High Demand for Studios and One Bedroom Apartments

As reported by Forbes, developers have been increasingly building studios and one bedroom apartments. Before 2012 these represented 45% of new construction, and since 2012 they've been 55% of new construction.

That might seem like a small shift but we've noticed the increase in demand anecdotally with our members, as well. "One bedrooms" in particular don't stay vacant for long.

The underlying demographic trend is for individuals to marry later in life and to seek urban lifestyles. The days of early marriage and a starter house in the suburbs are mostly ended.

We reported back in October that the so-called "affordability crisis" is in fact being driven by this demographic shift coupled with inadequate zoning. State-wide the prospects for zoning reform seem dim.

Landlords who own large units and have cozy relations with their local zoning board of appeals may wish to explore subdivision and an increase in their building's unit count. Such units may experience lower-than-average vacancy, smaller-than-average households/wear-and-tear, and higher-than-average returns over the next ten years.