We’ve been hearing a lot about tiny living — smaller and smaller residential spaces — and wondered whether the trend is here to stay and what the implications are for multifamily.
Not surprisingly, the experts we talked to see it primarily as an urban phenomenon that appeals to Millennials. But they also see possibilities.
“I think it’s actually appropriate in some of your urban infill areas,” says Katherine Mosley, VP of development for TriBridge Residential. “We’re seeing that Gen Y – the Millennials — like being transient, and they are looking for a price point and are willing to pay a little more, take a smaller unit to be there in the urban core.”
The tiny trend has staying power, she says. “There’s [nearly] 80 million Gen Y’ers passing through the prime apartment hunting stage, so I think it’s got a future.”
Tracy Bowers, managing director at Pollack Shores/Matrix Residential, sees the trend as very market-specific, even tied to the kinds of industry that are dominant in a particular city.
“We all know that a true micro-unit community would work in specific cities such as New York, San Francisco, and Seattle,” she says. “The question is: Will these units work in other large markets such as Houston, Dallas, Atlanta?
“If there are high barriers to entry with techy jobs, micro units are a success,” she says.
Both Bowers and Mosley see micro-apartment potential in Nashville. “The city has a young demographic,” Bowers says, “and in-town rents for new product are well over $2 per square foot. It is difficult to find affordable housing in Nashville infill markets.”
Mosley says TriBridge has a project in Nashville that will have units targeting Millennials and others interested in smaller quarters.
The right kind of marketing is crucial, she believes. “The key is just trying to define the demographic on the front end,” she says. “I think we’ve had the most success with applying our marketing at what I call lifestyle events – wine tastings, things that this demographic is a little more drawn to, rather than spending money on traditional marketing avenues like publications and online. We’re getting better at qualified traffic for lifestyle events.”
Mosley says renters who find micro units appealing are especially keen on amenities. “What we’re finding with these micro-unit users is their unit is where they sleep. The rest of the time they are out in the community, out in our property, working, at restaurants. The unit really just becomes a place for them to lay their heads.”
Looking ahead, she says, “You are seeing multifamily developments start to incorporate micro units in their planning. Studios have always been a concept, and I think the micro units really apply to the most urban districts.”
“While we are in this proving-out phase, developers are not building as many as you will see in the future. They are trying to be cognizant of the number of micro units incorporated in any given development.”
Overall, TriBridge views tiny living as an opportunity: “We’ve seen a clear shift in what residents are demanding now. The best developments are going to be those that can adapt to what the market wants.”
So, in the right locations with the right conditions, the tiny phenomenon is likely to get bigger — but not likely to take over the multifamily industry. As the Millennials who are driving the small-space trend prepare to put down roots, odds are they will want a little more space.
— Susan Percy, 13 After Contributing Editor