- Seven of the top 10 cities with the highest share of micro-housing are in the West — led by San Francisco. Roughly 15% of the local housing stock in San Francisco consists of apartments smaller than 415 square feet.
- Alongside the Bay Area hub, Seattle, Honolulu, and Portland also rank high for micro-housing density, with more than 10% of the local housing stock in each city made up of undersized units.
- Seattle, WA; Boston, MA; and Newark, NJ are leading the nation in micro-housing development, with more than half of their upcoming rental units expected to be compact living spaces. In Seattle, nearly two-thirds of new rentals fall into the micro category, followed by 56% in Boston and just under 50% in Newark.
- The rent gap can be striking — in some cities, micro-units go for a fraction of what full-size apartments cost. In Irvine, CA, and Newark, NJ, average rents for conventional housing units are more than double those of micro-housing units.
Micro apartments were practical before they were cool. Once a spot-on solution for factory workers and new arrivals to big cities, they’ve evolved into a trendy lifestyle choice for recent grads, young professionals and empty nesters embracing urban living. Today, small homes offer the best of both worlds — not just aesthetic appeal, but a smart, space-efficient response to the rising demand for housing in land-strapped cities struggling to absorb waves of new residents.
But like most things in real estate, the micro-housing trend is far from black and white. Public opinion is split. While some still prefer larger homes in far-flung suburbs, many renters — including entry-level employees and downsizing couples — are gravitating toward smaller, smarter spaces in dense, walkable neighborhoods. Often designed with budget-conscious residents in mind, these compact units also reflect a broader shift toward sustainable, minimalist living. In essence, tiny apartments are increasingly seen as a way to live with less — but closer to more.
And for many, micro apartments represent a strategic choice rather than just a budget compromise. Some renters are drawn by lower price points and the appeal of amenity-rich, transit-oriented communities. For older adults or those on fixed incomes, micro-housing offers a low-maintenance lifestyle with convenient access to essential services. Whether driven by economic realities or a “less is more” mindset, small-space living is carving out a loyal — and growing — following.
Where are the smallest rental homes in the U.S.? The West now rivaled by the Midwest for micro-housing availability
Nationally, micro-housing has been making a quiet comeback. After declining in the early 2000s — when many cities favored suburban sprawl and single-family homes — its share of the rental market has been steadily climbing over the past decade. Now, with a housing crunch squeezing millions and urban lifestyles shifting toward minimalism and convenience, micro-units are enjoying a renaissance. Roughly 2.4% of newly delivered rental units in the 2020s are under 441 square feet, more than double the 1.1% share seen in the 2000s.
This new wave of micro-units has outgrown its historical roots. What once resembled the early 20th-century boarding houses — single-room occupancies designed for blue-collar workers — now appeals to a wider audience. Young professionals, empty nesters, and environmentally conscious urbanites are embracing small-footprint living as a way to minimize costs, reduce their carbon impact, and stay close to the action. In an era where space is at a premium, these tiny homes offer a compelling alternative to long commutes and sprawling suburbs.
To get a clearer picture of the micro-housing landscape in the U.S. and pinpoint where fans of tiny homes are most likely to find rental options that match their lifestyle, we analyzed housing stock data across 100 major cities. We defined micro units in a given location as rental homes with a footprint no larger than half the average apartment size in that state. Nationwide, our analysis identifies micro-housing units as those measuring under 441 square feet.
Regionally, the West leads the nation in the share of micro-housing, followed by the Midwest and the Northeast. Cities like San Francisco, Seattle, Honolulu, and Portland are fully embracing the micro-housing trend with small homes making up over 10% of their local inventories. These places have long struggled with sky-high housing costs and limited space, so micro-apartments have become a practical, appealing alternative.
Of course, living small doesn’t mean living without — and that’s where self storage comes in. As urban housing evolves, the self storage industry has kept pace, offering flexible, affordable space that complements micro living. Whether it’s for seasonal clothes, hobby gear, bikes, or anything else you can’t part with, storage units are the offsite closets making compact living more manageable.
Below, we’ve mapped the largest U.S. cities by their share of micro apartments and tiny homes — with a note on where self storage is available to help maximize every square foot.
West Coast cities lead the micro-housing movement
San Francisco’s high population density and competitive rental market set the stage for a micro-housing movement that’s been gaining momentum for years. While the shift initially polarized residents, the city has since embraced tiny living in a big way. Today, nearly 15% of all housing units in San Francisco are considered undersized, with some measuring as little as 124 square feet — making it the undisputed micro-housing capital of the U.S.
The city’s commitment to compact living is only growing. Roughly 28.8% of its new rental stock scheduled to come online is made up of micro-units, a number which represents 0.73% of the city’s total housing inventory — a notable footprint for a housing type that was once considered too radical for large-scale adoption.
Projects like the CITYSPACE Studio development, now nearing completion in nearby Berkeley, are reinforcing the appeal of this approach. Built on a 5,000-square-foot lot — originally zoned for a single-family home — the development features 39 micro-studios, each just 160 square feet. The project demonstrates how small urban parcels can yield high-density housing without the need for towering structures. “It’s high-rise density in a low-rise building,” explains Patrick Kennedy, CEO of Panoramic Interests* — and at a fraction of the cost that cities like San Francisco and Los Angeles typically spend on supportive housing.
While affordability and density remain the key drivers behind micro-housing, its value as a tool for addressing homelessness and workforce housing shortages is becoming increasingly evident. The CITYSPACE model, for example, is seen as a viable solution for entry-level workers and unhoused residents, offering dignity and independence in a self-contained, well-designed space.
Still, scaling micro-housing remains a regulatory challenge. Many cities have outdated zoning codes or restrictive minimum size requirements that make such developments nearly impossible. “The regulatory thicket in most cities is an insurmountable barrier,” says Kennedy — although Berkeley stands out as a notable exception, thanks to its forward-thinking policies and support from local buildings and fire departments. Other municipalities, he notes, are beginning to take notice.
As housing shortages intensify, San Francisco and its neighboring cities may serve as blueprints for how micro-housing can help relieve pressure on urban housing markets — not as a silver bullet, but as a practical, scalable solution that makes better use of space, land, and budgets.
Seattle has also emerged as a national leader in micro-housing, with undersized units now accounting for approximately 12% of the city’s total housing inventory. That number is poised to grow further: roughly 66% of rental units currently under construction fall into the micro-housing category, reflecting the city’s increasingly compact approach to residential development.
This shift is part of a broader strategy to tackle rising housing costs and growing population density. In 2024, the city adopted sweeping zoning reforms aiming to accommodate 120,000 new housing units over the next two decades. These changes permit micro-unit developments in all areas zoned for multifamily housing, a move designed to increase housing diversity and supply across the city.
Now, while many cities in the Pacific West have been consistently increasing their micro-housing supply decade by decade over the past 40 years, Honolulu made a big jump in new construction only in the 2020s — during this time, undersized units have made up 27% of its new rental supply. Plus, Hawaii has the smallest average rental unit size in the country — just 697 square feet across all unit types. With nearly 12% of Honolulu apartments measuring less than half that size, the Polynesian city stands out as a major player in the world of micro-housing.
While the West embraces micro-housing, mountain cities prefer larger homes
While micro-living is gaining traction in the Pacific region, the trend is far less prominent in the Mountain West. Cities like Gilbert, AZ, Santa Clarita, CA, and Henderson and Enterprise in Nevada stand out for their preference for spacious living, boasting some of the largest average unit sizes in the country.
In fact, the smallest unit overall in Enterprise clocks in at 735 square feet — enough space to fit six of Seattle’s most compact apartments, with room to spare. With plenty of open land and fewer people per square mile, the Mountain West just makes it easier — and a lot more affordable — to build sprawling developments compared to crowded urban centers.
The Midwest bets big on small spaces to bring people downtown
The Midwest offers a lot of highlights in what micro-housing can mean to American cities. For instance, Chicago’s micro-units rent at nearly half their conventional counterparts, which opens the door to many young people that may want to start a new in the big city. And given the city’s high population density, smaller living is likely to continue going strong into the future.
Minneapolis is leading the Midwest in the adoption of micro-housing, with undersized units now making up 10.4% of the city’s total rental inventory — the highest share in the region. That number is expected to climb, with micro-units projected to account for 20% of the city’s upcoming rental supply.
Local officials and developers are turning to single-room occupancy units as a key strategy to address the ongoing housing crisis. At the same time, micro-housing is gaining popularity among young professionals drawn to affordable living near the city center. In Minneapolis, some units are as small as 100 square feet, reflecting a broader trend toward compact, cost-effective urban living.
Cleveland is following a similar path, as its downtown revitalization over the past several years has drawn in new residents — and with them, increased demand for smaller, centrally located rentals. The city is now looking to micro-housing as a solution to maintain housing affordability in its booming urban core. Meanwhile, just outside the city, Cleveland Heights is exploring zoning changes that would allow tiny homes in residential backyards, highlighting a regional shift toward more flexible, space-conscious housing options across both urban and suburban communities.
Demographics seem to play a key role in the Midwest’s growing affinity for micro-housing. Cities like Minneapolis, Chicago, and Cleveland all have sizable young adult populations, but Madison, WI, stands out with the highest share of Gen Z residents among major U.S. cities — roughly 34%.
It’s also worth noting that some Midwestern cities that are big on micro-housing also offer lower rents than usual for micro-units. Wichita, KS, which built most of its small homes before the nineties, has the lowest micro-unit rate among the largest cities: a mere $570 a month — 61% less than the average for conventional units. Wichita units don’t go lower than 300 square feet, this may be quite a convenient scenario for renters who are content with smaller places right now.
The Northeast leans into micro-housing as a city-living solution, driven by population density
In the packed cities of the Northeast — think New York, Philadelphia, and Newark — micro-apartments are quickly becoming an urban staple. These cities have long been dense and expensive, and with housing shortages pushing rents even higher, smaller units are offering a much-needed reprieve.
It’s worth noting that all three cities — NYC in particular — have had their share of micro-units for over a century, including tenement apartments that measured between 300 and 400 square feet.
From an affordability standpoint, Newark stands out for having one of the largest rent gaps between micro-units and conventional apartments — renters can expect to pay about 50% less for a micro-unit. However, despite this affordability advantage, very few new micro-units have been built in recent decades, and almost none in the past 10 years. This suggests that most of Newark’s micro-housing stock is older, likely dating back to earlier eras of development rather than being part of a modern push for small-space living. The city’s plan to add another 151 units marks a potential shift — one that could revitalize its role in the growing micro-housing movement.
It helps, too, that cities are getting more creative with zoning and design. Projects like New York’s Carmel Place show how smart layouts — think high ceilings, convertible furniture, and big windows — can make small spaces feel surprisingly comfortable.
And with land and construction costs stubbornly high, efficient housing models like this are increasingly crucial. While some skeptics worry about quality of life in such tight quarters, the steady rise of micro-apartments in the Northeast proves they’re hitting a sweet spot: keeping city living accessible while helping ease the housing crunch.
It’s also worth noting that all metropolises in the Northeast rank among the top 40 cities for micro-housing.
The South hesitates hopping on the micro-housing wagon
Not all cities are embracing the movement at the same pace. While some have recognized the benefits of adding compact homes to their rental stock, others are lagging — constrained by zoning laws or public resistance.
Micro-housing, with its compact and efficient design, has yet to find a strong foothold in the Southern U.S., largely due to the region’s cultural norms, economic realities, and urban planning trends. In cities like Plano, TX, and Fort Worth, TX, micro-units are virtually nonexistent. Gilbert, AZ also lags in offering small-space options for renters.
To get a better grasp on why the South loves big homes, it’s helpful to look toward history. In the post-WWII suburban boom, the South and West embraced the rise of ranch-style homes, with their sprawling layouts and open designs that captured the era’s dream of roomy, family-friendly living. This interplay of real estate and culture has become baked into the South’s vision of what a home should be.
Still, Miami, FL, managed to crack the top 20 large cities for micro-housing, as public opinion has been favoring building smaller units in the face of the city’s continued apartment shortage. Not only has this densely packed city made strides in the construction of tiny homes in the past few years, but it’s also slated to expand its inventory of micro-units this year. Here, the smallest units are 180 square feet.
Where is micro-housing headed: Cities adding most undersized homes
While small victories have been scored across the U.S. — mainly through pilot programs and innovation zones — micro-units remain far from mainstream. Many cities still grapple with zoning laws and building codes that restrict high-density, multifamily development, which micro-housing typically falls under.
Seattle is one of the few trailblazer cities actively pushing for micro-unit construction, with undersized units making up a remarkable 66% of new housing currently under construction or planned for delivery. The city is tackling its housing shortage head-on, and its density-focused development plans appear to be steadily moving forward.
Boston, Reno, Portland, and San Francisco have also embraced pilot programs or zoning updates to support micro-housing. In Boston, the trend began gaining traction in 2016 when the city’s Housing Innovation Lab launched a traveling model micro-apartment, showcasing it in eight neighborhoods to demonstrate the potential of small-space living. Enthusiastic public feedback led to the launch of a compact-living pilot program in 2018. Today, 3.5% of units fall under the micro-housing category, with sizes below 413 square feet. And the number is only set to grow, as undersized units take up 56% of Boston’s new rental housing pipeline. If the trend continues, micro-units are poised to become a staple of Boston’s housing landscape.
Reno, NV, has also made notable progress in expanding its micro-housing stock, which now accounts for 7.7% of the city’s overall rental inventory. The city made headlines several years ago when it approved an infill project that transformed a former downtown parking lot into a cluster of 10 tiny homes. Since then, the compact-living trend has continued to grow, reshaping Reno’s urban housing landscape.
Looking ahead, more than 40.5% of the city’s upcoming rental supply is expected to consist of micro-housing — a sign of Reno’s growing commitment to small-footprint development as a strategy for meeting evolving housing needs.
Below is a full ranking of the largest U.S. cities actively expanding their micro-housing inventory.
Beyond the front door: Self storage soars
Small living space doesn’t mean small living. Sure, you need space for hobbies and bulky or sentimental items. And that’s where self storage can be of great help. It’s not about giving things up — it’s about getting smart with your space. Self storage lets you keep the things that matter without cluttering your everyday living area.
Self storage is generally inexpensive and offers extra square footage at much cheaper rates than residential space. That’s what you find in capitals of compact-living such as Tucson, AZ, a city whose healthy supply of self storage keeps rates at a relatively affordable $109. Cleveland is similar, with a self storage inventory right around the national average and rents at $114. Minneapolis and St. Paul, MN, are other micro-housing capitals where storage rents hover below that average rate.
Self Storage Rates and Availability Across Biggest U.S. Cities
| Rank | City | State | Avg. Rent ($) | Self Storage Sq. Ft./ Capita |
|---|---|---|---|---|
| 1 | Oklahoma City | OK | 87 | 8.7 |
| 2 | Memphis | TN | 88 | 8.19 |
| 3 | Greensboro | NC | 93 | 11.14 |
| 4 | Omaha | NE | 94 | 7.3 |
| 5 | Indianapolis | IN | 96 | 6.76 |
| 6 | Cincinnati | OH | 99 | 4.13 |
| 6 | Fort Wayne | IN | 99 | 7.18 |
| 8 | Bakersfield | CA | 101 | 9 |
| 8 | Toledo | OH | 101 | 4.43 |
| 8 | Columbus | OH | 101 | 4.43 |
| 8 | Arlington | TX | 101 | 5.86 |
| 12 | Tulsa | OK | 102 | 8.99 |
| 13 | Winston Salem | NC | 103 | 7.93 |
| 14 | Milwaukee | WI | 104 | 3.76 |
| 14 | Fort Worth | TX | 104 | 6.45 |
| 16 | Louisville | KY | 107 | 7.43 |
| 17 | Wichita | KS | 108 | 6.8 |
| 17 | Lubbock | TX | 108 | 16.94 |
| 17 | Chesapeake | VA | 108 | 6.61 |
| 20 | Tucson | AZ | 109 | 8.53 |
| 20 | Mesa | AZ | 109 | 5.9 |
| 22 | Colorado Springs | CO | 110 | 11.17 |
| 23 | Glendale | AZ | 111 | 2.96 |
| 23 | Durham | NC | 111 | 9.47 |
| 23 | Irving | TX | 111 | 6.8 |
| 26 | Cleveland | OH | 114 | 2.27 |
| 26 | Raleigh | NC | 114 | 7.33 |
| 26 | Corpus Christi | TX | 114 | 11.54 |
| 26 | Garland | TX | 114 | 3.93 |
| 30 | Lincoln | NE | 115 | 6.79 |
| 31 | El Paso | TX | 116 | 6.26 |
| 31 | Norfolk | VA | 116 | 5.24 |
| 33 | Boise | ID | 117 | 12.1 |
| 34 | Albuquerque | NM | 118 | 7.5 |
| 35 | Chandler | AZ | 119 | 4.49 |
| 35 | Plano | TX | 119 | 5.45 |
| 35 | Gilbert | AZ | 119 | 4.01 |
| 38 | Kansas City | MO | 120 | 3.62 |
| 38 | Charlotte | NC | 120 | 7.23 |
| 40 | San Antonio | TX | 121 | 9.24 |
| 40 | Virginia Beach | VA | 121 | 10.62 |
| 42 | Minneapolis | MN | 122 | 2.05 |
| 42 | St. Paul | MN | 122 | 3.29 |
| 42 | Stockton | CA | 122 | 6.75 |
| 42 | Richmond | VA | 122 | 5.75 |
| 46 | Phoenix | AZ | 123 | 5.48 |
| 46 | Newark | NJ | 123 | 0.91 |
| 46 | Aurora | CO | 123 | 4.07 |
| 49 | Houston | TX | 125 | 6.85 |
| 50 | Baltimore | MD | 126 | 3.76 |
| 51 | Spokane | WA | 127 | 7.3 |
| 51 | Pittsburgh | PA | 127 | 3.57 |
| 51 | Orlando | FL | 127 | 7.02 |
| 54 | Madison | WI | 128 | 4.58 |
| 55 | Las Vegas | NV | 129 | 7.6 |
| 56 | Reno | NV | 130 | 14.28 |
| 56 | Saint Louis | MO | 130 | 4.74 |
| 56 | Fresno | CA | 130 | 7.04 |
| 59 | Austin | TX | 131 | 7.77 |
| 59 | Dallas | TX | 131 | 5.15 |
| 61 | Buffalo | NY | 132 | 1.54 |
| 61 | North Las Vegas | NV | 132 | 4.67 |
| 61 | New Orleans | LA | 132 | 4.55 |
| 64 | Jacksonville | FL | 133 | 9.74 |
| 65 | Chicago | IL | 134 | 3.46 |
| 65 | Denver | CO | 134 | 3.39 |
| 67 | Tampa | FL | 135 | 6.94 |
| 67 | Henderson | NV | 135 | 6.64 |
| 69 | Lexington | KY | 136 | 8.31 |
| 70 | Riverside | CA | 138 | 5.7 |
| 71 | Detroit | MI | 143 | 0.93 |
| 71 | Nashville | TN | 143 | 6.57 |
| 73 | Philadelphia | PA | 144 | 3.36 |
| 74 | Sacramento | CA | 147 | 4.94 |
| 75 | Atlanta | GA | 148 | 4.49 |
| 76 | Portland | OR | 152 | 4.28 |
| 77 | St. Petersburg | FL | 164 | 5.8 |
| 78 | Washington | DC | 169 | 2.18 |
| 79 | Santa Clarita | CA | 175 | 4.91 |
| 80 | Miami | FL | 176 | 3.82 |
| 81 | Fremont | CA | 177 | 3.4 |
| 81 | Chula Vista | CA | 177 | 3.64 |
| 83 | San Diego | CA | 178 | 4.07 |
| 84 | Seattle | WA | 179 | 3.95 |
| 84 | Irvine | CA | 179 | 5.03 |
| 86 | Anaheim | CA | 181 | 1.49 |
| 87 | San Jose | CA | 187 | 3.93 |
| 88 | Scottsdale | AZ | 188 | 8.37 |
| 89 | Jersey City | NJ | 189 | 1.23 |
| 90 | Oakland | CA | 200 | 2.44 |
| 90 | Boston | MA | 200 | 0.7 |
| 92 | Santa Ana | CA | 201 | 1.58 |
| 93 | Long Beach | CA | 203 | 2.03 |
| 94 | New York | NY | 204 | 2.41 |
| 95 | Anchorage | AK | 224 | 6.35 |
| 96 | San Francisco | CA | 245 | 2.08 |
| 96 | Arlington | VA | 245 | 1.16 |
| 98 | Los Angeles | CA | 249 | 2.1 |
| 99 | Honolulu | HI | 296 | 3.32 |
Conclusion
As housing pressures intensify, micro-housing has emerged as a practical solution in many U.S. cities. Leading the way, Western hubs like San Francisco, Seattle, and Honolulu have adopted compact living to boost affordability and mitigate space constraints. Meanwhile, cities in the Midwest and Northeast are following suit, especially as they integrate micro-units into efforts to revitalize their downtown areas. Though the South remains more hesitant, a few cities are beginning to develop their share of undersized homes.
Top 100 cities for micro-housing in the U.S.
Check out how the largest cities fare in terms of micro-housing the U.S.:
What the experts are saying
For further insights into the rise of micro-housing, we turned to industry experts.
Patrick Kennedy, Owner of Panoramic Interests
Do you see micro-housing as a viable solution to today’s housing shortages?
Absolutely. Micro-housing offers a highly effective solution, particularly in the areas of supportive housing for the homeless and entry-level workforce housing in urban centers.
We’re currently completing a 39-unit CITYSPACE® Studio apartment project in Berkeley, with each unit measuring just 160 square feet. These compact studios are ideally suited for individuals starting out in the city or those transitioning out of homelessness.
Is the push for micro-housing primarily about affordability, or are there other drivers like density or sustainability?
Affordability and density are the two primary drivers — and they go hand in hand. We are building 39 units on a single-family home lot of 5,000 SF — which is high rise density in a low-rise building (4 stories). It also shows that smaller urban lots can produce big results with micro-housing. We are also building these for 1/2 to 1/3 the cost of what cities like San Francisco or Los Angeles are spending to provide new supportive housing.
What are the main challenges — whether regulatory, social, or design-related — that come with expanding micro-housing?
The regulatory thicket in most cities is an insurmountable barrier to building micro-housing like this, but Berkeley is a welcome exception, embracing innovation and progressive solutions. We are also blessed with an enlightened Building and Fire Department. Other cities are beginning to wake up to the need to follow their example.
Brad Hargreaves, Founder & Editor-in-Chief at Thesis Driven
Do you see micro-housing as a viable solution to today’s housing shortages?
Micro-housing can and should be a part of the housing market. They can be a great option for a wide variety of renters, from recent graduates to recent divorcees and young couples to people who are simply comfortable in smaller spaces.
Is the push for micro-housing primarily about affordability, or are there other drivers like density or sustainability?
Affordability is clearly a big part of the story. There is a segment of renters who simply don’t need as much space and are willing to trade that space for lower rent. There’s no reason the government should tell these people they shouldn’t be able to make that choice, so I’m an advocate of legalizing micro-apartments as well as even smaller SRO-style units for renters who want them.
But policymakers should pair this with broader zoning reforms, including the removal of FAR (Floor Area Ratio) and height limitations. It’s one thing to allow someone to choose to live in a smaller unit; it’s another thing to effectively force them to do so by limiting the number and size of units that can be built.
What are the main challenges — whether regulatory, social, or design-related — that come with expanding micro-housing?
Micro-units — defined as units under 400 square feet in size — are illegal to build in most cities in the United States. Where they are allowed (e.g., Seattle and DC) they tend to be very popular and contribute to housing affordability.
But regulatory constraints put limits on how affordable they can really be. SRO-style units with shared kitchens are even harder to build, but in many micro-units the legally required kitchen and appliances — which often get very limited use by micro-apartment residents — take up a huge percentage of the unit and drive up construction costs.
David Neiman, Partner at Neiman Taber Architects
Do you see micro-housing as a viable solution to today’s housing shortages?
Yes, absolutely. Micro-housing is one of the most efficient tools we have to create more housing quickly and affordably, especially in urban areas where land is scarce, and demand is high. In Seattle, we’ve built about 10,000 micro-housing units over the past decade — renting at rates affordable to people making 40%-60% AMI (Area Median Income) — without relying on public subsidies. It’s not a silver bullet, but it plays a critical role in expanding the supply of low-cost, market-rate housing, especially for individuals and couples.
Is the push for micro-housing primarily about affordability, or are there other drivers like density or sustainability?
Affordability is a major driver, but it’s not the only one. Micro-housing allows us to make more efficient use of existing land and infrastructure. That translates into higher density, which supports walkability, transit, and the kind of sustainable, compact urban form that benefits the planet and people alike. It allows people of modest means to live closer to work, school, culture, or any of the myriad opportunities a city has to offer.
What are the main challenges — whether regulatory, social, or design-related — that come with expanding micro-housing?
The biggest challenges are often regulatory. Many zoning codes still assume that “bigger is better,” and impose minimum unit sizes, maximum occupancy limits, or onerous parking requirements that make micro-housing infeasible. There can also be public resistance — people often associate small units with transience or decline, when in fact micro-housing can be a thoughtful, dignified solution for people who simply need a smaller footprint and a lower rent. For a designer, the challenge is creating spaces that are compact but still feel livable, with good daylight, sound separation, and access to generous shared amenities that supplement the private units. From an operations perspective, there are a lot of common areas to manage and maintain. Keeping common kitchens clean and stocked and in good working order is a challenge for management and requires good citizenship from the residents.
Keith Schwebel, CEO of KSNY
Do you see micro-housing as a viable solution to today’s housing shortages?
Yes, of course, by definition, you get much higher density (i.e. more apartments) per allowable building envelope. Additionally, micro apartments typically enjoy 20-30% lower monthly rents than comparable neighboring apartments.
Is the push for micro-housing primarily about affordability, or are there other drivers like density or sustainability?
In addition to affordability, density and sustainability, micro apartments allow tenants to live in more central locations than they would otherwise be able to afford. There are also some tenants that seek out micro apartments because they value simplicity and minimalism, and spending money on experiences over things.
What are the main challenges — whether regulatory, social, or design-related — that come with expanding micro-housing?
Many locations, like NYC, for example, have density requirements that are too big for micro apartments. On another note, we do feature storage lockers at our micro apartment property in Jersey City.
Doug Ressler, Business Intelligence Manager at Yardi Matrix
What factors make certain locations ideal for micro-housing?
Several key factors contribute to the success of micro-housing in specific locations, with proximity to universities and healthcare facilities being among the most influential. These institutions create a steady and reliable demand for housing from students, faculty, and healthcare professionals — all of whom often seek affordable, conveniently located living options close to campus or work.
Neighborhoods near universities and hospitals also tend to command higher property values and rental rates due to this consistent influx of residents. For developers, this translates into a lower-risk investment with strong long-term appeal.
In addition to demand, these areas are typically well-equipped with community amenities such as public transit, dining, and recreation — features that enhance livability and make compact units more desirable. Micro-housing in these environments can offer both affordability and access, without sacrificing quality of life.Another key benefit is sustainability. Living closer to school or work significantly reduces the need for long commutes, lowering both transportation costs and environmental impact. For many renters — especially those with eco-conscious priorities — this convenience is a major draw.
Ultimately, locations anchored by universities and healthcare centers provide the right mix of economic stability, infrastructure, and lifestyle perks, making them prime spots for successful micro-housing development.
Methodology
This analysis was conducted by StorageCafe, an online platform offering nationwide listings for storage units.
The study examined the 100 most populous U.S. cities, based on 2023 American Community Survey 1-Year Estimates. Cities were ranked according to the percentage of undersized housing units for rent, defined as rental homes smaller than half the average size of all housing units in their respective state.
Data on housing and self storage comes from Yardi Matrix, StorageCafe’s sister division and a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self storage sectors.
Fair use and distribution
This study serves as a resource for the general public on issues of common interest and should not be regarded as investment advice. The data is true to the best of our knowledge but may change if amendments to it are made. We agree to the distribution of this content but we do require a mention in return for attribution purposes.
