Would you make your home in an apartment about the size of a large hotel room? How about having a private bed and bath but sharing a kitchen and other common living space with your neighbors?
Several developers are betting those options will appeal to people who want to live in Long Beach and may be looking to downsize or find cheaper rent.
More than half a dozen projects to build more than 300 “micro-apartments” are now in the pipeline following the City Council’s decision last year to launch a pilot program soliciting smaller dwellings.
Derek Burnham, a former Long Beach city planner who is now a consultant and a partner in a development firm, is working on two micro-unit projects and two “co-living” developments with private bedrooms and shared common areas. (Those proposals are still going through the city’s approval process, so development timelines are unclear.)
The region’s desperate need for housing and the high costs of land and construction have combined to drive interest in these kinds of smaller units, Burnham said.
In the early 2000s (until the housing bubble popped around 2006), much of what was built in Downtown Long Beach was for-sale condos, and the current cycle has seen more mid-rise apartment developments, he said, but it’s getting harder to find places to build those.
“What we’re seeing now is sort of a shortage of sites for that size and scale of development, and that’s why we’re seeing this type of innovation – it works on smaller lots” and infill sites, Burnham said.
The broadening of the housing market to include micro-apartments, co-living developments, second units and even tiny homes (Long Beach is building 33 of them to help address homelessness) may offer more tools to address California’s housing shortage—and to some degree, its affordability problem.
“I think there is a kind of niche that these projects fulfill—it is another tool in the toolbox,” Long Beach Development Director Christopher Koontz said.
Before World War II, smaller homes and shared spaces used to be common living arrangements, and even today, people rent out rooms in their homes to help cover their mortgage, said Richard Green, director of USC’s Lusk Center for Real Estate.
When people consider housing costs, often “they assume people have to live by themselves, and they don’t – lots of people have shared housing,” he said.
Back in the early to mid-20th century, hundreds and possibly thousands of Long Beach residents made their homes in rooming houses and residential hotels (the old Dolly Varden was one example, and the Breakers hotel once had permanent residents as well as short-term guests).
In their heyday, rented rooms (with or without furnishings, meals, laundry and other services) were viable housing options, particularly for anyone young, single, poor or new to a city and looking for work.
But several factors came together to turn public opinion and political policy against a living arrangement critics saw as creating potential community health and safety issues, undermining family life, and even threatening the social order.
Historian Paul Groth wrote in his 1994 book, “Living Downtown: The History of Residential Hotels in the United States,” that around the turn of the 20th century, “Since large proportions of the city’s shiftless laborers, social misfits, thieves, and prostitutes lived in cheap hotels, reformers also assumed that hotel life must be an important part of the cause.”
As privately owned single-family homes became more popular, developers and social reformers promoted them as the ideal, helping shift public preferences.
(Groth’s book noted that in ruling on a 1925 land use case, California Supreme Court justices wrote, “Few persons, if given their choice, would, we think, deliberately prefer to establish their homes and rear their children in an apartment house neighborhood rather than in a single home neighborhood. … It is needless to further analyze and enumerate all of the factors which make a single family home more desirable for the promotion and perpetuation of family life than an apartment, hotel, or flat.”)
By mid-century, boarding houses and residential hotels that hadn’t closed were largely run down and didn’t get replaced. Cities began wielding land-use regulations to make such projects harder to build, said UCLA urban planning professor Paavo Monkkonen, whose grandfather’s parents met at a boarding house (he was a laborer who lived there; she worked there cleaning it).
Municipal planners established height limits and minimum unit sizes, set parking requirements and implemented public review and discretionary approvals.
Between the 1960s and 1980s, Monkkonen said, “piece by piece, city by city, over time anything but single family housing became harder to build.”
Until Long Beach city leaders changed the rules in 2020, city codes required that dwelling units be at least 600 square feet, though developers could go through a review process to drop the minimum to 450 square feet, city planning officer Alexis Oropeza said in an email.
(Before 2012, smaller units were allowed, but when combined with larger ones, the unit size had to average out across the project to a minimum of 900 square feet.)
The new micro-apartment pilot program allows units as small as 220 square feet to be built in Midtown and Downtown.
Burnham is working on projects that include apartments ranging from about 350 to a little more than 500 square feet, he said, likening them to “a good size hotel room.” (A five-story building proposed for Pine Avenue near West 9th Street would include 48 units.)
“I think there’s some general acceptance that the minimum that they have (in Long Beach) is too large,” he said. “We firmly believe that we can build a nice unit in a studio-unit size that’s very appealing and very livable for people.”
What kind of people? Dean Zander, executive vice president at multi-faceted real estate firm CBRE, described the target tenant as someone who wants to be in a walkable area near jobs, transportation and entertainment, but might be priced out of a typical apartment or condo.
It might be “a young single professional either relocating to a new city to try it out or excited to get their own place for the first time and who really wants to be in the best location but at the best, most affordable rent,” he said.
To make smaller units more attractive, developers often play up the amenities: fitness centers, bicycle parking, rooftop decks and in-unit washers and dryers.
The co-living project Burnham is consulting on will offer small apartments with private bedrooms and shared kitchens, living rooms and other common space.
It’s being planned with flexibility, so the units could be an option for families or for people who opt to get matched with roommates.
Burnham said co-living developments “seem to work well in very high-rent, very supply constrained areas,” and that anecdotally, they perform well when the units go on the market.
The micro-apartment pilot program allows developers to create up to 500 units of smaller housing. Koontz said he doesn’t expect micro-units to become typical, but the city may see a few such projects a year going forward.
“I think it holds a lot of promise, but in terms of sort of measuring results, we really have to wait until one or two of these are built,” Koontz said.
“It’s part of the solution.”
More bang for the buck?
Micro-apartments can offer a solution for developers too: More units can be squeezed into the available space, and those units can be rented at a higher price per square foot, while the overall rent “remains at a reasonable level,” Zander said.
The market for co-living projects may still grow, he said, but the concept took a hit when COVID-19 gave some people pause about sharing more spaces with strangers.
In Southern California, most of the micro-units (about 250 square feet or smaller) built in the past five years have been in Los Angeles, said Ryan Patap, senior director of market analytics at Costar Group.
According to Costar data, only a few hundred such units have been newly built since 2018, though some renovated older buildings with small units may not show up in the analysis.
How well such different types of housing catch on, and how much they help ease the housing crunch, will depend on more than just the market.
Monkkonen said changing the types of available housing is a several-step process: First regulations must change to allow something different, then developers have to try a few projects to show they can work, and finally lenders have to be convinced to finance the new options.
In Burnham’s opinion, Long Beach has taken some important steps in creating the micro-apartment program, offering density bonuses and requiring that units for lower-income families be included in new developments downtown.
“Innovation will happen to the extent that it’s not curtailed by regulations,” he said.
Zander said as the cost of living rises, developers will continue looking at alternatives to attract renters.
“It’s really all about affordability,” he said. “The best way to make the housing affordable without using government interference or programs is to make (the units) smaller.”