Small is Big for Affordable Third Chapter Living

In recent blogs, I’ve discussed the problem of housing shortages and the impact on Baby Boomers looking to rightsize. In light of the current housing market, this week’s blog returns to familiar territory but with a twist.

Some of my early columns looked at ADUs and other tiny house solutions, which are largely individual responses to the housing shortage and/or the need for small, proximate private spaces for caregivers and relatives. Now, I will turn attention to the larger real estate industry response, which is very different. A number of today’s developers are moving toward an alternative to tiny houses: tiny apartments. They are shifting the focus from home ownership to rentals in order to meet the housing needs of several generations of adults, but particularly Baby Boomers.

The Current Market

Whether you are living alone or with a spouse or partner, single-family housing is challenging. Not only can taking care of a home be difficult as health and physical abilities change, but the upkeep, insurance and taxes on a family home also can become unaffordable. And moving into a new, albeit smaller, home doesn’t always solve the problem — even if one is available!

Across the United States, from 2000 to 2022, median home prices increased 156%. Median rent prices aren’t much better, having increased 90% in the same time frame. So what to do to live our renewed, best Third Chapter?

Think Small, Really Small

More stories are popping up about developers refurbishing aging rental complexes and un-used office space, plus building new housing developments that feature two types of living arrangements: microunits and co-living. Both save money, and both come with tradeoffs — the former retains privacy but sacrifices space, and the latter sacrifices privacy for more space. But the tradeoffs can be worth it!

Microunits

Microunits typically are between 280 and 450 square feet, and include a fully functioning and accessible kitchen and bathroom. To make the units seem larger, developers may use high ceilings and oversized windows to let in more natural light and make the units seem larger. Rent in such units tends to run 20-to-30 percent lower than conventional studio and small one-bedroom units.

High-end microunit apartment buildings include such amenities as wifi, utilities, a gym on-site, and tenant events, and run slightly more money, but still below comparable regular units. Standard microunit buildings offer fewer amenities but have a lower price tag. Most developments are within walking distance to shops, drug stores, restaurants, and other activities and attractions.

As Keith Schwebel, founder and CEO of developer and builder KSNY, told nextavenue.org, the thought process is, “I’m sacrificing square footage, but it’s a rent I can afford.”

Co-Living: Saving Even More!

There are many types of co-housing arrangements, from intergenerational co-housing to co-housing for older adults only, and everything in-between. Co-living buildings are a newer, specific subgroup existing mainly in cities and large suburbs. In co-living units, you rent one of anywhere from two to four single rooms. Think clustered suites in college dorms. You have your own lease that’s not connected to any of the other leases in the space. Additionally, some 90% of co-living rooms come with private bathrooms. Rents in co-living buildings are about a third of typical studio or small one-bedroom apartments.

Most co-living units include a full shared kitchen, which often focused more on storage than on room for serious foodie cooking. The central shared living area in such dwellings has room for a dining table, sofa, and TV. The space you gain in a co-living arrangement comes with sacrificing living by yourself.

Microunit and Co-Living: Multi-Generational Appeal

In both microunits and co-living, furniture is generally supplied. As with microunits, the higher end co-living buildings include full amenities in the monthly price — wifi, utilities, possibly an onsite gym, and tenant events, for example. Standard buildings include fewer amenities but come with a more affordable price tag.

As with all housing, including microunits and co-living buildings, location makes a difference. Microunits and co-living units in major coastal cities, for example, demand a higher price than cities in other parts of the country.

From young professionals to empty-nesters and older adults, these newer, maintenance free living options are attracting followers of all ages. Particularly when moving to a new city, co-living and microunits can be a wise “transitional” move, offering affordability and convenience as you learn about your new location. Such options also provide an easier home base from which to travel, free of the worries and responsibility of home ownership. Simpler than homesharing for many, multi-generational and with flexible commitment of leasing rather than buying, these rentals are an option to keep our eye on.

Third Chapter Living celebrates, challenges, informs and promotes conversations about housing issues affecting the Baby Boomer Generation. Check out our website to learn more about our work on aging-in-place options. The author, Reese Fayde, is a dedicated problem solver and skills development coach. She’s passionate about working with change-makers — individuals committed to transforming the status quo, whether it’s in their industry, community, or organization.

1 Comments

  1. Claudia Hanlon on January 24, 2024 at 2:34 am

    Great food for thought. Thank you!

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