Skip to content

    As cities around the world continue to grow, the challenge of providing affordable, accessible, and sustainable housing has intensified. 

    In fact. In 2022, the US hit a new all-time low in terms of available housing inventory, clocking in at a measly 860,000 available residences. To make things more complicated, immigration is at an all-time high, with over 2/3 of 1.6 million new arrivals being a result of international migration. The point is—everyone’s crammed and it needs to stop. 

    Amidst this urban squeeze, a promising solution has emerged: micro-housing. This innovative housing concept, designed to maximize utility and comfort in minimal square footage, is not just a trend but a potential revolution in urban living. No, those aren’t the dystopian-looking sleeping pods everyone thinks of first. Let’s get into the nitty-gritty and find out what’s all the fuss about. 

    Understanding Micro-Housing

    Micro-housing units, typically ranging from 100 to 400 square feet, challenge traditional notions of residential spaces. By integrating essential amenities—kitchens, bathrooms, and sleeping areas—into compact designs, these units reimagine efficiency and sustainability in the urban fabric. 

    Far from being mere scaled-down homes, micro-apartments embody a philosophy of minimalist living, stripping down to the essentials to merge the tenets of luxury housing with functionality and space efficiency.

    Furthermore, the allure of micro-housing lies not only in its affordability but also in its design innovation. Architects and urban planners have turned spatial constraints into creative opportunities, crafting multifunctional features and employing smart technology to enhance livability. 

    How to Recognize a Micro-Housing Unit 

    Oftentimes, both realtors and buyers/sellers easily mix up micro-housing units and small apartments, sometimes even thinking they’re the same. While they’re as close as one can get when comparing types of housing, the differences are most apparent with:

    • Size: The most obvious difference is in their respective sizes. Small apartments typically range in size but are generally considered to be around 300 to 600 square feet (about 28 to 56 square meters). Micro-housing units, on the other hand, are significantly smaller, often between 100 to 300 square feet (about 9 to 28 square meters). This smaller size necessitates a greater focus on efficiency and multipurpose features.
    • Design and layout: Micro-housing units are specifically designed to maximize every inch of space, incorporating multifunctional furniture and built-in storage solutions that double as room dividers. The layout of these units is meticulously planned to ensure that the limited space serves multiple purposes. Small apartments may also utilize space-saving techniques, but they generally offer a bit more flexibility in layout and furnishing without the same degree of built-in functionality.
    • Target demographic: Micro-housing units often target specific demographics, such as students, single professionals, and people seeking affordable housing options in densely populated urban areas. These units cater to those who prioritize location and affordability over living space. Small apartments, while also appealing to similar demographics, may cater to a slightly broader audience, including small families, couples, or individuals who have a hard time deciding between housing and renting.

    The Appeal of Micro-Housing in Urban Settings

    Micro-housing addresses several urban challenges simultaneously. For residents, the lower cost of living is a clear advantage, particularly in cities where traditional housing options are financially out of reach for many. 

    The average home price in Q4 2023 was a whopping $413,000. So right off the bat, we’re not talking about generationally wealthy boomers running around in golf shirts and vacationing in the Caribbean.  

    These small-footprint homes also respond to the growing interest in sustainable living, with their reduced energy usage and emphasis on simplicity resonating with environmentally conscious individuals.

    Moreover, micro-housing developments can enrich urban communities by introducing more diverse housing options and revitalizing underutilized spaces. By integrating into existing urban landscapes, such projects can help alleviate the pressure on housing markets without the need for extensive new construction.

    Despite its benefits, micro-housing faces hurdles, as the concept is still relatively new. For the most part, both buyers and realtors are way about:

    • Limited space: The most evident challenge is the constrained living space, which can make daily activities more complicated. The limited square footage restricts the amount of furniture and personal belongings one can have, potentially impacting comfort and lifestyle.
    • Design complexity: Efficiently designing a micro-housing unit requires careful planning and innovative solutions to maximize usability and comfort within a small footprint. This often means custom furniture and built-ins, which can increase design and manufacturing complexities and costs.
    • Privacy concerns: In developments where micro-housing units share amenities like kitchens, bathrooms, and living spaces, privacy can become an issue. The balance between communal living and personal privacy is delicate and varies greatly among individuals.
    • Zoning and building codes: Many cities have zoning laws and building codes that set minimum size requirements for living spaces, which can create regulatory hurdles for micro-housing developments. Navigating these regulations can be time-consuming and costly for developers.
    • Market perception: There is still a segment of the market that perceives micro-housing as too cramped or akin to dormitory living, which can limit appeal to a broader audience. Changing this perception requires education and showcasing the innovative design solutions that make micro-housing viable and comfortable.
    • NIMBYs: Everyone knows the role that NIMBYs play in the ongoing housing crises, but their subterfuge against micro-housing initiatives has mostly been low-key. With the help of lobbyists, they’ve been successful in stalling construction as much as possible, resulting in a lack of new micro-housing units. 

    Is There a Solution? 

    Addressing quality-of-life concerns, designers are proving that small does not mean cramped or uncomfortable. Through clever layouts and communal amenities, such as shared living spaces and rooftop gardens, micro-apartments offer a balanced lifestyle that prioritizes community engagement and personal well-being.

    Likewise, it’s expected that, in the future, entire neighborhoods comprised of micro-housing units will be a reality. Not only is it easier for city planners to develop the city that way, but tenants will have better units, once that are capable of eradicating all the flaws with the current state of micro-housing. 

    The Future of Urban Housing is a Micro One 

    Looking ahead, micro-housing stands at the forefront of urban housing solutions. As technology advances, so too does the potential for these spaces to become even more efficient, livable, and desirable. Smart home technologies, for example, are enabling residents to control and optimize their living environments like never before, and even the average realtor has access to AI tools in this day and age. The future is looking bright, after all.

    But shift towards micro-housing also prompts a reevaluation of urban development strategies. By prioritizing density and diversity, cities can become more inclusive and vibrant. The success of micro-housing projects around the world offers a blueprint for sustainable urban growth, demonstrating that small-scale solutions can have a large-scale impact.


    Micro-housing represents a significant untapped potential in the quest to solve urban housing challenges. 

    By embracing this innovative approach, cities can offer more than just a place to live; they can provide a lifestyle that aligns with the values of affordability, sustainability, and community. As we look to the future, micro-housing not only offers a path forward but also invites us to reconsider what it means to make a home in the heart of the city. 

    And if your clients deem micro-housing units as interesting, an Embrace Home Loan officer is at your disposal to guide them through the purchase process. 

    Your mortgage options for a smooth journey home.

    Get expert guidance and personalized solutions for a stress-free mortgage experience.