Several cities have jumped on the bandwagon of building Micro-apartments, a hot trend in apartment development. San Francisco and Seattle already have them. New York is testing them. Even developers in smaller cities like San Antonio and Cleveland are taking a shot at micro-apartments.
At the same time, Chicago is building lots of apartments, and is known for having low barriers to entry, yet we aren’t hearing of any new construction apartments in Chicago. Premiere studios are fetching as much as $2,000 a month. Certainly there must be demand for something more approachable to young professionals. In theory, we should expect to see Chicago leading the way in innovative small spaces.
Chicago doesn’t have an outright ban on small apartments like New York, but there are four regulatory obstacles in the Chicago zoning code that combine to effectively prohibit small apartments:
1. Minimum Average Size: Interestingly, there is no explicit prohibition of small units. This is unlike New York’s zoning which prohibits units smaller than 400sf. There is however, a stipulation that the average gross size of apartments constructed within a development be greater that 500sf. Assuming 15% of your floor-plate is taken by hallways, lobbies, stairs, etc; this means for every 300sf unit, you need one 550sf unit to balance it out.
Source: 17-2-0312 for residential; 17-4-0408 for downtown
2. Limits on “Efficiency Units”: Zoning stipulates a minimum percentage of “efficiency units” within a development. The highest density areas downtown allow as much as 50%, but these are the most expensive areas where land is most expensive. In areas traditionally more affordable, the ratio is as low as 20% to discourage studios.
Source: 17-2-0313-A for residential (20% for RT-4 to 40% for RM6.5); 17-4-0409-A for downtown (20% for D-3 to 50% for D-10+)
3. Minimum lot area: (MLA) Like much of the zoning codes, MLA serves to encourage large units for wealthy families, and discourage more affordable small-sized units. During the condo boom when 2 br condos were the most demanded type of condo, MLA was less important, and floor area ratio (FAR) dictated the scale of projects in Chicago. However, when desiring to build smaller units, MLA dictates the scale instead of FAR. Basically, there is a maximum number of units permitted on a site, based on the size of the site. ULTIMATELY this prevents micro-apartments more than the other 3 factors. Keeping the number of units on a site to a small level, prevents a developer from building micro-apartments at a reasonable density economically, and a developer building larger units will be able to pay more for the land.
4. Parking minimums: The typical person who rents a micro-apartment in a big city does not own a car, and would not need a parking space. Nonetheless, zoning dictates that a developer provide between .5 and 1 parking space for every unit. Structured parking spaces are not cheap to build, complicates design and management, hamper aesthetics, and crowd out open space. Thus, being forced to build significantly more spaces than will be used by the tenants puts a lot of economic pressure on the micro-apartment developer. (not to mention the environmental consequences of building unused and under-used spaces)
Furthermore, a micro-apartment developer with a high number of units would be required to provide on-site parking for all the units. On a constrained site, this means a developer would need to provide at least one level of structured parking, which is expensive to build, especially considering the tenants are unlikely to use the spaces.
Source: downtown: 17-10-0208
There are provisions that allow Single Room Occupancy (SRO) buildings in Chicago. It seems reasonable to conclude that a micro-apartment could be considered an SRO under the zoning code. SRO enjoys a unique categorization, which is exempt from limits on the percent of efficiency units, and are subject to very liberal parking minimums (one space per 10 units). SRO still are subject to the 500sf average and Minimum Lot Area per unit. The 500sf average unit size means the micro-apartment developer must provide a large amount of common space to get the average up, which increases the overall project budget. Furthermore the MLA requirement prevents a developer from building enough SRO units to make the land purchase economical. Thus, SRO are legal, but unlikely to compete economically.
A Chicago developer, Flats Chicago, is currently rehabbing older SROs in uptown Chicago. Redeveloping existing SROs may be the only surefire approach to providing micro-apartments in Chicago. On the downside, redeveloping existing SRO eliminates rare stock of very cheap housing much needed by the city’s poorest residents.
In the end, some major changes need to be made to Chicago’s zoning code to make apartment living more affordable. To start, my suggestion is to eliminate MLA requirements from the code, and significantly liberalize (and eventually eliminate) the parking requirements in all parts of the city. Let’s hope Chicago changes it’s ways, and takes steps towards making city life more affordable.