Lisa Mailhot | January 29, 2025
Buyers
With housing affordability reaching a breaking point, developers and municipalities are turning to innovative solutions—one of the most promising being micro-units. These compact apartments, typically under 400 square feet, are designed for efficiency without sacrificing quality. As the demand for affordable, well-located rentals grows, micro-units are proving to be a game-changer in the real estate landscape.
The skyrocketing cost of rent has made homeownership and even traditional apartment rentals increasingly difficult for many individuals, contributing to what Michael Zaransky, writing for Inman, calls a 'boiling point' in the ongoing housing crisis.
One standout example is MZ Capital Partners’ 112-unit micro-unit development in Naperville, Illinois, which won an award for Multifamily Development of the Year. This project successfully combined affordability with luxury-style amenities, making it an appealing option for young professionals.
While micro-units present an attractive housing solution, zoning regulations often create roadblocks. Many cities have density restrictions that limit the number of units per square foot, making micro-unit projects financially challenging.
However, as housing shortages persist, municipalities are showing greater willingness to adapt zoning laws to accommodate micro-unit developments. Educating local authorities about the self-contained nature of micro-units—each with its own kitchen and bathroom—has been crucial in gaining support.
The misconception that micro-units resemble transient single-room occupancies (SROs) has also been a barrier. Successful projects have demonstrated that these units provide long-term, stable housing with modern designs, not temporary or low-quality accommodations.
Micro-units primarily attract:
✔ Young professionals and couples looking for affordability without sacrificing location.
✔ Urban dwellers who value walkability, nightlife, and easy access to work.
✔ Minimalists who prioritize efficient, well-designed spaces over square footage.
However, micro-units are not an ideal fit for larger families, as they are designed for single occupants or couples. Their success is dependent on being located in high-demand urban or suburban areas with strong employment opportunities and entertainment options.
Micro-units represent a smart, forward-thinking approach to tackling the housing affordability crisis. With lower rent costs, modern designs, and access to premium amenities, they provide an appealing alternative to traditional rentals. As more cities ease zoning restrictions and embrace this concept, micro-units will continue to play a vital role in reshaping the rental market.
If you’re looking to move into Orange County, let’s connect!
Reference: Michael Zaransky, "The Expanding Role of Micro-Units in Property Renting," Inman, January 28, 2025
Explore the Southern California real estate market in Q2 2025 with insights on inventory trends, price changes, and buyer behavior in cities like Corona, Costa Mesa, D… Read more
As mortgage rates drop to their lowest level in months, homebuyers are gaining more purchasing power. Discover how this shift is benefiting house hunters and what it m… Read more
California is tackling its housing crisis by rolling back the California Environmental Quality Act (CEQA), long criticized for stalling new developments. This game-cha… Read more
The housing market is experiencing some noticeable changes, from fewer new listings to a drop in buyer activity. In this blog, we dive into the latest market shifts, w… Read more
The median sales price of a U.S. home has surged to a record high of $396,500, but with more homes on the market, buyers are in a stronger position to negotiate. Learn… Read more
Mortgage applications have increased by 1.1% following a decline the previous week, signaling some shifts in the housing market. In this blog, we explore the latest mo… Read more
Many longtime homeowners in Orange County are sitting on a hidden tax burden due to outdated capital gains rules that haven’t changed since 1997. Learn how this overlo… Read more
May 2025 saw home prices at seasonal highs, but growth has nearly stalled as market dynamics shift. With more listings than buyers, slower sales, and increased negotia… Read more
Selling your home may come with a tax obligation if you earn a profit. Learn how capital gains taxes work, what exemptions may apply, and how to plan strategically to … Read more
Let's find a time that suits you best to chat about your goals, show you how we work, and figure out how we can help you the most