In major urban U.S. cities such as Seattle, New York City, Boston, San Francisco, and Washington, D.C., apartment unit sizes have been decreasing as developers seek higher density and revenue per square foot to compensate for increased land value and construction expenses. These "micro-units" are typically studios or one bedroom apartments with full kitchens and bathrooms and lease for 20 to 30 percent lower per month than conventional units yet have high value ratios (rent-per-square-foot). The size of such units varies according to city-specific size requirements for new dwelling units, but typically ranges from 280 square feet to 450 square feet, often falling between the sizes of a one and two car garage.
The first prefabricated micro housing project in the U.S., SmartSpace SoMA (shown below), was built in San Francisco in 2013. Its 23 units are just smaller than 300 square feet each and feature dining tables that convert into beds.
Micro units have preformed well when compared to conventional units, achieving higher occupancy rates and rent-per-square-foot. According to 2014 consumer research conducted by the Urban Land Institute, nearly a quarter of renters in traditional apartments would be interested or very interested in renting a micro unit. However, real estate analysts have yet to determine if micro units characterize a large, relatively untapped market or is simply a niche market. The popularity of these units could be attributed to their relative scarcity as opposed to unmet demand - only time will tell.
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