It is growing fast.
Micro-housing is rapidly gaining popularity across the United States, especially in Western cities, where demand for affordable living spaces is on the rise. These units are typically small rental apartments, usually under 441 square feet—similar in size to a standard studio. According to recent data from StorageCafe, San Francisco tops the nation with 15% of its rental properties being smaller than 415 square feet, and nearly a third of new micro-housing developments are currently underway there. Other cities such as Seattle, Honolulu, and Portland have also experienced double-digit growth in this type of housing over the past few years.
Doug Ressler, a housing analyst with StorageCafe, attributes this trend largely to escalating home prices and rental costs in expensive urban areas. Micro-housing offers a more affordable option, often costing around half the price of conventional apartments. These units tend to appeal mostly to younger renters—students and early-career professionals—who are looking for budget-friendly housing near major amenities like universities, shops, restaurants, and entertainment venues. Ressler explains that many of these micro-apartments come from either newly built structures or converted older buildings, such as former offices or schools.
Micro-housing also attracts seniors and people on fixed incomes, providing them with manageable rent prices and easy access to essential services. One notable development in this space is the CITYSPACE Studio in Berkeley, California, a 39-unit project featuring compact, fully furnished studios on a small lot once zoned for a single-family home. Each unit measures only 160 square feet but includes modern amenities like stainless steel appliances, communal kitchens, laundry facilities, shared outdoor spaces, and 24-hour security. While rents for this project have not yet been announced, comparable units nearby rent for around $2,000 monthly.
Regionally, the Western United States leads the country in micro-housing prevalence, with Seattle accounting for about 12% of its rental stock in this category. The majority of new rental units being constructed in the city are also micro-sized. This trend is largely driven by the premium on land in coastal cities, where maximizing living space is essential. In the Midwest, Minneapolis holds the highest share of micro-housing, with Chicago following behind, offering these units at roughly half the rent of typical apartments. In the Northeast, Newark stands out for having the greatest cost difference between micro-housing and traditional rentals. Although the South has been slower to embrace micro-housing, Miami is beginning to see growth in this sector.
Besides apartments, tiny homes—usually standalone dwellings under 400 square feet—are gaining traction nationwide. Texas leads the country with the highest number of tiny home communities, followed by states like Colorado, Tennessee, Oregon, and Georgia. Some states host numerous tiny home festivals, reflecting growing interest in this alternative lifestyle. Experts see these smaller housing options as important solutions to America’s ongoing housing shortage. Krista Evans, a planning expert at Missouri State University, emphasizes that expanding incremental housing types like accessory dwelling units and tiny homes is vital for addressing affordability, especially for working families.
Companies like BOXABL are pushing innovation further by producing modular, foldable homes designed to be affordable and quick to install. Their flagship product, the Casita, is a 361-square-foot prefabricated unit that comes fully equipped with a kitchen, bathroom, living area, and bedroom. Priced around $60,000, these homes have drawn attention from government agencies and private clients alike. BOXABL plans to expand its offerings to include larger modular homes and multi-unit buildings to meet diverse housing needs. With thousands of inquiries and orders since 2021, the company aims to make a significant impact on housing availability both in the U.S. and globally.
Overall, as housing shortages persist—with estimates suggesting a deficit of 4.5 million homes nationally—micro-housing and innovative prefab solutions represent promising ways to provide affordable, efficient living spaces for a variety of residents, from students and young professionals to seniors and low-income households.
