Micro Cosmopolitan: The Promise of Tiny Apartments in a City Where Size is Everything

When Max Dorfman started apartment hunting this past spring, he had what he considered to be eminently reasonable demands: an apartment to share with two friends somewhere below West 125th Street that would cost no more than $3,400 a month. He was fine with a convertible two-bedroom so long as it still had a common space—“if you’re going to live in a shared space, we thought it was important to live someplace where we wouldn’t just shut ourselves in our rooms”—and fine with a walk-up.

But even though Mr. Dorfman, a 26-year-old who graduated from a master’s program at Columbia earlier this year, is a far cry from the recently-arrived rube who rolls into the city expecting to land a charming $1,200 a month West Village studio, he quickly began to fear that his seemingly straightforward criteria were nearly as outrageous.

“I looked for a month and couldn’t really find anything,” said Mr. Dorfman. “Then I started contacting brokers for help; I really started to worry when no one would get back to me.”

He finally connected with Citi Habitats broker Larry Kiang, who found a spacious two-bedroom railroad flat on Amsterdam and 88th that Mr. Dorfman and his friends turned into a three bedroom by partitioning off a section of the sizeable living room with bookcases. They still have a common space and the total rent is $3,150 a month. Which in this rental market, is about as close to a fairytale ending as Manhattan apartment searches get.

“We got really lucky,” Mr. Dorfman concluded. “I know a girl who pays $1,380 a month to share a one-bedroom on Columbus Avenue with three other girls. I mean, that’s just crazy.”

Crazy, perhaps, but not so unusual.

“Max’s apartment was a great set-up and price,” Mr. Kiang reflected “If I had a whole building of apartments like that, I could rent them all.”

Which is just what a handful of developers are looking to do. With a large population of singles desperately seeking housing and a potential fix in the form of micro-units, developers are exploring ways to build small apartments suited to middle-income singles within the current parameters of the city’s zoning and housing codes—not necessarily an easy task, despite the ready-made market.

Among them is Stage 3 Properties and Simon Baron Development, who have formed a partnership to develop two projects featuring shared two and three-bedroom micro-unit suites—avoiding any zoning code hangups barring apartments smaller than 400 square feet—aimed at young professionals.

“We’re planning furnished micro suites with a shared kitchen and bath that average about 250 square feet per occupant,” explained Chris Bledsoe, the co-founder of Stage 3 Properties. Mr. Bledsoe said the rooms would be priced at around a one-third discount of comparable studios, a price that he is very confident would still be profitable.

Additionally, an online roommate matching service (which would operate something like a dating site), a variety of common areas in the building and potentially even a cleaning service for shared spaces will help to eliminate many of the headaches faced by those currently braving Craigslist.

One-third of the city’s residents live in single-person households and 57 percent categorize themselves as “single,” according to the U.S. Census, a designation that is, for many, not a transitional status, but a long-term one which real estate developers have almost entirely failed to acknowledge in the form of housing models—in part, because of the legal complications of doing so—even as landlords and leaseholders reap large profits by splitting up units designed as family apartments.

To wit, Brownstoner recently wrote about a market-rate three-bedroom in Clinton Hill renting for $2,925 a month that returned after a slapdash renovation as a four-bedroom renting for $4,500 a month. Manhattan and brownstone Brooklyn developers catering to a pool of very wealthy buyers seeking very large luxury units has left other renters competing for the scraps. It’s a situation that mirrors, at the lower end of the market, what happened during the great depression, when larger houses were subdivided, often poorly, to accommodate a population in need of cheap housing.

And, as Sarah Watson, the deputy director of the Citizens Planning and Housing Council (which spearheaded the Making Room project advocating for more diverse housing stock) pointed out, “in the underground market that currently exists someone is benefiting, but it’s often hard to tell who.”

Though still in a nascent stage of existence, shared suites, along with micro-units, not only have the potential to address the largely unmet housing needs of a huge segment of the market, but could signal a major shift in New York’s rental market, with developers finally building housing for the majority of people who actually live here—the city’s average household size is 2.5 people—and, for the first time since the 1950s, when new single-room occupancy apartments and boarding houses were outlawed, providing alternate models for singles who cannot afford the increasingly high cost of living alone.

If micro-unit development in other cities with expensive real estate is any indication, New Yorkers would be delighted to channel that money to well-designed and well-lit, if tiny, studios or shared suites rather than contending with the many terrible offerings currently available on Craigslist, where a room with a window, 3-foot-plus ceilings and sane, financially-responsible roommates are considered an impossible trifecta. Detractors may criticize micro-units as glorified closets, but in cities like New York and San Francisco, where people actually live in honest-to-god, unglorified closets, such complaints come off as hyperbolic and out-of-touch.

In Seattle, where a developer found a loophole in the housing code five years ago and promptly started building dozens of micro-units, the tiny apartments have proved so popular with renters that there are now 3,000 such units built by a number of developers, some as small as 90 square feet. What’s more, Seattle’s many microunits essentially have zero percent vacancy, Politico Magazine recently reported, with available units often disappearing in a matter of hours.

And New York developers have indicated their eagerness to try: when the city put out a request for proposals for the micro-unit pilot project in Kips Bay, which is currently under construction, the RFP was downloaded 1,600 times and garnered 33 completed submissions, the largest response ever to a Department of Housing Preservation and Development proposal request. And many more likely would were it not for the zoning and housing code hurdles.

Indeed, these past few years have seen something of a micro-unit mania—a national obsession with tiny houses and small living spaces that has corresponded to the reurbanization of many cities as well as the growing percentage of single Americans—now more than a quarter of the population, running the gamut from recent college grads to the elderly.

Born out of both a sense of practicality and rejection of the pre-housing crash way of life (sprawling suburban McMansions no longer strike many as a touchstone of the American dream), well-designed micro-units offer the promise of escape both from the excesses that preceded the crash, and the somewhat squalid situations that a lot of people found themselves living in as a result of those excesses. Tiny apartments have come to represent freedom and flexibility more than a privation—the kind of living space that opens up possibilities rather than precludes them.

Monadnock Development, the company that won the right to build 55 micro-units in Kips Bay ranging from 250 to 370 square feet, is also looking at shared suites as well as developments that would incorporate micro-units into a mix of more traditionally sized studios along with one- and two-bedrooms, according to project manager Tobias Oriwol.

“If you can’t afford $3,000 for a studio, but you still want to live alone, there aren’t many options in Manhattan. Right now people are just working around that problem by sharing apartments, living three people in a two bedroom apartment—a lot of situations that are technically not legal,” he noted. “It shows that there is a demand that’s not being met.”

Jonathan Rose Companies, which is constructing a mixed-income tower on one of the BAM sites in Downtown Brooklyn, is also planning to include some micro-units in the development, along with regular studios and larger apartments, which the developer is able to do because the site is zoned to permit units smaller than 400 square feet—a somewhat rare loophole that nonetheless requires that such apartments be sprinkled throughout the building because of density rules.

“Whenever I build apartments, I have people coming up to me, asking, if it’s a one-bedroom apartment, if they can add a wall and get a second roommate,” said Matthew Baron, the president of Simon Baron Development Group. “We don’t allow it, it’s illegal, so we’ve come up with a way to address those needs.

Mr. Bledsoe described their potential clients as “20 and 30-somethings who were either not in a romantic relationship or not ready to cohabitate, earning less than $100,000 a year.”

“The job creation in New York City over the last five years has been primarily in tech and new media, unlike the law and finance jobs from a decade ago, and those are more price-sensitive consumers,” he said, noting that even many entry-level law and finance jobs aren’t topping $100,000 these days, which is essentially the baseline salary needed to rent a Manhattan studio, with the average rental price reaching $2,573 a month this past summer, according to Douglas Elliman (which require an annual income of $102,920).

The problem is that many of New York’s zoning and housing codes, written to ameliorate the kinds of slums and overcrowding that Jacob Riis documented—people living four or five to a room on the Lower East Side without plumbing or electricity—don’t speak to the current housing problems in New York City. The Lower East Side, for example, had between 600 and 2,400 people per hectare in 1910; today it has 150 to 300.

“It was born of the progressive era and public health initiatives, although there was also a big moral component, a sense that bad housing conditions created slums, which bred crime and disease,” said Ingrid Gould Ellen, the director of NYU’s Furman Center for Real Estate and Urban Policy. “And even as the city changed, the codes were not removed, but lingered.”

“Now, when we’re living in a city with extremely high housing costs, it makes sense to provide a range of housing options and allow people to sacrifice square feet if they want to,” she opined. “We don’t need as huge spaces in New York… there are many more things people can do outside their apartments here.”

Current laws cap suites at three bedrooms because of a provision in the housing code prohibiting more than three unrelated people from living in the same apartment. Landlords also can’t offer tenants individual leases because that would be considered leasing by the room, which is prohibited by the ban on new SROs, even as Mr. Bledsoe pointed out, the developments, which are slated to have high-end perks like doormen, will be “a far cry from SROs.”

And the resistance is not only regulatory, but also sociocultural, popular though micro-units are with hipster millennials and design magazines. While micro-units in Seattle have corresponded to higher nearby property values, complaints about micro-units ruining the low-density charm of neighborhoods are prevalent, and they’re usually laced with the implication that housing stock intended for singles, even if they’re largely salt-of-the-earth middle-class professionals, attracts unsavory elements.

As Mr. Oriwol noted, even though research shows that “there are single person households in every age group and demographic” when the Kips Bay project came before the community board, there were a lot of fears that it either end up an SRO or a dorm, filled with “a bunch of 22-year-olds from Kansas.”

For its part, the city is proceeding cautiously, holding off on permitting any additional micro-unit developments until it can assess the Kips Bay project, which is expected to start leasing next summer. And the City Planning Commission, while acknowledging that the city’s housing stock does not reflect the needs of its residents, has not yet committed to any zoning changes that would enable more micro-unit or shared housing models.

“We are exploring a set of zoning changes to promote housing production and affordability, including measures that would enable housing to better meet the diverse needs of New Yorkers,” wrote deputy executive director Howard Slatkin in an email to the Observer.

“Government is definitely interested in exploring alternative definitions of household,” Ms. Watson noted, but “what’s really tough is getting people’s heads around the new way of thinking about a unit.”

“There is innovation going on, and people are interested in embracing smaller units in a general sense, but sharing is one of the hardest things to get the city and the public behind because it challenges what the idea of a household is.”

But while fears about redefining what constitutes a household and slums—yuppie or otherwise—may be hard to dismiss, one look at Craigslist reveals New Yorkers dispensed with such antiquated notions long ago.