- Rentals for tiny apartments or "micro-housing units," defined as under 441 square feet, are growing in popularity.
- Tiny apartments are more common in Western U.S. cities, including San Francisco, Calif., Seattle, Wash. and Portland, Ore.
- Starter homes have also been shrinking in size, but that isn't helping make housing more affordable.
Many cities are embracing tiny apartments.
Tiny apartments or micro-housing units, defined as under 441 square feet, are increasingly emerging as a solution for sheltering more people in dense urban centers, particularly in Western cities in the U.S., according to an analysis by StorageCafe.
By decade, around 2.4% of new construction was for tiny apartments in the 2020s, compared with 1.1% in the 2000s, StorageCafe said.
Affordability and efficent use of space, which supports being able to walk and public transit, are encouraging the construction of tiny apartments.
Among the 100 most-populous U.S. cities, San Francisco, Calif. had the most tiny apartments, with around 15% of all housing units, followed by Seattle, Wash. (12%), Honolulu, Hawaii (12%), Portland, Ore. (11%) and Minneapolis, Minn. (10%) in the rest of the top five.
Still, regulations and public resistance are making it difficult to build more tiny apartments in other cities, particularly in Southern cities such as Fort Worth, Texas and Gilbert, Ariz.
But some cities are more strongly supporting tiny apartments.
For instance, in Seattle, Wash., around 66% of all new housing construction are for units that are 441 square feet or under, StorageCafe said.
Over the past decade, Neiman Taber Architects built 10,000 micro-housing units in Seattle, which rent at rates to people making 40% to 60% of the area's median income, said David Neiman, Partner at Neiman Taber Architects, in the StorageCafe report.
"It’s not a silver bullet, but it plays a critical role in expanding the supply of low-cost, market-rate housing, especially for individuals and couples," Neiman said.
What about the size of starter homes?
Single-family homes have also been growing smaller in recent decades, but that isn't making housing more affordable, according to a report by real-estate research company Cotality.
Homes under 1,500 square feet made up around 22% of new builds in April, up from 18% in April 2020, Cotality said.
Still, that is down from a Jan. 2011 peak of nearly 32% of new homes that were under 1,500 square feet.
Cotality said regulations, such as zoning laws and density restrictions, have slowed construction of smaller homes in recent years.
And despite new homes generally growing smaller, buying a home still remains too expensive for many people: Cotality said the median price of a newly-built home was around $430,000 in February.
"In most markets, that means buyers now need earnings well above the national average to secure what would once have been entry-level housing," Cotality said. "Size is shrinking, but affordability has not returned."