Micro-lofts: Are these tiny units coming to the suburbs?
February 13, 2019
February 13, 2019
Micro-lofts have been a fast-growing trend in urban areas, but can they work well in the suburbs too? Our experts share their insights.
With human population on the rise, and along with it the price of housing, city planners have increasingly looked at micro-lofts as options for alternative living solutions to meet the changing demand of the market. A micro-loft is typically less than 350-square-feet with a fully-functioning kitchen and bathroom, although “micro” size is relative based on geography—a micro unit in Boston could be 250-square-feet while it could be twice that size in Colorado.
Developers and design professionals have implemented several creative solutions to meet compliance regulations and the needs of the end consumer. The micro-loft trend has been primarily in dense, urban areas, but is there a need for micro-lofts to expand to the suburbs? Meet our housing experts who will share their thoughts:
Aeron: The driving force for micro-loft popularity is affordability for renters. Millennials and young professionals don’t have high starting salaries but still want the experience and accessibility of living in a city. On the ownership side, we’ve seen micro-units renting almost immediately when the building opens. We know of a couple condos in Boston that had a waitlist within a week of going on the market.
Design is a big factor in micro-units since the square footage is so small. Our Boston team has done quite a bit of research since 2010 to continually improve our designs. We’ve looked at how to create a space for every function, opportunities to increase sustainability, the amount of daylight suitable for a small space, and we even worked with an MIT graduate program to review robotic technology options (such as beds that disappear into a closet or closets that open to create another room.)
There has also been an increase in public perception of micro-lofts over the years. In the past, we’ve seen projects with low neighborhood approval impact the feasibility of a project. Since then, our team has worked hard—especially in the Boston area—to improve the public’s understanding of micro units. Our team worked with the Housing Innovation Lab to develop a full-scale, traveling Urban Housing Unit mock-up that has been showcased in several neighborhoods. We also worked with the Housing Innovation Lab and the City of Boston to create a policy that has been approved by the City that allows for small units to be built outside of the Innovation District. We helped the City write the design guidelines.
Justin: In 2005, we noticed a change in demographics, with a strong presence of young professionals looking for apartments that were affordable to rent by themselves and offered all the amenities of their parents’ house. Early studio apartments averaged around 450-square-feet of living space. As prices of construction began to rise, the study of shrinking living spaces began, and the trend of micro living was piloted in the metro Detroit market.
Today, we are studying amenities and scale of the space—the question of amenities, (bike storage, offices, communal spaces) and whether providing amenities within the buildings affects the rentability of the building. Benchmarking efforts on several metro Detroit multifamily buildings promote inclusion of amenity spaces, however, there are new buildings that are focusing on the surrounding neighborhoods to serve as the amenities. With developments that focus solely on the apartment unit, and not inclusive of amenity spaces, we feel the developer relies on the geographic surroundings to fill the needs of the tenant. As we look for more sustainable solutions, these amenities need to be in walking distance to the apartment building.
The scale of a unit is still being tested to understand what the minimum area needs to be. There are a few buildings with micro apartments pushing the minimal area of 285 square feet. The buildings are too new to establish rent data. The key to scale of the space is directly tied to layout and scale of the furnishings.
Future benchmarking efforts will look at the rentability track record of the minimalist 285-square-foot units, and the importance of amenity spaces within the multifamily building.
Aeron: I think the urban vs. suburban debate for micro-lofts depends on transportation and amenity accessibility. In addition to the affordability, being close to public transit and urban amenities is a big selling point for micro-lofts in urban areas. In urban areas along the coasts, many people don’t have cars, while people in less dense suburbs in the Midwest rely heavily on having a car. I believe micro-lofts work well in any area, as long as there are reliable transportation options and at least a couple urban amenities—grocery store, restaurant—nearby.
We have heard hesitancy of developing micro-unit buildings, but we have the research to prove that these types of units sell, and they sell incredibly quickly.
Suburban micro units can also become a social hub for their rather scattered neighborhoods. There aren’t often places for people to hangout in the suburbs, and projects like Amber on 11, in a Detroit suburb, has the potential to bring people together.
Justin: Over the past decade, the market for apartment-unit design has been changing. Many apartment rental rates started requiring roommates to make apartment living affordable, and new perspective tenants require apartment units to provide all the standards of living (sleeping/living/kitchen/toiletries/laundry) in one space. The studio unit was developed to meet these needs, averaging 450-square-feet of living space. When we studied our clients’ unit types, the studios rented first.
My team researched the viability of the micro apartment unit—born in urban markets—in the suburbs. Our client in a suburb of Detroit who specializes in smaller apartment buildings, around 24 to 56 units typically, was looking for a small-scale site within a walkable distance to a downtown area, utilizing the city to deliver the amenities. We began studying unit layouts and building designs that worked with our client’s portfolio and allowed for us to challenge the new unit requirements. Our design for Amber on 11 included micro studio units that ranged from 285 to 360 square feet.
Our focus demographic also started to evolve, looking at millennials, young professionals, traveling corporate executives, and snowbirds. This building also meets the municipality’s initiative to fill the “missing middle” of housing, working with their slogan of “Age in Place.” The units are rentable only to a single occupant and provide one parking spot per unit. Amber on 11, a 36-unit, three-story building, opened in early 2019.
Building upon the excitement of Amber on 11, our client had the opportunity to purchase a property in another suburb of Detroit, in an area that needed a catalyst to develop the district. The area had traditional forms of housing stock—apartments, condominiums, and single-family homes—but greatly lacked a new housing stock for apartments that catered to single occupants. Working with the municipality, we developed units that would deliver studios, but meet the larger scale living area footprints of the surrounding apartments. This design worked to develop the new district and help municipalities’ initiative to diversify housing. Amber Studios and Lofts, a 35-unit, three-story building opens in 2019. Units vary in size, from 355 to 665 square feet.
Justin: The benefit of a micro-unit, multifamily facility in a suburban area is new construction that provides the inhabitant with an environment that is economically affordable, in a space that meets their needs.
For developers, although the cost per square foot may be more to construct a compact multifamily facility in respect to building with larger rentable spaces, the niche of renters looking for micro-units are typically willing to pay higher rental rates for the typical short-term lease agreements. Also, as municipalities begin looking at adjusting their zoning requirements to allow decreased parking requirements per unit, developers are spending less of their upfront capital on parking lots and detention areas.
Aeron: There’s a stronger need for this typology, and we encourage developers to think about the demand and success stories. If you look at market reports, there is a supply and demand gap for this type of unit. This is due to a surging millennial population who are looking for mostly single or double occupancy, as many millennials are having children later in life, combined with the issue of not being able to afford the largely overstocked two-bedroom options in urban cores. We have heard hesitancy of developing micro-unit buildings, but we have the research to prove that these types of units sell, and they sell incredibly quickly.