America Needs Small Apartment Buildings. Nobody Builds Them

[mhays]

They should go to those places. And also to the fringes of urban districts where they're already going in our case...places often zoned 45' with a lot of small lots.

[Pedestrian]

Originally Posted by JManc

apart from New York, American and Canadian cities just don't have the population densities to warrant people to scale down their housing expectations like other major global cities and development is reflecting that . . . .

Builders Bet Tiny Apartments Will Lure Renters
By Laura Kusisto
April 15, 2017 7:00 a.m. ET

. . . A Pittsburgh developer is betting that more 20-somethings will pay more than $1,500 a month for the tiny studios in its new building, called Ollie at Baumhaus, even though space is so tight the beds double as couches.

It is a big risk in a city where the average apartment rents for a modest $979 a month, compared with nearly $3,400 in the New York metropolitan area and more than $2,800 in San Francisco, according to data provider Reis Inc.

The seven-story, 127-unit Ollie at Baumhaus building in Pittsburgh is set to open in June.

A trend that started in pricey coastal cities as a response to rising rents is spreading to smaller cities that often have an abundance of relatively inexpensive housing options. In Milwaukee, Cleveland, Detroit, and Kansas City, Mo., developers are betting on demand from young people to live in tiny quarters even when cost isn’t the primary consideration.

Micro apartments generally come fully furnished with amenities such as wireless internet and in some cases maid service, at a price similar to those of larger traditional apartments . . . .

https://www.wsj.com/articles/builder...ers-1492254007

[JManc]

That article also states a few times that these types of apartments are risky in smaller/ less dense/ cheaper cities. Though I could see this working in Pittsburgh easily.

[mhays]

Maybe, but they work in numerous cities. You're getting pushback because you said it only worked in NY, which was incorrect x1000.

[Pedestrian]

i think micro units are somewhat fringey everywhere outside Japan and maybe a few other spots in hypercrowded Asian cities. But they aren't limited to New York and developers are obviously on the prowl for niches for them in a variety of places. America may be less fertile territory for them than many places simply because we have lower land costs and lower overall housing costs in many markets than other spots in developed countries, but they aren't an unknown option to us and we will see more of them in more places over time.

In a way, they are another branch of a tree that has branches that include single room occupancy hotels that have been fixtures of large American cities for a century and, more recently, privately developed student housing (several REITs specialize in this and similar housing for recent grads wouldn't be much of a stretch for them).

[eschaton]

I knew about that building in Pittsburgh, but didn't know it was going to be micros. Honestly it's probably not the most ideal location for microapartments. It's walkable, but not incredibly so. There's a coffeeshop and an ALDI right across the street, another grocery store, a Rite Aid, and around a half dozen restaurants (mostly fast food/fast casual) within a two block radius. But it's more like a 10-15 minute walk to the closest true walkable business districts from there. Also, the street's not particularly pedestrian friendly.

I mean, I think they'd have no issue with renting the micros at all. But I think micros fare better if you can literally walk out your front door to shopping and nightlife. When you live in a small unit, the neighborhood effectively becomes one of your "rooms."

[JManc]

Originally Posted by mhays

Maybe, but they work in numerous cities. You're getting pushback because you said it only worked in NY, which was incorrect x1000.

This is what I said: apart from New York, American and Canadian cities just don't have the population densities to warrant people to scale down their housing expectations like other major global cities and development is reflecting that . . . .

People in Pittsburgh, Milwaukee, Cleveland, Detroit, and KCMO do not have to scale down their housing expectations in order to live in these cities. They choose to live in these micro-apartments out of a desire to downsize their footprint, live a particular location or whatever. Developers are taking a gamble on these types of apartments.

[Leo the Dog]

$1571-$1748/mo for 380sf, for a millennial to live solo, in Pittsburgh, a region that continues to lose population...that is steep.

[Pedestrian]

Yet another pair of micro-units in SF:

Exclusive: Two Tenderloin housing projects for S.F.'s "missing middle" to break ground
Apr 5, 2017, 2:35pm PDT Updated Apr 6, 2017, 9:49am PDT

Roland Li
Reporter, San Francisco Business Times

Two Tenderloin housing projects will start construction this year in an effort to boost San Francisco's "missing middle" housing supply.

The projects totaling 231 units by developer Forge Land Co. at 145 Leavenworth St. and 361 Turk St. are using pre-fabricated steel, which will bring construction costs down.

Units will also be small, ranging from 250 square feet to 440 square feet. That enables Forge to target rents just over $2,000 per month on average, less than typical new projects, which rent for $3,000 or more per apartment.

"It's really designed for the bulk of the workforce," said Richard Hannum, CEO of Forge Land Co.

He said market-rate rents would be affordable – defined as being no more than 30 percent of salary – for people making up to $80,000 per year (), slightly above San Francisco's average wage. Rents haven't been finalized yet . . . .

Twelve percent of Forge Land Co.'s units will also reserved for those up to 40 percent of area median income under the city's inclusionary housing requirements. The city didn't initially require "group housing" projects with small units to include affordable housing but changed its policy in 2015.

CollinsWoerman is the architect of the projects . . . .

The pre-fabricated steel will be assembled in California's Central Valley. "This is all being made in the U.S. We will fabricate all the parts in the Central Valley. We don't need to go to the remote countries elsewhere," said Hannum . . . .

http://www.bizjournals.com/sanfranci...le-prefab.html

A word about the location: SF's Tenderloin doesn't, IMHO, deserve quite the reputation it has as a seedy, crime and drug-infested place. It has more than its share of both, most of which becomes a problem mainly after dark--one can, and I do, walk through the "loin" in daylight quite safely--but it also is the locus of a thriving south and southeast Asian community (along with their restaurants which are numerous in the neighborhood) and, for hipsters, some of the last great dive bars in what used to be a city full of them. North of Geary Blvd (these new apartments will be south of Geary) it quickly transitions into what real estate folks prefer to call "Baja Nob Hill" meaning you are getting up the slope of the hill toward the distinctly upscale top and therefore the vibe and housing are suitable for the slightly impecunious but upwardly mobile--this section has a Trader Joe's (and even a Whole Foods nearby) which proves it is an acceptable address. This area, indeed the entire T-loin, has a bonanza of 1920s/30s/40s vintage apartment buildings of which Dashiell Hammett would be proud.

Finally, IMHO large swaths of the Tenderloin look like they belong somewhere in Manhattan. They are densely urban and bustling and slightly gritty, but terribly interesting.

[mhays]

Originally Posted by JManc

This is what I said: apart from New York, American and Canadian cities just don't have the population densities to warrant people to scale down their housing expectations like other major global cities and development is reflecting that . . . .

People in Pittsburgh, Milwaukee, Cleveland, Detroit, and KCMO do not have to scale down their housing expectations in order to live in these cities. They choose to live in these micro-apartments out of a desire to downsize their footprint, live a particular location or whatever. Developers are taking a gamble on these types of apartments.

There are many cities in the gap between NY and those cities. Most aren't as expensive as NY (a couple are) but it's very common to scale down for affordability nevertheless.

Further, people do in fact scale their housing expectations to price in every city. Even in a relatively cheap city, some people want to pay less, or they're willing to trade square footage for location and newness.

As for that San Francisco example, what a stupid metric for affordability. Residents of those buildings generally won't have cars (typical in all of the big urban cities). So spending no more than 30% on housing is an anachronism. It's better to make sure the two combined are below a given percentage like maybe 50%, which would be 95% rent for these people. SF is full of people earning $60,000 who would kill to find a $2,000 micro.

[Pedestrian]

Originally Posted by mhays

SF is full of people earning $60,000 who would kill to find a $2,000 micro.

I don't know. If they haven't found one or haven't lived in a rent-controlled unit for 30 years, they probably commute from Daly City or Hayward (or live in a one-bedroom with 3 roommates).

[mhays]

Originally Posted by Pedestrian

I don't know. If they haven't found one or haven't lived in a rent-controlled unit for 30 years, they probably commute from Daly City or Hayward (or live in a one-bedroom with 3 roommates).

....That's why they'd kill for one.

[JManc]

Originally Posted by mhays

There are many cities in the gap between NY and those cities. Most aren't as expensive as NY (a couple are) but it's very common to scale down for affordability nevertheless.

Further, people do in fact scale their housing expectations to price in every city. Even in a relatively cheap city, some people want to pay less, or they're willing to trade square footage for location and newness.

Agreed but it's all down to choice rather than necessity. People are choosing to live in trendy/ more walk-able areas and are wiling to pay a little more and sacrifice space. Even here in Houston where it's still fairly affordable even inside the Loop, people are paying quite a bit more for less to live downtown or other more desirable neighborhoods.

As for that San Francisco example, what a stupid metric for affordability. Residents of those buildings generally won't have cars (typical in all of the big urban cities). So spending no more than 30% on housing is an anachronism. It's better to make sure the two combined are below a given percentage like maybe 50%, which would be 95% rent for these people. SF is full of people earning $60,000 who would kill to find a $2,000 micro.

A lot of places won't even lease to you if the rent is more than 1/3 your salary. That's means someone making $60,000 would not be accepted for a $2,000/ mo apartment.

[ChargerCarl]

Those micro units are great and we desperately need more of them, but I'm not sure they're what I would consider "missing middle housing." They're large apartment buildings.

It's the 3 story walk up that used to be built en masse in SF that really needs to see a comeback.

[memph]

Originally Posted by ChargerCarl

Those micro units are great and we desperately need more of them, but I'm not sure they're what I would consider "missing middle housing." They're large apartment buildings.

It's the 3 story walk up that used to be built en masse in SF that really needs to see a comeback.

I'm not sure how much sense they make in SF proper though. More like the other lower density Bay Area communities (maybe in Sunset and other lower density SF neighbourhoods?). Although 4-6 storey apartment buildings with 10-30 units could still make sense in SF and those are still different from 100+ unit buildings. Generally speaking though I'd say you want a 3x increase in floor space if you're demolishing what was there before.

[ChargerCarl]

Originally Posted by memph

I'm not sure how much sense they make in SF proper though. More like the other lower density Bay Area communities (maybe in Sunset and other lower density SF neighbourhoods?). Although 4-6 storey apartment buildings with 10-30 units could still make sense in SF and those are still different from 100+ unit buildings. Generally speaking though I'd say you want a 3x increase in floor space if you're demolishing what was there before.

Yeah obviously SF city proper has already surpassed that level of density, the real killer is that SF is surrounded by suburbs of mostly SFR only neighborhoods. These are the places where small apartment buildings should be being built.

[Jonesy55]

There will always be some people willing to pay a lot more more for a lot less housing space in prime locations (single people and childless couples mostly), but there has to be a big upside for them to do that, like having a big range of amenities and jobs right on the doorstep and being able to live without car expenses and not being inconvenienced by that. If a downtown type area can offer that then there will be a market for such micro-apartments, if the local offerings are not so good then there's no real reason to sacrifice the space I guess...

[pdxtex]

Originally Posted by Pedestrian

https://www.wsj.com/articles/builder...ers-1492254007

theres no way in hell id pay 1500 for this in Pittsburgh?? thats cuckoo. id consider purchasing it though. its not the size, its that rent. you can rent new 1 bedrooms in Portland for that much. maybe the developer should shoot for 1000 and see how it goes..

[mhays]

Some people are willing to do whatever is necessary to avoid commuting and not have a car...like me. In some ways NOT having good transit would encourage this kind of proximity choice.

[Pedestrian]

Originally Posted by memph

I'm not sure how much sense they make in SF proper though. More like the other lower density Bay Area communities (maybe in Sunset and other lower density SF neighbourhoods?). Although 4-6 storey apartment buildings with 10-30 units could still make sense in SF and those are still different from 100+ unit buildings. Generally speaking though I'd say you want a 3x increase in floor space if you're demolishing what was there before.

First of all, the height limit in the Tenderloin varies between 80 and 130 ft so the place is replete with 8-13 floor buildings (for residential, it runs abut 10ft per floor typically). That's what most of the new construction is although a lot of it is being done by non-profit builders (still looks nice--I'd live in most of it if they'd let me).

But in the outer neighborhoods--the Richmond especially, they are building plenty of 4-6 floor buildings. They can't build taller out there.

Here's the kind of thing they are building:




Both images: https://www.streetadvisor.com/outer-...nty-california