Why We Can’t Build Family-sized Apartments In North America

[Steely Dan]

Originally Posted by Obadno

Why would you spend 5,000 a month on a 2000sqft 4 bed 2 bath apartments when you could spend 3200 a month on a mortgage for 3000sqft 5-bedroom house Wirth a yard and a garage with a 15-minute commute?

I dunno, why does anyone do anything?


My cousin and I both bought homes for our young families here in chicagoland around the same time roughly 6 years ago.

He bought a gigantic 4,500 SF 5 bed/4.5 bath vinyl mcmansion on a 1/2 acre lot in a cornfield 45 miles out in bumblefuck.

I bought a more modest 2,300 SF 3 bed/3 bath condo in a brick 3-flat in chicago's awesome Lincoln Square neighborhood.

Our purchase prices were within 3% of each other.

We'd both tell you that we're EXTREMELY happy with the housing choices we made.



But he's wrong and I'm right, obviously

[benp]

Originally Posted by JManc

Consider the population and the socioeconomic make up of much if Houston; poor/ working class areas with very little new development other than a strip mall here and there. Inner Loop is getting lots of new/ dense development but out of reach for most people.

Typical newer apartment developments in Katy, suburb of Houston, one of the fastest growing area in the US.
https://goo.gl/maps/2Uy4rRvxu5xb9Bvg8

That's basically at least 90% of all new apartments in Houston.

[TWAK]

Originally Posted by mhays

Developers know what things cost, and there's good precedent for rents and sale prices. Three-bedroom units tend to lose money.

Seattle trades extra height and other considerations for more three-bedroom units. Some developers do take the leap, but this tends to be only because of the trade.

So that's why there generally is none, unless they are condos.
I have lived in maybe 8 or so apartments/complexes and I think only one had 3 br, but that's just an assumption since it looked like it might have some.

[Wigs]

Originally Posted by Steely Dan

Ugh, the dreaded suburban garden-style apartment complex.

Preferably with those godawful '70s brown shingle mansard roofs.


The density of the city, with absolutely none of its locational/connectivity advantages!

Where do I sign up?

I forget who it was but they coined the term Pizza Hut village to deride the looks of these types of buildings

[38 Geary]

Originally Posted by benp

Typical newer apartment developments in Katy, suburb of Houston, one of the fastest growing area in the US.
https://goo.gl/maps/2Uy4rRvxu5xb9Bvg8

That's basically at least 90% of all new apartments in Houston.

Wow, I don't think I've ever seen that much flat open space before. No hills or mountains in the immediate or far off distance. Closest is the Central Valley but even then you can see mountain ranges in the distance.

[Obadno]

Originally Posted by Steely Dan

I dunno, why does anyone do anything?

But he's wrong and I'm right, obviously

Thats my point the only place where you could realistically have a "family sized apartment" with a sizeable population interested is NYC

Even other very dense cities like SF, Seattle, DC Boston, if you have the money for a large spacious apartment, you have the money for an equally or more spacious home without needing to be an hour away.

So there really isn't much of a market for "Family sized apartments." as of they rarely get built outside of Manhattan. I would bet even then you are talking about very limited very exclusive market.

[benp]

Originally Posted by Obadno

Thats my point the only place where you could realistically have a "family sized apartment" with a sizeable population interested is NYC

Even other very dense cities like SF, Seattle, DC Boston, if you have the money for a large spacious apartment, you have the money for an equally or more spacious home without needing to be an hour away.

So there really isn't much of a market for "Family sized apartments." as of they rarely get built outside of Manhattan. I would bet even then you are talking about very limited very exclusive market.

You of course are speaking primarily of market rate apartments. There are also many new family-sized subsidized and limited income apartments built in cities.

[Steely Dan]

^^ I recently worked on a market-rate MFH project that consisted of (22) 3 & 4-bedroom units in an American city not named NYC.

So......... yeah........

[sopas ej]

Originally Posted by benp

Typical newer apartment developments in Katy, suburb of Houston, one of the fastest growing area in the US.
https://goo.gl/maps/2Uy4rRvxu5xb9Bvg8

That's basically at least 90% of all new apartments in Houston.

Oh that looks dreadful. Looks like a prison. Next to something called Gringo's, and Harris County BBQ.

[TWAK]

Originally Posted by sopas ej

Oh that looks dreadful. Looks like a prison. Next to something called Gringo's, and Harris County BBQ.

Hah, can get buildings like that in Cities Skylines to make the ugliest possible suburb.

[MonkeyRonin]

Originally Posted by Obadno

Even other very dense cities like SF, Seattle, DC Boston, if you have the money for a large spacious apartment, you have the money for an equally or more spacious home without needing to be an hour away.

So there really isn't much of a market for "Family sized apartments." as of they rarely get built outside of Manhattan. I would bet even then you are talking about very limited very exclusive market.

That's part of the point though - with better designed plans, 3+ bedroom apartments could fit into smaller square footages and therefore be cheaper to build (and/or have more usable layouts, making them more desirable).

Part of the problem in many major cities is that family-sized houses aren't affordable right now, and there aren't really any options available inbetween them and small 1/2-bedroom condos; with larger units tending to be a niche, luxury product. Building more family-sized apartments is an important ingredient in allowing middle-class families to stay in cities (the missing middle).

[Architype]

Originally Posted by MonkeyRonin

That's part of the point though - with better designed plans, 3+ bedroom apartments could fit into smaller square footages and therefore be cheaper to build (and/or have more usable layouts, making them more desirable).

Part of the problem in many major cities is that family-sized houses aren't affordable right now, and there aren't really any options available in between them and small 1/2-bedroom condos; with larger units tending to be a niche, luxury product. Building more family-sized apartments is an important ingredient in allowing middle-class families to stay in cities (the missing middle).

In Vancouver, 3 bedrooms will cost about $5000 per month, so this market segment is only available to higher income renters or buyers.

https://www.zumper.com/apartments-for-rent/vancouver-bc/3-beds

Rental apartments have always been geared to singles, couples, roommates, or small families. Of all the apartments (& condos) I've seen, even in higher end buildings, most have been studio, or one or two bedrooms. Studios and one or two bedrooms have always been more lucrative per square foot for developers. Our increasing costs now make SFH ownership unaffordable, so larger families are squeezed into a market not designed for them. Developers need more incentives to build large units. I think some effort is being put into making higher density more available for families, with such things as daycares and schools being built into buildings in higher density areas, but these efforts take so much time in planning and development, that they are usually hopelessly inadequate. IMO, childless renters or owners, regardless of age, prefer not to be living among noisy kids, so in this regard there is an even greater design challenge. To ensure marketability, new units use a lot of the available space on ensuites and storage space, etc., in planning for families, this space could be used for a third bedroom.

[mhays]

Even a crying baby isn't as loud as a barking dog. Those are the real problem (or they are for those without effective HOAs like mine!). In a concrete building you don't normally hear people at all, just the occasional barking before a crackdown.

[Obadno]

Originally Posted by benp

You of course are speaking primarily of market rate apartments. There are also many new family-sized subsidized and limited income apartments built in cities.

Families might live in them but I would not call them “family sized”. There is a difference

I don’t know of many projects building spacious 3+ bedroom units anywhere they are few and far between

[strongbad635]

I manage an apartment community in suburban Houston, TX. Our community is about 40% 1-bedrooms, 40% 2-bedrooms, and 20% 3-bedrooms. By far, the units that are leased the quickest are the 3-bedrooms. They go for a higher price per square foot, residents renew at higher rates, and accept higher increases at renewal. We get calls every day from families searching for an affordable 3-bedroom or even 4-bedroom apartment. I call our comps every week, their situations with 3-bedroom apartments are similar because we are all chasing those families who need 3 bedrooms and 1400 square feet, but don't give a fig about having a yard or sharing walls with their neighbors. And this isn't in Manhattan, or even the Galleria. It's in Westchase, a humdrum 1980s suburb 15 miles away from downtown.

If you only know families who want to live in single family homes and abhor apartments, then you're just living inside a bubble. They're out there. They live in every major metropolitan area. I grew up in one. They just aren't seen by upper class people who live in McMansion Cupcake land.

[Obadno]

Originally Posted by strongbad635

I manage an apartment community in suburban Houston, TX. Our community is about 40% 1-bedrooms, 40% 2-bedrooms, and 20% 3-bedrooms. By far, the units that are leased the quickest are the 3-bedrooms. They go for a higher price per square foot, residents renew at higher rates, and accept higher increases at renewal. We get calls every day from families searching for an affordable 3-bedroom or even 4-bedroom apartment. I call our comps every week, their situations with 3-bedroom apartments are similar because we are all chasing those families who need 3 bedrooms and 1400 square feet, but don't give a fig about having a yard or sharing walls with their neighbors. And this isn't in Manhattan, or even the Galleria. It's in Westchase, a humdrum 1980s suburb 15 miles away from downtown.

Look at your own breakdown of apartment size. they are not common if they were youd see more 3 and 4 bedroom apartments.

[MonkeyRonin]

Originally Posted by Obadno

Look at your own breakdown of apartment size. they are not common if they were youd see more 3 and 4 bedroom apartments.

Re-read what he wrote: "By far, the units that are leased the quickest are the 3-bedrooms. They go for a higher price per square foot, residents renew at higher rates, and accept higher increases at renewal. We get calls every day from families searching for an affordable 3-bedroom or even 4-bedroom apartment."

So clearly there's a demand for them that's not currently being met. Otherwise they'd be sitting empty.

[Steely Dan]

Originally Posted by Obadno

Look at your own breakdown of apartment size. they are not common if they were youd see more 3 and 4 bedroom apartments.

No one is trying to argue against the fact that the largest market for MFH is childless households.

All we're saying is that the market for family-sized units in MFH outside of NYC is not zero.

American households with children obviously have a very strong bias for detached SFHs, but here in my little corner of my city that is not named "NYC", there are 24 regular old middle class households with children on our block. 4 of them are in detached SFHs. the other 20 families are living in rental or condo units in small-scale "missing middle" MFH buildings.

There are tens of thousands of other such households spread across this vast city.

It's not zero.

[strongbad635]

Originally Posted by Steely Dan

No one is trying to argue against the fact that the largest market for MFH is childless households.

All we're saying is that the market for family-sized units in MFH outside of NYC is not zero.

American households with children obviously have a very strong bias for detached SFHs, but here in my little corner of my city that is not named "NYC", there are 24 regular old middle class households with children on our block. 4 of them are in detached SFHs. the other 20 families are living in rental or condo units in small-scale "missing middle" MFH buildings.

There are tens of thousands of other such households spread across this vast city.

It's not zero.

Precisely. It's a market that has unmet demand, and it's a market that could grow if we cared to help it along. It would be a great thing if more families chose to raise their kids in MFH in denser, walkable neighborhoods for a variety of reasons. The first step is making it easier and more appealing to adopt that kind of lifestyle. It isn't some kind of alien concept; millions of families around the world do it, perfectly normal people who miraculously lead fulfilling lives without a yard of their own and on a cul-de-sac.

[Wigs]

People that have probably never lived in apartments (or seen families living in them) incredulous that demand for large family sized apartments exists (particularly when the median single family home price in America is approaching $450,000, in Texas getting closer to 400k)