A small way to save on rent
If you're a renter, one way to shave your expenses is to find a smaller apartment and — hopefully — trade space for lower rent. Several new developments in the Twin Cities are aimed at people looking to live small.
At Jax, a new 65-unit building in northeast Minneapolis, the apartments are about 20 to 30 percent smaller than traditional units. Some studios have just 358 square feet; One-bedrooms, 442. But they're designed to feel bigger, with 9-foot ceilings and big windows and efficient layouts that maximize space.
“The high ceilings make it feel a lot more spacious and the windows are awesome,”said Brianne Warren, who lives in a two-bedroom unit. ”I love the floor to ceiling. It brightens up the room and it makes it feel a lot larger.”
Riley Weber's one-bedroom is a little under 500 square feet. “I actually feel like I have a lot of room just because I don't have a lot of stuff,” he said. “I just wish I had one more closet.”
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So-called micro-apartments have long existed in New York and San Francisco, and now apartment sizes are shrinking in markets like the Twin Cities, as rents march upward. In most markets, the average size of new apartments has been dropping.
In the core of the Twin Cities market, units in buildings with 50 or more apartments average 850 square feet. That's 40 square feet less than the national average, according to Yardi, which tracks real estate projects nationwide.
Yellow Tree, the company that built and owns Jax is big into smaller apartments. Co-founder Bryan Walters said a key target market is millennials willing to give up space because they don't want to pay for it.
“Our typical renter is in that mid-20s range. They're who I like to describe as the budget-conscious young professional,” he said. “And they don't want to spend $1,600, $1,800 for a one-bedroom.”
So, maybe $1,300 a month is more palatable, though certainly not what many folks would consider cheap. You'd have to make about $52,000 a year for that level of rent to be considered affordable.
Yellow Tree designed Jax with common spaces that tenants can use when they want more space. Co-founder Robb Lubenow said there's a rooftop deck with a fire pit, a fitness center, extensive bike storage and even an art studio with a kiln and pottery wheels.
“Every square foot that's in the building is going to be used by the tenant,” he said. “If not, why have it?”
Studio and one-bedroom apartments account for an increasing share of the apartments coming on the market in the Twin Cities.
“It's pretty normal to see 50 percent of your unit mix catering to a single person. That shift has been really substantial,” said Matt Mullins, vice president at Maxfield Research and Consulting. The Golden Valley-based firm provides real estate market information and market feasibility studies.
Mullins said about eight properties with micro-apartments have been built in the Twin Cities and more are on the way. They can offer owners higher rents per square foot. But Mullins said such scaled-down apartments will only fly in areas that offer coveted employment, entertainment, mass-transit and cultural opportunities. And land in such places, land is typically going to be more expensive.
“The appetite is there for more developments,” he said. “But it's very very site-specific. They need to be located in the central business district or in those very dense neighborhoods to make it work.
At City Club Apartments CBD on South 10th Street in downtown Minneapolis, about a third of the building's 307 apartments are studios. Some are as small as 360 square feet — with beds that fold up against a wall.
Sales manager Yvonne Graciano said location matters more than space for many renters.
“A lot of individuals, when they come in, they’re like, ‘You know what? This is perfect for me. I don't need any more space,’” Graciano said.
Those folks include business travelers who come to the Twin Cities so often that they find it’s smarter to rent a studio apartment than book hotel rooms.
At City Club, rents start at about $1,200 plus utilities. When the project is complete, building amenities will include an attached restaurant and brewery, 24-hour fitness center, rooftop pool and concierge services.
Studios are certainly not just for folks who are well-off. Nonprofit housing developers can accommodate more people in need of affordable housing when they build studios.
Alliance Housing's Minnehaha Commons project in Minneapolis consists of 44 fully-furnished studio apartments of about 375 square feet each. Executive director Barbara Jeanetta said it's less expensive to build studios than larger units. And tenants will treasure their rent-subsidized living quarters.
“They're moving out of a sleeping room or out of a tent under a bridge. I think this is a castle,” she said.
St. Paul-based Wellington Management has two projects that will have studios smaller than 450 square feet. One will be near the intersection of Snelling and University avenues in St. Paul. The other is at the site of the former Rainbow grocery store on Lake Street in south Minneapolis.
Executive vice president David Wellington said developers can get more rent overall out of building by making more of the units studios. But he said developers must carefully gauge consumer demand for a more minimalist lifestyle.
“We're taking a risk in thinking that demand pool is strong enough to support lease up on on those units,” he said.
For now, Wellington believes the small apartments will be a hit. Who knows? Maybe people will be drawn to even smaller living spaces. When he worked in Seattle, Wellington saw developers experimenting with so-called apodments, 250 to 300 square-foot living spaces that shared kitchens.