Fascinating article, not just because people are buying such small spaces--I get that and am still trying to find a place to build the 9-Tsubo House--but because financing condos is the bane of our real estate existence in historic downtown Savannah. I'd be curious to know which lenders are making these loans. We have plenty of spaces that would make great mini-condos here in downtown Savannah, though, so once the financing environment becomes a little easier, maybe we'll join the trend.
Alexandra Gorbokon, a 26-year old public relations executive, has made an offer on her first home, a condo in downtown Chicago. She’s looking forward to eliminating her one-hour commute to and from the suburbs and filling her newfound free time with a better gym habit, enjoying her new neighborhood, and serving on a board in her building.
She’s a little less excited about squeezing her stuff into her new home’s tiny 600 square foot space. But she acknowledges that, at her age and with her modest $150,000 home price limit, living in a small space is a minor tradeoff for access to an urban lifestyle.
“I’m a little concerned about the size. I think it’s easy to grow out of this sort of space,” she says. “But I wanted to live in the city while I was still young.”
Gorbokon’s attitude about real estate is typical of her generation’s, says John McIlwain, a senior fellow for housing at The Urban Land Institute in Washington D.C. McIlwain says many new in-city condo and apartment buildings are offering smaller footprints to satisfy not only downsizing Baby Boomers but, especially, members of Generation Y who are moving out of dorms and parents' places and setting up their own households. Generation Y, he says, views a home’s location as more important than its size. They may also see living small and in-city as an environmentally responsible lifestyle.
“For Gen Y, the home is a place to live out of, not to live in,” he says. “They don’t think of this as a sacrifice. It’s just their lifestyle.”
The 'new small'
So with this renter and buyer in mind, numerous condo and apartment developers around the country are designing new homes with square footages resembling — and even far less than — Gorbokon's new home.
“Based on our experience, while anything under 1000 square feet is considered small nationally, the ‘new small’ might really average out at somewhere around 500 square feet,” says Janel Laban, executive editor for the interiors blog Apartment Therapy, which runs an annual “Small Cool” decorating contest. “Quality of life, which is often strongly affected by location, trumps size every time.”
A brief survey of completed and forthcoming buildings shows that with small-space projects, the more expensive a city, the smaller its definition of “small.” While mellow Portland, Ore., boasts 520-square foot homes, San Francisco’s “small” ranges from 250 to 350 square feet. Vancouver, British Columbia is smallest of all: There, a building called Burns Block will next year start leasing 30 “micro-lofts” with 270-square feet of space and prices starting around $700 per month. The tiny lofts might offer more room than a basement or converted spare room. Vancouver recently passed rules allowing homeowners to rent out accessory units as small as 195 square feet, according to The National Post.
Cubicle living
The 98-unit Cubix condominium building in San Francisco’s trendy SOMA (South of Market) district has sold about 66 of its tiny loft units, which start at 250 square feet and top out at 350, to a mix of young adults as well as to a surprising number of buyers in their 30s and 40s, says Jim Hurley, a broker with Vanguard Properties who is the project’s sales manager.
“The mix of buyers isn’t skewed as young as you’d think,” Hurley says, noting that many buyers wanted second homes or split their lives between a job in San Francisco and a home elsewhere. “The demographic has been surprisingly broad.”
Ranging in price from $200,000 to $250,000, the tiny units are stylish — with concrete floors, stainless steel appliances, stone bath surrounds, and energy-efficient passive ventilation. The Cubix compensates for its units’ small size with a transit-friendly location, community amenities (like Cubix’s rooftop “glass house” common area), and proximity to services (Whole Foods is nearby). Hurley says one new resident just completed her MBA, happily ditched her car to live downtown, and uses nearby regional train transit, public buses, car-sharing, or her own two feet to get around.
Shoebox Lofts
In Portland, Ore., small is a little bigger. The cheekily-named Shoebox Lofts, set to begin construction later in 2010, will share themes seen at Cubix and other small-footprint developments. The Shoebox’s layout includes two buildings linked by a courtyard, along with ground-floor retail and amenities such as bike storage and repair space. Because the building is set on a major bus corridor and in-city bike route, it won’t offer car parking but, instead, biker-friendly features like storage and a “bike repair” room. It’s within walking or biking distance to the city’s artsy Mississippi and Alberta areas.
The 17-unit project’s 520-square foot units will offer 16-foot ceilings and prices below $200,000, says developer Jon Gustafson. Portland-based di Loreto Architecture designed the spaces with a minimalist urban feel, says project designer Chris LoNigro. The look includes concrete floors, steel-joisted ceilings, and floor-to-ceiling “garage door” windows partially shaded with exterior wooden screens.
“It’s definitely a different lifestyle choice,” Gustafson acknowledges. “I wanted the spaces to be open so the owner could decide how to live in them.”
“This sort of smaller space we’re building is going to be important to the diversity of a lot of neighborhoods in the future,” he says, noting that other condo builders offering larger units can’t help but price them for twice as much. “It’s a place to get started.”
Also forthcoming: Two small-footprint developments in the Bay Area, each comprised of 300-square foot modular-built housing units from Zeta Communities, which has designed and is manufacturing what it calls SmartSpaces from a facility in Sacramento. The two projects — a 22-unit San Francisco condominium complex and a Berkeley apartment community — are currently “on hold” given the market, says Zeta Communities spokesperson Shilpa Sankaran.
“The demand is there,” she says. “There’s a high percentage of people in the San Francisco area who are single and can live in these units.”
Trend toward downsizing
The push to introduce smaller-footprint homes is reflective of the reversal in home size that’s taken place in recent years, says Stephen Melman, a spokesman for the National Association of Home Builders in Washington D.C. Melman, citing census data, says that the median size of newly-built condominiums peaked at 1,472 square feet in 2007, but fell to 1,355 square feet in 2008. (2009 data aren’t yet available.)
Indeed, buyers of smaller condos reason that, when and if they tire of a small space, they can rent it. Condominium associations of micro-unit buildings sometimes anticipate that owners of these units will, eventually, move up and out and may want to sublet. Cubix will let owners sublet units, but for 30 or more days at a time so as to prevent excess turnover or vacation renting, Hurley says.
“I made a big down payment and sought out permission to rent my place down the line,” says Gorbokon, the Chicago buyer, who, like many builders of small-footprint spaces, is planning ahead for a future where there will be plenty of demand for small spaces among those seeking big-city living.
View original article here: http://www.msnbc.msn.com/id/38097923/ns/business-real_estate/
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
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