America Needs Small Apartment Buildings. Nobody Builds Them

[JManc]

Originally Posted by Crawford

It's important we create more such housing, because it's in massive demand in certain global cities, and the market isn't producing enough such housing. This creates inefficiencies and especially lost wealth/productivity.

I don't think anyone is arguing for more 600 s/f one bedrooms for high earning professionals in Tulsa. The market isn't demanding such housing. But in NYC, possibly SF, maybe Toronto (?), yeah. Outside of North America, such housing is very common.

I agree but 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; mostly spacious apartments with a lot of amenities marketed towards those high earning professionals. While New York gets a little bit of everything. yes, in other cities outside NY, micro-apartments are being developed as well following a growing trend of smaller living spaces mainly due to choice, not necessity. The whole "tiny house" movement where people want to minimize their lives.

Originally Posted by Gordo

I don't understand why we would make something that a lot of people want illegal. What are we "protecting" them from?

I agree and don't understand why that is.

[Lipani]

A lot of cities could use micro-apartments. Unfortunately many cities also have minimum parking requirements that make them more expensive. I'm not sure what San Diego's case is now, but a few years every residential development had the same parking requirements whether they were in downtown or heavily suburban Rancho Bernardo.

[Crawford]

Originally Posted by JManc

I agree but 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; mostly spacious apartments with a lot of amenities marketed towards those high earning professionals. While New York gets a little bit of everything. yes, in other cities outside NY, micro-apartments are being developed as well following a growing trend of smaller living spaces mainly due to choice, not necessity. The whole "tiny house" movement where people want to minimize their lives.

In NYC, apartments have been getting much bigger, not smaller. The small apartments were mostly built in the 1970's and 1980's. Since the mid-1990's or so, apartments have been getting more family-oriented. The 600 sq ft. one bedroom of 1980 is now a 900-1,000 sq ft. one bedroom of 2017. There are 60 floor towers going up with like 30-40 units. The same tower in 1990 would have had 200+ units.

Developers are building bigger apartments because it's good business - they get more per square foot. In the "bad old days" in NYC almost no one built family sized apartments, and now that many families are staying in the city, there's very limited product, putting pressure on bigger unit prices.

We recently bought a 2 bedroom condo in Brooklyn, around 1,050 square ft. and I can tell you there was a huge premium for bigger apartments. 1,200 sq. ft. 2 bedrooms go for twice the price for 800 sq. ft. 2 bedrooms. Developers will continue to go big (or at least "big" for NYC standards) until the market says otherwise.

Originally Posted by JManc

I agree and don't understand why that is.

I'm not saying I agree with municipalities, but the reason they limit minimums is to preserve existing property values. Again, bigger homes tend to be pricier per square foot.

So a suburban neighborhood of 3,000 sq. ft. new homes will, quite naturally, object to a proposed development of 2,000 sq. ft. homes, since those homes will (in theory) lead to lower home prices. They will seek to enforce higher minimum home sizes.

In urban areas it makes less sense. Extreme small apartments are probably banned because of quality housing laws from the reform era, as lots of people lived in hell conditions prior to WW2. But I doubt anyone is "harmed" from a bunch of 200 sq. ft. apartments that meet code in 2017.

[ChargerCarl]

Originally Posted by MonkeyRonin

600 sqft one bedrooms are entirely reasonable, large even (I've seen 2 bedrooms in less than that). As of 2012/2013, the average one bedroom condo in Toronto was 560 sqft, while the average for all condos was 740 sqft - lower now.

However, we have some here who seem to be arguing more 100-250 sqft units is the solution to the affordability problem in some cities. These are fine in limited quantities (or for specialized purposes, like student accommodations or housing for the homeless), but given free reign to developers, I'd maintain that we're only going to see less livable spaces before we see more affordable prices.

Given free reign, developers will build the amount of units people demand in the sizes they demand. Why exactly should we stop them from doing so?

Increased competition on the supply side is good for consumers. By mandating things like unit size all you're doing is taking away options from people who might otherwise prefer to save money on a smaller living space, myself included.

[ChargerCarl]

Originally Posted by Gordo

It's very, very much in demand in SF, Seattle, LA, dozens of smaller cities, and likely many east coast cities as well if it were legal. Even a place like Chicago would probably be building this type of housing in certain locations if it were legal - a lot of people would trade housing next to transit and without roommates over housing further from transit and/or with roommates, even if it were less room in a square footage sense. Time and privacy are valuable to people.

It's funny reading people worry about micro-units popping up everywhere while at the same time saying theres zero demand for them.

So much incoherence.

[JManc]

Originally Posted by Crawford

I'm not saying I agree with municipalities, but the reason they limit minimums is to preserve existing property values. Again, bigger homes tend to be pricier per square foot.

So a suburban neighborhood of 3,000 sq. ft. new homes will, quite naturally, object to a proposed development of 2,000 sq. ft. homes, since those homes will (in theory) lead to lower home prices. They will seek to enforce higher minimum home sizes.

In urban areas it makes less sense. Extreme small apartments are probably banned because of quality housing laws from the reform era, as lots of people lived in hell conditions prior to WW2. But I doubt anyone is "harmed" from a bunch of 200 sq. ft. apartments that meet code in 2017.

That's exactly how it is in my neighborhood. All the homes on my street for example range from 2,500 sq. ft. to 3,200 sq. ft. (ours is about 3,000) but the house next door is about 1,800 sq. ft. and valued roughly $80K less than everyone else while the normal range is +/- $15-$20K

As for urban areas, I suspect you're right, probably a relic from when entire families were crammed into tiny tenements all over the northeast.

[MonkeyRonin]

Originally Posted by ChargerCarl

Given free reign, developers will build the amount of units people demand in the sizes they demand. Why exactly should we stop them from doing so?

Increased competition on the supply side is good for consumers. By mandating things like unit size all you're doing is taking away options from people who might otherwise prefer to save money on a smaller living space, myself included.

Believe or not, the market isn't perfect. Developers aren't benevolent; and people do need a place to live, with few having the luxury to "demand" much of anything - they buy or rent what's available that they can afford. When it comes to something so essential, but also so volatile and vulnerable to speculation and manipulation like the housing market is, you can't just let it sort itself out the way you could for typical consumer goods.

Like I said earlier, I'm all for allowing more micro-units and diversity of housing types, but only to a point. Ideally, there'd be a certain maximum percentage of units that could be micro in any development (and a mimumum requirement for 3+ bedroom units) - that would keep them from becoming the "new normal" and also suppress their cost since buyers would be ensured more choice. But given free reign in tight markets, developers absolutely will use that freedom to get away with giving the consumer less, and pocketing the difference.

As has happened in Toronto, developers will cram in as many small units as they can and then sell the more reasonably sized ones at a premium. While this does mean that there are more units available at a somewhat lower price than there would be otherwise, it also means the larger units that people actually want are that much more expensive. So that is to say, it's not all bad - I guess it just depends on which outcome is preferred: having slightly lower housing costs but less livable apartments; or better but slightly more expensive ones.

[Jonesy55]

Do smaller homes really bring down the value of existing homes? I can see that it would bring down the average for homes on that street because a smaller home will be cheaper but would it actually make an existing 3,000sqft home on that street worth less just because a 2,000sqft got built down the road?

2,000sqft still seems pretty big from my UK perspective btw, that would probably be one of the largest houses on a new housing development where I live where the norm for a mix of homes in a new project would be from 500sqft apartments to 2,500sqft detached houses depending on where the development was.

In more urban parts of town you won't get much more than 1,500sqft homes being built because land is too expensive in those areas, in suburban developments on the edge of town you won't get 500sqft apartments in the mix because most people choosing to live on the edge of town want family homes, but you will get small townhouses of 700-800sqft. There is no equivalent here of the 'zoning' in the US where whole areas are designated solely for detached houses, it's on a case by case basis whether a project for housing gets approved under the framework of the overall plan for the city/county/district.

People who want more than 2,500sqft tend to go out of town into villages and rural areas and often build those homes themselves as they won't normally be included in larger housing development projects within urban areas.

[Gordo]

Originally Posted by MonkeyRonin

Believe or not, the market isn't perfect. Developers aren't benevolent; and people do need a place to live, with few having the luxury to "demand" much of anything - they buy or rent what's available that they can afford. When it comes to something so essential, but also so volatile and vulnerable to speculation and manipulation like the housing market is, you can't just let it sort itself out the way you could for typical consumer goods.

Like I said earlier, I'm all for allowing more micro-units and diversity of housing types, but only to a point. Ideally, there'd be a certain maximum percentage of units that could be micro in any development (and a mimumum requirement for 3+ bedroom units) - that would keep them from becoming the "new normal" and also suppress their cost since buyers would be ensured more choice. But given free reign in tight markets, developers absolutely will use that freedom to get away with giving the consumer less, and pocketing the difference.

As has happened in Toronto, developers will cram in as many small units as they can and then sell the more reasonably sized ones at a premium. While this does mean that there are more units available at a somewhat lower price than there would be otherwise, it also means the larger units that people actually want are that much more expensive. So that is to say, it's not all bad - I guess it just depends on which outcome is preferred: having slightly lower housing costs but less livable apartments; or better but slightly more expensive ones.

I guess I'm confused - your theory for Toronto is that developers are building more smaller units so that they can sell their larger units at a higher markup? Why wouldn't some of the developers figure this out and just build all larger units at said premium, thus bringing things back into balance? Or is the theory that zoning restrictions has kept the amount of potential development so low that developers are basically working together in some way to do this?

[MonkeyRonin]

Originally Posted by Gordo

I guess I'm confused - your theory for Toronto is that developers are building more smaller units so that they can sell their larger units at a higher markup? Why wouldn't some of the developers figure this out and just build all larger units at said premium, thus bringing things back into balance? Or is the theory that zoning restrictions has kept the amount of potential development so low that developers are basically working together in some way to do this?

The amount of new supply is definitely not low, not in Toronto's 10+ year building boom. It's just that developers can go low with size, and so they all do, because why not if people are still buying?

It works something like this... Imagine a hypothetical building with 8 units of 600 sqft 1-bedrooms going for $500,000 each, and 4 units of 700 sqft 2-bedroom units priced at $600,000.

Now, imagine a building of the same size that instead has 14 units of 400 sqft 1-bedrooms at $400,000 a piece, and 3 of those 2-bedrooms now at $700,000.

Which would you do then, from the perspective of the developer? If you're in a hot enough market where you'd be able to sell the volume, and it's permitted by zoning, they'd of course go with the latter. Which for the consumer is a slight advantage if you're one of the people in the market for a lower-end condo and don't mind sacrificing some space for cost; but if you're instead in the market for something a little larger (like say, for a family) it becomes a disadvantage as that size of unit become more expensive due to the relative scarcity.

And some DO build projects of exclusively larger units - those are luxury developments. Not everyone can do that of course as the market wouldn't supposed those kinds of prices across the board. And so the lower/mid-range developers go for the bulk sales model, becuase there's more profit in selling a larger quantity of smaller, cheap units than fewer larger ones.

[Gordo]

Why would they build number two if there's insatiable demand for 400 sqft 1 bedrooms? They'd more likely go with 19-20 400 sqft 1 bedrooms for $400,000 and save on the hassle of having multiple unit types.

You're describing a situation where zoning only allows specific things, so developers flock to the highest profit option that will comply with the restrictions. In a functional market, they'd build those small units like crazy until the price came down due to over supply, and then they'd move on to other types of units. If you want to argue that a freer market simply can't work, that's fine, but the situation you're describing is entirely because of zoning, not because of some developer idea to squeeze the prices of larger units with a bunch of smaller units.

Toronto's supply creation compared to population growth is still very, very low compared to earlier periods of less restrictive zoning and/or other places currently with less restrictive zoning. Better than most hot American metros, sure. It seems like a building boom because of the types of housing being built and the fact that it's centralized on larger buildings that poke out on the skyline.

[RCDC]

Small buildings are a good way to add density without compromising the character of quiet, single-family districts.

Will the owner/landlord maintain these? Contract with a reputable property manager, and authorize the manager (pay) to provide maintenance when needed? After all the goal is "affordable", and "landlords" are in it for profit.

[chris08876]

We need to see the rise of micro apartments in places like SF, NY, Chitown, Miami, and so on.

Neighborhoods need to be rezoned to allow for much higher density. No excuse for the U.S. to not fix the housing crisis in many of these cities. Build them in masses. Towers with 1000's of units and in select areas that are walkable and/or have mass transit options available.

[ChargerCarl]

Originally Posted by RCDC

Will the owner/landlord maintain these? Contract with a reputable property manager, and authorize the manager (pay) to provide maintenance when needed? After all the goal is "affordable", and "landlords" are in it for profit.

They will if they're in competition with lots of other landlords for scarce tenants.

[mhays]

Originally Posted by Via Chicago

say what you will but the VAST majority of people are ever going to be "OK" living in a 120 sq foot closet, and most would likely rather move out of a city entirely rather than be subjected to such an inhumane living space.

maximum security prison cells are more spacious (and despite your claim ive never stayed in a hotel room that small either). get real

the average chicago studio i think it somewhere around 500-600 feet, which is far more reasonable

You're quoting me, not Eshaton. And you're really confused.

1. Why are you talking about what the "vast majority" wants? Some people gladly choose small spaces vs. commuting. But screw them because you wouldn't live there?

2. I've stayed in much smaller hotel rooms than 120 sf. Travel to Tokyo or Italy on a budget sometime.

3. Prison cells get much, much smaller than 120 sf unless they're for multiple people.

But forget all that...you're offended so they can live in the gutter!

[mhays]

Originally Posted by Pedestrian

I didn't design it so I don't know except that the size and shape apparently fit the other units in the building (plumbing in such buildings can't be put just anywhere--generally you want to minimize long "runs" and have, for example, rooms with spiggots and sinks back to back) . The "bedroom" is only a bit over 96 sq ft. A king-sized bed is about 42 sq ft. You would have trouble squeezing a dresser or nightstand (or certainly an armoir to make up for the lack of a closet) in there and still be able to walk around the bed to change the linen. There's no separate closet (which, as I said, rules out calling it a "bedroom" in many jurisdictions) and it shares a window with the "living room". I suggest it would take quite a bit of effort to overcome these issues and most of them would sacrifice the size of the "living room". The most difficult to overcome might be the window. You'd have to put it in one room or the other--almost certainly the bedroom or what remains of that room would be too tiny to fit a bed. That would leave a windowless living room. Or you'd have to redesign the window arrangement of the entire building.

If it's an old building I get the window thing. If it's a new building, that's not an issue at all...each room gets a window.

King-sized beds aren't the typical standard. Maybe queen.

[mhays]

Originally Posted by JManc

I agree but 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; mostly spacious apartments with a lot of amenities marketed towards those high earning professionals. While New York gets a little bit of everything. yes, in other cities outside NY, micro-apartments are being developed as well following a growing trend of smaller living spaces mainly due to choice, not necessity. The whole "tiny house" movement where people want to minimize their lives.

It's much simpler than that. In a larger number of cities (mine among them), a single cook or or phone bank worker can choose (a) a micro, (b) a long commute, (c) a roommate or three, (d) something subsidized if they're lucky, or (e) living with mom and dad.

Some people value location even if they would like square footage. Especially at certain points of their life. In my 20s I'd have taken a true micro vs. a roommate if the chance had existed.

[Pedestrian]

Originally Posted by JManc

I agree but 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

The San Francisco Bay Area is getting full of everything from dorm-like apartments to residential buildings built of recycled shipping containers such as one sees around the world so this statement is flat wrong.

The Micro Housing Development Boom Across the U.S., Mapped
BY MARY JO BOWLING DEC 15, 2015, 11:00AM PST

The pronounced swing back towards urban living, and the renewed fervor for downtown development, has only made our cities more dense, making the search for cheap housing that much more challenging. While mayors across the U.S. have called for more affordable housing (in New York, both Bloomberg and De Blasio have said it was imperative the city offer more low-rent options), many developers have decided the solution to density and affordability is downsizing and designing smaller units. A micro housing and micro dwelling boom has hit big cities over the last few years . . . .



(Examples)

Cubix Apartments
This proposed efficiency dwelling in North Seattle, part of the Cubix brand of small dwellings being developed by Daniel Stoner, seeks to leave a smaller footprint in a few different ways. In addition to smaller units (231-square-foot residences and 310-square-foot live-work spaces), the four-story structure is a transit-oriented development. Seattle is currently the capital of the micro housing boom, with hundreds of units available and more than 1,000 in various stages of development.


CitySpaces SOMA (San Francisco)
Completed in 2012 by Panoramic Interests, this LEED Platinum structure features 23 units measuring 295 square feet each, all equipped with a number of green features, including solar hot water heating and an all-building car share, as well as space-saving adjustable furniture. The company also recently finished a building called The Panoramic in the same neighborhood.


The Panoramic


Patterson Mansion
A grand residence built by a former Chicago Tribune editor that was once the home of the Washington Club, this Neoclassical structure is in the process of being converted in 90 microunits measuring roughly 350-square-feet each.

http://www.curbed.com/maps/microhous...ving-apartment

[mhays]

Demand isn't a question at all. There's tons of demand.

In fact there's so much demand that opponents talk about how expensive they are. Often they'll be $4-5/sf instead of $3-4 like larger lowrise units...like $900 for 200 sf vs. $1,400 for 400 sf.

[eschaton]

It's a shame the discussion shifted from small apartment buildings to small apartment units, because they're two different things entirely.

The central problem - why small apartment buildings are rare - is because where they should go is upzoned areas which were traditionally dominated by detached single-family housing. Yet in the vast majority of the country - even in comparably development friendly Seattle - building such structures in SFH neighborhoods is essentially impossible.