American housing continues to evolve as new forms of shelter arise to meet changing demographics and consumer demands.
Micro-condominium units, upscale townhouses, and high-rise towers may represent a new market twist. But that does not always mean innovative housing types will be a success in the marketplace.
“You want to push the envelope, but then there’s the question of risk and return,” said Bob Youngentob, president and cofounder of the EYA building firm based in Bethesda, Maryland.
Youngentob shared his insights on the “Best of the Best in New Residential Housing” panel at the 2017 ULI Fall Meeting in Los Angeles. The panel based the discussion on the MAYA principle—the “most advanced yet acceptable” design.
“There is a need for innovative housing,” said Adam Ducker, managing director of RCLCO, a real estate advisory firm based in Washington, D.C. He said there is a difference in cutting-edge design and new kinds of housing that represent new business opportunities that work.
Many builders are focused on creating housing that appeals to millennials and hits the lower price points that many younger people can afford.
One notable millennial-oriented product is the 28 Grand development in Detroit. The rents are affordable, with units at less than $1,000 a month, and the square footage is tiny—less than 300 square feet (28 sq m).
“It’s kind of like tip-toeing into the ‘tiny house’ movement,” said panelist Allison King, division president of Garman Homes in North Carolina.
Micro units usually “feel a lot better than a hotel room,” Ducker said, although in many case these new dwellings are hotel-room sized.
Another new type of housing that has begun to emerge is the “stacked flat.” Notable stacked flats buildings, called the Cleo at Playa Vista, have been built recently in California by Brookfield Residential. The four-story Cleo, designed by KTGY Architects, offers flats priced at over $1 million, Ducker said. Earlier this year, the Cleo received a major award from the National Association of Home Builders.