The micro-apartment topic tends to be framed around micro-studios. But the hefty development costs of building an NYC micro studio result in a rent which is 115% of the AMI (area median income).
The problem is studios require the same plumbing and electric work as larger units (which is why shared kitchen/bath SROs make so much sense). So developers default to building two and three bedroom units, where plumbing and electric costs can be distributed across more beds. Larger units are also seen as a more reliable unit type by lenders, probably because they can be adapted to roommates, couples, and families.
Cheaper development costs and cheaper debt mean two and three beds can be offered at cheaper price points…to an extent.
Square feet still cost money. A luxury square foot rents for around $6/month in Manhattan, which means a 900 sf two bedroom will set you back $5400. This is a good chunk of change for most.
The world belongs to the developer who can figure out how to bring new units to market without giving away $5k gift baskets.
Ranger Properties might onto to something with “The Lanes.” Their Long Island City building features 57 micro two and three bedroom apartments—490 and 735 sf, respectively (compared to 900 and 1,200 sf for more conventional units). By shrinking unit sizes, Ranger presumably achieves the economy of scale that keeps development costs low on larger units. But because units are small, they can charge a solid $/sf without elevating rents too much, especially when compared to market comps.
To illustrate, The Lanes units run anywhere from $2,500-3,950, according to Curbed. This works out to be about $5-5.30/sf. At nearby LIC Avalon towers, two and three bed luxury rentals start at $4,439 and $6,480, respectively. Because Avalon units are so much larger, this works out to be $3.60-4.46/sf. (To be fair, The Lanes is in Dutch Kills, LIC’s grubbier—albeit comparably convenient—neighbor to the north. But you get the gist.)
The Lanes is a handsome building that features amenities (roof deck, gym), big windows, and stylish interior finishes. We don’t imagine the square footage will be missed—or not missed sufficiently to discourage folks who are looking for a nice new apartment that doesn’t require selling a kidney to afford.