Small May Not Always Be Beautiful

Have you been keeping your own personal list of issues that should have received some attention in this year’s election campaigns but didn’t?

Here’s one issue you may have overlooked: America’s incredible housing squeeze.

We’re not talking here just the household budget squeeze that comes from high monthly rents and mortgages. We’re talking squeezed people.

The Carmel, New York City's first micro-housing complex

The Carmel, New York City’s first micro-housing complex

Today, in cities across the United States, more and more developers are betting they can make big bucks selling and renting outrageously tiny housing units.

How tiny? The smallest of the 144 units in The Harper, a new “micro” apartment building in Washington, D.C., take up all of 350 square feet. Over at the Moda 17, another D.C. address with micro housing, the smallest unit runs a mere 275 square feet.

In Seattle, the city where the modern micro-housing surge began in 2009, architects have seriously contemplated projects with units that average 175 square feet, about one-twelfth of the space in a typical American home.

This sort of tininess, some business leaders believe, will soon be sweeping America. Micro entrepreneurs like Jeff Wilson, the founder of the Austin-based start-up Kasita, are claiming that they stand “on the verge of disrupting the urban housing market in ways not seen in real estate and development in 150 years.”

The micro-housing industry, adds Frank Dubinsky, the developer behind the winning entry in a New York City tiny-space competition, “is just getting started.”

But many micro enthusiasts see tininess as more a movement than an industry. People today, as small-living commentator Graham Hill puts it, share a deeply felt desire for “less overwhelming lives, less space, less stuff.” Micro housing, they argue, speaks to that desire.

Other micro-housing advocates stress an environmental perspective. A 50 percent reduction in a home’s square footage, they have research to show, will cut carbon emissions 36 percent over that home’s lifetime.

Throw into the mix the wasteful financial expense of living large, activists in micro housing believe, and you have a powerful, life-affirming rationale for living small. A well-designed tiny space can liberate us from “unneeded rooms and unwelcome mortgages.”

Well, yes, tiny houses certainly do press a much smaller ecological footprint than normal-sized homes. But the romanticizing of tiny spaces can also distract us from directly confronting the intense concentration of income and wealth that poses a much more significant environmental threat.

Our contemporary rich — the beneficiaries of that concentration — live extraordinarily large. This past summer, realtors in Los Angeles were asking $149 million for a mega mansion with 50,000 square feet of living and entertaining space. Realtors in Florida at the same time were offering a 60,500-square-feet manse for $159 million and a 63,000-square-foot Miami estate for $195 million.

How many people would have to live cramped existences in tiny houses to offset the environmental footprint these huge estates stomp?

But the wealthiest among us don’t just own one huge home. They own many.

Take Michael Bloomberg, the billionaire who as mayor of New York hosted the 2012 design competition that led to the city’s first legal micro-housing complex. Bloomberg currently owns an elegant five-story limestone townhouse in Manhattan, a $25 million townhome in London, and a plush getaway in the Hamptons, not to mention three additional getaways in Bermuda, Colorado, and Florida.

The world’s billionaires, on average, own four homes each. Most of these abodes sit vacant until their owners bop on by to visit via private jet, the world’s most environmentally inefficient mode of transportation. Every hour a private jet spends aloft burns as much fuel as an average automobile uses in a entire year.

Concentrated income and wealth doesn’t just speed the environmental degradation excessive housing spaces can bring. This concentration also distorts the housing market — to the financial disadvantage of average Americans.

The basic principle we need to keep in mind: Developers follow the money. Always. Back in the middle of the 20th century, a more egalitarian time in America, that meant focusing on America’s vibrant and growing middle class.

But in recent decades, with wealth cascading into America’s upper economic reaches, developers have shifted their attention to the vibrant and growing high-end market. In a deeply unequal America, they can now make much more catering to the rich than trying to meet the needs of average families.

This shift has left average families with fewer and fewer affordable housing options. And this shortage of affordable options has, in turn, triggered price hikes on the affordable places in short supply. Average-income people, particularly average young people, find themselves unable to afford the space that average-income people four and five decades ago could handily afford.

Average folks back then had the good fortune of living in a society of growing equality. Average folks today have the misfortune of living in a society where the rich get richer at the expense of everyone else.

This story does have a somewhat sunny side — but only for developers daring and devious enough to think really small. With so many renters desperate for affordable space, these developers can now bring to market ridiculously tiny housing units and charge ridiculously high square-foot rates for them.

Carmel Place, Manhattan’s first micro-unit apartment building, has 360-square-foot apartments that rent for $2,920 a month.

A tenant in one of these recently opened units will pay $35,040 a year for “the privilege of living,” notes one recent local press analysis, in a “prefabricated shoebox, where making your bed means shoving it in and out of a wall and over your apartment’s only coffee table.”

That tenant, the analysis adds, will actually be paying rent at a higher square-foot rate than occupants of “ritzy, white-glove” apartments on Manhattan’s Billionaire’s Row.

City officials in New York are still boosting micro-housing as a future solution to the city’s affordability crisis. But micro units — if they become the wave of the future — may only make that affordability crisis worse, argues Susan Saegert, the director of New York’s Housing Environments Research Group.

The sky-high per-square-foot rents that developers can get away with charging for micro units, Saegert explains, will over time become the per-square-foot rental rate of return developers expect on all their real estate investments.

But grassroots opposition may yet slow the micro tide. In New York, citizen groups are working to keep developers from building any new apartments that run less than 400 square feet.

“People shouldn’t live in a shoebox,” as writer Fran Lebowitz has argued. “It’s not good for human beings.”

In Seattle, the national micro pacesetter only a few years ago, many local activists see tiny housing spaces as “a way for developers to pack people into buildings like sardines and overcrowd neighborhoods with new residents who aren’t part of the community.”

This hostility has translated into new city housing regulations that — developers complain — “have made it nearly impossible to build what is considered a micro-unit.”

Pressure for micro-skeptical regulation figures to build. Researchers are linking life in small, crowded spaces to stress and poor health outcomes. They’re also detailing the links between rising economic inequality and rising rents for low-income families.

We don’t, in short, need tiny living spaces. We need our biggest fortunes to be tinier.

Institute for Policy Studies associate fellow Sam Pizzigati co-edits Inequality.org. His most recent book: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900–1970. Follow him on Twitter @Too_Much_Online.

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