Development

Will tiny homes and apartments be a hit in Charlotte? These builders are betting on it

Carmel Place resident Matthew Alexander puts away dishes in his studio apartment in the Kips Bay neighborhood of Manhattan borough in New York. While micro-apartments and tiny living are common in places like New York City and San Francisco, they’re new concepts in Charlotte, where developers are betting there’s a market for people who want to live small.
Carmel Place resident Matthew Alexander puts away dishes in his studio apartment in the Kips Bay neighborhood of Manhattan borough in New York. While micro-apartments and tiny living are common in places like New York City and San Francisco, they’re new concepts in Charlotte, where developers are betting there’s a market for people who want to live small. AP

While the idea of squeezing into a “micro-apartment” with just a few hundred square feet is common in high-priced cities like San Francisco and New York, it’s a new concept in Charlotte — a Sunbelt boomtown where part of the lure is more living space for your buck.

But developers are betting that there are enough people in Charlotte interested in living small to justify building “tiny houses” and apartments not much bigger than a pair of parking spaces. Several plans are underway for developments that buck the “bigger is better” ethos, driven by both rising costs — smaller apartments and houses are cheaper — and changing resident preferences.

“I think there’s a thirst for that in the marketplace,” said David Furman, a Charlotte architect and developer planning to build 100 micro-apartments next to the RailYard office towers under construction in South End. “If you want a lot of space, there’s plenty of places for that in the suburbs.”

The units will average about 400 square feet, and construction is expected to start this fall. One of the main selling points for potential tenants will be that they can locate in the middle of one of Charlotte’s hippest neighborhoods for substantially less money.

“It’s all about trying to drive that price point down for folks,” said Furman. “The neighborhood is the amenity.”

If a 400-square-foot apartment rents for $2 per square foot, a reasonable estimate for a new building, that unit would cost $800 a month. That’s less than half the price for many new buildings nearby, where 800-square-foot, one-bedroom apartments list for $1,600 a month or more.

Small-scale living has been popularized in recent years by television shows like HGTV’s “Tiny House, Big Living.” But it’s not clear whether tiny houses and micro-apartments will catch on in Charlotte, where they haven’t really been tried on a large scale.

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Some Charlotteans are skeptical of the space-for-money-and-location equation.

“I enjoy my 2,500-square-foot, four-floor townhome,” said Cristen Miller, who works in organizational development. “Part of why I live here is it’s affordable to have space.”

Morgan McDow, a pediatric nurse, said space is more important to her.

“I would rather have space and drive to South End every day than live in the middle of everything and feel cramped,” said McDow.

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A rendering of the RailYard towers under construction in Charlotte’s South End. Rhino Market will open at the RailYard in summer 2019. RBA Group, courtesy Beacon Partners

Another caveat besides space: Small doesn’t always mean cheap. At Ascent, a gleaming new apartment tower next to Romare Bearden Park, 472-square-foot apartments start at $1,590 a month, while a 513-square-foot studio at Novel Stonewall Station, next to the light rail, goes for about $1,400.

A study by the Urban Land Institute noted that micro-apartments tend to lease more quickly and actually cost more on a per-square-foot basis than many larger units, outperforming traditional apartments. But it’s hard to tell whether that indicates a permanent trend or a trendy niche.

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Steve Sauer relaxes in the cafe area of his 182-square-foot home in Seattle. Benjamin Benschneider MCT

“The stock of very small units is still quite limited, and it is difficult to know whether the performance of these smaller units is driven by their relative scarcity or whether significant pent-up demand for micro units actually exists,” the study noted.

Charlotte real estate professionals said building well-designed residences in the middle of popular neighborhoods will be key to whether micro-living catches on in the city. While tiny apartments have spread in recent years to cities such as Washington, D.C., Austin, Texas, and Boston, they remain a sliver of the overall market.

“When an idea comes into a local or regional market, the first prototype that comes out of the ground has to be really good, or it can basically kill the idea,” said Tom Low, a Charlotte-based architect and urban planner. “If you’re out in a neighborhood with nothing in walking distance, no amenities except for open space ... there’s really not much advantage to having a tiny unit.”

Trending bigger

While tiny is trendy, the majority of apartments and houses have been going the other way for decades.

U.S. Census data shows that the average new apartment in the South built last year was 1,156 square feet — almost 10 percent bigger than in 2000.

The trend is even more pronounced in single-family homes. The average new house built in the South last year totaled 2,700 square feet, an increase of 24 percent in the past two decades.



David Walters, an architect and former director of UNC Charlotte’s master of urban design program, said he thinks tiny living will become popular in close-in, dense neighborhoods, not through “tiny homes in normal suburbia.”

“If you’ve got a tiny residence, you become like a European. You live out in the city,” said Walters. “When you’ve got very small units, you need shared public space.”

That’s part of the idea behind Charlotte-based Grubb Properties’ Link apartments, which the company has built in cities from Raleigh to Greenville, S.C.

Dan Schumacher, the company’s executive vice president of development, said Grubb decided several years ago to focus on small units in buildings with lots of amenities. The bet was that the company could offer lower rents than competitors while residents spent more time in common areas and out in the neighborhood, instead of at home in their smaller apartments.

“They’ve been extremely well received,” said Schumacher, with new buildings leasing faster than the company estimated and maintaining occupancy rates close to full. The company is planning to build 288 Link-branded apartments adjacent to its Charlotte headquarters on Park Road.

So far, the Link buildings haven’t featured true micro-apartments, just units that are smaller than average. A 602-square-foot studio is the smallest unit at their Winston-Salem building, and rent starts at $1,067. But Grubb Properties, encouraged by their success, has decided to go even smaller and recently designed floor plans for 362-square-foot units.

“The next wave of Link properties we design will incorporate these new micro-units,” said Schumacher. “We’re trying to create smaller, more efficient apartments.”

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