain, when youth left for bigger cities.
The town of Bellevue, Washington, a suburb of Seattle, has helped fund 300-to-350-square-foot micro units at the Pacific Inn apartments, under the condition that 20 percent of the apartments are kept for people earning less than 60 percent of the area’s median income. In 2017, private developers — without government support — launched similar micro apartments in Redmond and Kirkland, two other suburbs of Seattle. Across the country in Providence, Rhode Island, in the Greater Boston area, developers in 2016 turned the nation’s oldest mall — the Westminster Arcade, which opened in 1828 — into a set of micro lofts, some of which are as small as 225 square feet. Demand for the Providence units is so high there’s a waiting list of thousands.
In Boston, global engineering and design firm Stantec is working with the mayor’s Housing Innovation Lab and architecture firms to build a micro house prototype — they’re calling it the UHU, short for Urban Housing Unit — that they hope to take to the city’s suburban outskirts. Boston Mayor Marty Walsh has backed the project. Amber on 11 started renting out its 36 micro apartments earlier this year, and its developers are also soon unveiling micro apartments in another Detroit suburb: Troy.
The micro apartments are [doing] a great job.
Ben Carson, U.S. secretary of housing and urban development
These micro apartments promise to help American suburbs that for several years have lost youth to cities, and at a rare moment in their demographic evolution. The population of young adults — 18 and 35 years old — grew by almost 7 percent in mature suburbs and by 8 percent in emerging suburbs between 2010 and 2015, compared to nearly 5 percent in urban hubs, according to census data analysis by the Brookings Institution.
“We’re very happy to work with the private sector [on supporting suburban micro apartments],” Dr. Ben Carson, the U.S. secretary of housing and urban development, tells OZY when asked in an interview about the Trump administration’s position on these tiny units. “The micro apartments are [doing] a great job.”
The lack of affordable housing and shortage of space have been two key drivers for the growth of micro housing in cities, and not just in the U.S. From Stockholm to Berlin and Mumbai to Hong Kong, micro housing projects are cropping up in big cities to cater to this demand. Globally, the micro housing industry is expected to grow by 7 percent between 2018 and 2022, according to Research and Markets, the database of industry research.
Within the U.S., 1 in 4 conventional renters told a survey by the Urban Land Institute in 2015 that they would be ready to shift to a micro apartment. In 2016, when the city of Boston unveiled a prototype of the UHU, 98 percent of the 2,000 people who visited the tiny home said they or someone they knew would benefit from the 385-square-foot apartment.
But affordability is only one part of what renters look for in micro apartments, the surveys show. Location is central: Millennials don’t want to have to worry about transportation, and furnished micro apartments are in greater demand than unfurnished ones. In the heart of a metropolitan city, though, that combination of demands is costly — even for a micro apartment, where rents in New York City typically exceed $2,000 a month.
That’s where micro apartments in well-connected suburbs, fitted with modern amenities — Amber on 11 makes it a point to describe its lofts and studios as “urban-style” — come in. These are available typically for around $850 to $1,000 in rent.
“When you think about how the … affordability crisis has spread to just about everywhere, it does make sense that this would be a viable alternative beyond urban cores,” says Aeron Hodges, architect at Stantec and co-founder of the housing research group What’s In.
For developers, too, this shift makes sense. With more and more brick-and-mortar stores shuttering under pressure from online retailers like Amazon, municipalities and private developers face a conundrum over what to do with dying suburban mall complexes. In Grandville, Michigan, a big-box store has been redeveloped into a place of worship, while what was the Highland Mall on the northern edge of Austin, Texas, has been turned into the campus of the local community college.
The demand for micro housing makes it particularly appealing for developers. The Urban Land Institute’s findings show that small housing units enjoy higher occupancy rates than bigger homes — while commanding 54 percent higher rents per square foot than apartments larger than 1,000 square feet. Jerry Amber, developer of Amber on 11, suggests micro apartments in suburbia challenge the status quo of suburbia. “It took courage by elected officials who understand the changing demographics we observed,” he says.
Micro apartments offer suburbs a chance to capture a young demographic that was otherwise lost — while also increasing population density, which leads to increased productivity. “Creating a higher population density in a small town can help create a stronger and more competitive downtown core,” says a recent report on suburban housing by the Federal Reserve Bank of St. Louis.
But micro apartments also have sparked a backlash in some cities — such as in San Francisco, where a tenants’ union has opposed plans to lower the minimum allowed size of apartments to 220 square feet, from 290 square feet at present. Critics argue that such units cater to young, often-single tech workers but don’t address America’s broader shortage of affordable housing for families, for whom micro-apartments are not a solution. Regulatory blocks remain the “gorilla in the room” for the growth of micro apartments, says Carson.
But other cities are concluding that these tiny apartments are their best bet to prevent the housing crisis from deepening. In 2017, Miami approved apartments smaller than 400 square feet. And for suburbs on the fence, there will soon be another incentive. Carson says the federal government is preparing a plan under which new municipalities seeking licenses will be given preference if they commit to reforming zoning laws to allow, among other things, smaller homes.
If that takes off, the American suburban dream might soon take on a whole new meaning.