As rent and home prices have risen over the last few years, many wages have not, leaving some Americans out of luck when it comes to housing. As a result, micro-apartments have started cropping up in some of the country's most expensive housing markets.
Offering lower rent for tiny spaces, some boast these living spaces are an affordable way to live in a pricey town. For renters, however, the attraction for cheap rent might come with some drawbacks as well.
The main pull that is bringing young renters to micro-apartments is the price. At about half the rent of larger apartments and rentals, micro-apartments are best suited for young professionals and recent college graduates without high-paying jobs. However, most of these apartments are sizes comparable to a small hotel room, 300 square feet or smaller, often without a separate kitchen or bathroom.
Developers who create these apartments are banking on young people not minding smaller spaces in return for cheaper rent in a city center. With single-person households on the rise, demand for apartment rentals has increased. According to the U.S. Census Bureau, single-person households represented 27.8 percent of all U.S. households in 2012, compared to 25.8 percent in 2000. With more single people living on their own, city lifestyles and the rental market demand has risen.
The short stick of the deal is the size of the apartment and limited amount of living space. In order to make small spaces more appealing, complexes that offer micro-apartments often come with large communal spaces such as gardens, lobbies and restaurants where tenants can socialize.
Most micro-apartments exist because the demand for space and cheaper prices appeared in the most expensive housing markets in the nation, and their rise in popularity is just beginning. Because rent prices are significantly higher in some cities than others, it is not known if micro-apartments would work in smaller cities with cheaper rent and less demand. In affordable cities, young professionals might be able to bear the cost of a full-size apartment. Another reason why smaller cities might never adopt this real estate trend is fewer attractions and lifestyles that are different from what big cities promote, such as public transportation, large cultural opportunities and nightlife with active social scenes.
No matter the size of an apartment, it is still important to invest in renters insurance to maintain financial security in the case of theft or damage.