In today’s most populated cities, many struggle to find a home within their budget, leading many to “think small.” Home trends, from those like Marie Kondo, have inspired people to adopt a more minimalist lifestyle. Younger generations, which represent roughly 25 percent of the U.S. population, are paring down their possessions and instead choosing to spend their earnings on experiences, such as world travel, 5K runs and concerts. This makes them the perfect fit for the new housing concepts of co-living and micro-living. Burdened with the costly price tag of rent in big cities, many renters find the solution in sharing spaces or living in smaller quarters. While co-living and micro-living may not be considered ideal, the concepts aim to meet the needs of today’s renters from an affordable, new perspective.
For real estate innovators, like myself, the underlying purpose behind both micro-living and co-living is to create unit square foot optimization, which ultimately aims to accomplish lower rental costs through minimizing square footage. The outcome: synthetic affordability.
To achieve unit square foot optimization, developers approach synthetic affordability from two different angles to meet the needs of those living in the world’s most populated areas. One approach is a co-living environment – a modern form of housing where residents share living spaces and associated amenities, like collaborative workspaces and social networking hubs. Co-living produces unit square foot optimization by combining shared living spaces (i.e. kitchens, living rooms) and maximizing the rent per square foot. Despite the appeal, the co-living model does have its disadvantages, given residents sacrifice privacy for affordability and even become subject to similar underlying risks of co-working fluctuating with the economy.
Most comparable to that of a tiny home, the micro-living model is now being rolled out to apartments typically smaller than 350 square feet, sometimes with fully functioning kitchens and bathrooms, ample closet space and even a washer/dryer unit. Micro-living appeals to renters who want a simplistic, yet social home lifestyle. Micro-development, such as FLATS, captures unit square foot optimization by reducing the floorplate of any given unit type. This works for them because the brand shared amenity spaces create a sense of community, while providing a large return for developers, and create affordability of individual units still allows for resident privacy and individuality.
So how do you bring this to life? Consider a building the physical manifestation of minimalism and living simply, while PropTech is the digital manifestation of simplistic, integrated living. Thoughtful integration of technology is important to consider when creating amenities, especially in today’s micro-living hubs. For example, we built our software application Livly unifies disparate digital services (such as rent payments, maintenance tickets, package management, on-demand hospitality tools, etc.) while also connecting to the building’s hardware. By putting these abilities on a mobile application we feel like we can transform how renters and managers communicate, live and engage with physical spaces.
Today’s PropTech services even provide developers the opportunity to generate value by transforming “deadspace” into revenue sources. PropTech can be considered the glue for many additional conveniences aligning with habits of the mobile-first, digitally native population moving into micro-units. From a streamlined digital move-in process, to in-unit package delivery, technology is helping buildings be more “of the times.” Micro-living concept are one example of this as they deliver additional value to residents who have chosen to pare down their physical possessions but increase their experiential engagement (i.e., instead of spending on objects, they spend on services to open up time in their day).
In urban Chicago, for example, residents are more comfortable renting smaller units with the promise of shared amenity and mixed-hospitality space. Buildings offering these unit types provide the value of location: the convenience and appeal of being close to the heart of downtown Chicago. Of couse, living in a dense urban area can give people the feeling of privacy loss. In order to make the micro-living model, it’s important to foster a sense of privacy while creating community through the brand. Then, the private, approachably priced units can seamlessly exist in tandem with the building’s common areas, creating the feeling of an extension beyond the walls of a single unit. We rolled out our digital integration experience this past March, in the latest FLATS apartment building, The Synagogue. To highlight its history, architectural details of the building were maintained, including marble arched frames and stained-glass windows. The building’s historical details are intertwined with chic studio and one-bedroom apartments characterized by exposed brick walls, natural sunlight and state-of-the-art appliances. Though simple, these small elements help tell residents’ stories and overall enrich each individual experience.
Many residents and prospective renters are seeking out living environments that cater to all of their unique needs and personal interests in a convenient way. My team caters to our residents in a variety of different ways from technology to shared spaces. The common areas include collaborative workspaces that span from productivity-focused co-working style desks to multiple lounges and roof decks; communities for wellness that feature club-style gyms with boxing rings and other equipment; and hubs to eat and drink such as on-site coffee shops, restaurants and bars. Micro-developers, much like myself, will opt to create large shared amenity spaces because we acknowledge the return on such units. As a result, micro-renters are likely to participate in the growing gig-economy, finding tremendous utility in this concept of shared space. Each of these amenities (and more!) feed into the current flourishing ecosystem and even providing economic benefits to our landlords.
At the intersection of history and progress, the authenticity of repurposed buildings crosses paths with evolving technology. Aligning with the values of this generation and the generations to come, we hope to enrich the day-to-day lives of residents with these contemporary models. Afterall, people should be able to live large while living small.