Monday
July 25, 2016

Millennials Spur Micro-Apartment Boom

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Millennials Spur Micro-Apartment Boom

Millennials want an “on-demand lifestyle,” which means they are valuing location over square footage and amenities, says Glenn Kelman, the chief executive of the real estate firm Redfin. A growing number of young adults living in tech hubs like San Francisco, Seattle, and New York are showing a desire to live closer to the city center so that they can walk, bike, or take public transportation for their commutes.

Read more: Micro Apartments: The Next Big Thing?

And to get the luxury of living downtown, they may need to live in a smaller space. But developers believe millennials are OK with that.

Traditional rooms in the home are becoming less significant to the tech crowd of millennials who desire better locations. For example, some say they no longer need a garage (they’ll commute to work in other ways than via car), and they don’t require much of a kitchen (they’ll use a food delivery service). The living room has also grown less relevant since some say they don’t bother with parties anymore; they can socialize online.

"I don't know people under 30 who entertain," Kelman says. "There is so much social capital that is being re-invested elsewhere. I think almost the whole home has become a private space."

Developers are responding by building smaller.

From 2002 to 2008, the average unit nationwide mostly held at 995 square feet. Since then, square footage has dropped nearly 10 percent to 950 square feet, according to RealPage/MPF Research. In the West, the drop has been even more. Average units grew to about 963 square feet between 2002 and 2008-2009. Today, square footage has dropped to 919 square feet.

Most of this decrease has been due to developers building more studios and one-bedroom apartments. Studios and one-bedroom apartments have increased from 40 percent in 2002 to 50 percent currently, according to data from SB Architects in San Francisco.

In some areas, a growing number of units are popping up that are just 350 square feet. These units are most popular in cities like San Francisco, New York, and Seattle – where spaces are really fetching a premium.

Source: “High-Tech Millennial Lifestyle Inspires Micro Apartment Boom,” Curbed.com (March 15, 2016)