4 There is a global trend towards micro apartments in urban locations The Urban Land Institute (ULI) published a report in 2014 titled “The Macro View on Micro Units”. The research looked at the trend in the United States towards Micro Apartments where smaller apartments were leased at 20 to 30% lower monthly rentals than conventional units. Micro units are generally seen as being around 30 to 35 square metres rented by single young professionals or couples. The ULI report explains that the micro units “actually feel larger than they really are. Such items include flexible furniture systems, high ceilings, oversized windows, built- in storage, gadget walls and moveable kitchen islands.” In New York, former mayor Bloomberg waived the then minimum size of 40 square metres for a competition to design micro apartments between 27.5 square metres and 30 square metres that included fully functioning kitchens and accessible bathrooms. In San Francisco new legislation was passed allowing apartments as small as 22 square metres that included 7 square metres of bathroom and kitchen. Most of these small units include Murphy beds that fold up to become a couch during the day. The main influence behind the trend towards smaller unit sizes in America has been a shift in the mix of unit types towards studio and one-bedroom apartments. The ULI research demonstrated that in 2002-2003 studio and one bed units were 41% of apartment completions. By 2012- 2013 this had jumped to 51%. The research found that the big growth in smaller units was in urban core locations. The report stated: “Building product that features more studio and one-bedroom units simply makes sense.” As a demonstration of consumer interest in micro units the ULI research found that units under 50 square metres ranked among the top occupancy achievers in 2014 with 91.1% occupied. The Macro View on Micro Units their search. Once they become micro-unit residents, their overall satisfaction levels are similar to those of conventional renters or trail only slightly. This infor- mation was evident when the micro-unit satisfaction results were compared to the Kingsley Index. Dis- secting the data further, micro-unit renters are more satisfied than conventional renters with community location, amenities, and unit features and fixtures. However, they rate the perceived value for amount paid and satisfaction with unit floor plan and layout considerably lower than renters of conventional units. This result leaves room for market participants to improve on space layout. Going back to micro-unit renters’ initial leasing decision processes, the survey results suggest loca- tion-related factors, including proximity to work and school, neighborhood amenities, and public trans- portation, are key, as are price and the ability to live alone. All of these responses are not only similar to potential renters’ decision processes but are also in concurrence with current developer practice. Market participants have indicated that occupants of micro units tend to stay for relatively short periods. This hypothesis was tested by asking micro-unit renters about future renewal intentions as well as purchase interest and likelihood of recommend- ing micro-unit communities. The survey revealed that micro-unit renters generally indicate a lower likelihood of renewal than conventional renters do, with 41 percent of micro-unit respondents indicat- ing likely renewal, compared with 57 percent in the Kingsley Index. The significantly lower renewal rate can potentially translate into higher operating cost, as has been witnessed in historical performance. To further explore the renewal decision, Kingsley Associates analyzed the decision factors cited by each renewal group: unlikely, unsure, and likely. For micro-unit residents who indicated they were unlikely or unsure of their renewal decision, price was the primary decision factor, followed by space satisfaction finishes layout Lease decision factors Percent 4s and 5s Location 97% Price 86% Proximity to work/school 78% Proximity to neighborhood amenities 73% Ability to live alone 71% Proximity to public transportation 62% Internet/wifi services 54% Quality of finishes 52% Floor plan/layout 42% Assigned parking 32% Common areas/amenities 32% Sustainability practices 29% Sense of community 27% Pets allowed 26% In-unit storage 25% Visitor parking 21% Neighbors with similar lifestyles 20% Micro-Unit Renters’ Priorities in Initial Lease Decision or a 30 ), a n- o e- ly rs le. nd and ve, d y le ne get its f en- ac- m to it. r ross er what ambiguous term that covers anything from a relatively small studio or one-bedroom apartment to a short-term lease, SRO unit with communal kitch- en and common room areas. In fact, many in the industry are moving away from branding their units as micro because the term has begun to arouse neg- ative connotations associated with higher density, overcrowding, and transient populations. In New York City and Philadelphia, the minimum size requirement for a new dwelling unit is 400 square feet. However, former New York City mayor Bloomberg waived this requirement for the adAPT NYC competition, which defined micro apartments as studio apartments that range between 275 and 300 square feet and include fully functioning kitchens and accessible bathrooms. In the city of San Francisco, new legislation was passed allowing apartments as small as 220 square feet, so long as 70 square feet of this space is allocated to a bath- room and kitchen. In the District of Columbia, the minimum size for an apartment is also 220 square feet but with no prescription regarding allocation of space within the unit. In Boston, the minimum size for a dwelling unit The size of what qualifies as a micro unit is determined by the market in which it exists . An average micro unit on the East and West Coasts, such as those proposed in the adAPT NYC competition, can be around 300 square feet (top), but in some Midwestern and Texas markets, units, such as those designed by Urban Studio, can range between 400 and 500 square feet (bottom) . CURBED NY “MICRO DWELLINGS” (TOP); IDEABOX (BOTTOM) A 300 square feet or 30 square metre micro unit design for Mayor Bloomberg's competition Page 19 of the ULI 'The Macro View on Micro Units'