A Ryerson City Building Institute report exploring ways to solve Toronto’s affordability crisis suggests micro living could catch on in the city.
The report, called Rethinking the Tower, mused about the construction of micro units in a city dominated by condominiums. Micro units have become popular in New York City and Seattle because rental and sale prices correspond to unit size, and in a city like Toronto it could go a long way towards solving affordability issues.
“Well-designed rental or ownership micro units offer an opportunity to deliver more affordable homes to the market, particularly in central locations where land costs can be a significant barrier to affordability,” read the report. “Analyses by the Urban Land Institute (ULI) and Colliers have found that micro units in American cities lease at monthly rents 20% to 30% lower than conventional apartments, although they cost more per square foot in rent than conventional rental units.”
A micro unit is roughly 350 square feet in area and has an in-unit bathroom and kitchen, but designs is key to its marketability.
“Many developments will boast flexible furniture systems, high ceilings, large windows, built-in storage and/or convertible furniture,” continued the report. “Some have also bundled micro units with shared amenities and services such as storage, lounge, areas and outdoor space. Micro units are often marketed to young urban professionals and are likely to appeal to individuals and small households wanting to live in a central location but not able to afford to rent or purchase a larger suit.”
The ULI report quoted in Rethinking the Tower “found 25% of renters of conventional apartments surveyed in the United States would be interested in renting a micro unit.”
“Still it’s unclear whether people truly want to live in a micro space,” continued the Rethinking the Tower. “Most respondents on the ULI survey were interested in micro units as an option to lower monthly rents while living in desirable locations with good amenities, so it’s hard to say if they truly wanted a smaller space, or were driven by financial necessity. Some real estate analysts have suggested that Millennials (a target market for micro units) are not actually seeking small apartments, but are simply opting for what is available.
Tom Storey, a Royal LePage Signature Realty sales agent, believes that micro units would catch on in Toronto. Given the city’s congestion and the fact that most companies are centrally located in the city, the market for these units would be largely comprised of young professionals.
“We certainly have some units around 300 square feet in Toronto,” said Storey. “I think there’s a market for it and there would be an adjustment that the average consumer will have to come to terms with, but I’m seeing first-time buyers in Toronto who no longer care about a parking spot. They just want to be located downtown, and as long as the building has amenities and their gym and work are close, they’re happy.”
Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
