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Living Large and Small

When it comes to millennial family formation, downtown residents may be better off talking to the U-Haul clerk than a real estate agent as the three-bedroom market is left to other parts of the county. Downtown — rich in luxury condos and apartments — instead seems to be making micro units a bigger part of the mix.

Eric Naslund, one of the partners at Studio E Architects, said downtown is developing in a way that supports the lifestyle of its residents. In order to keep costs reasonable for its younger population, developers are becoming more efficient in their layout. Less square footage allows for lower rents.

Naslund said private investors have been really interested in micro units or micro lofts, really efficient private units that are small but have more expansive amenities in common areas. The idea is that the unit is where tenants keep their stuff and sleep, while the rest of the day-to-day activities and entertainment take place elsewhere.

Appealing to the Young

“It’s a very urbane way of thinking about housing but it appeals to a younger generation because the costs to rent are more affordable in theory,” Naslund said. “We’re seeing a lot of interest in this sort of thing, we’ve been approached to design these here and lots of other places.”

Despite this new way of thinking, competition for other projects on parcels could keep the smaller units away.

“High rise and bigger units for sale might trump the ability to do these smaller projects,” Naslund said. “There are lots of places in the neighborhoods that could support it, and a neighborhood with a mix of all those things is more interesting than one uniform in its patterns.”

Naslund hasn’t seen demand for larger housing units, such as three bedroom properties, but he has heard that they appeal to young families.

Michael Rosenbaum, mortgage loan originator and branch manager of American Pacific Mortgage Corp., is the Marina District business representative and chair of the communications subcommittee for the Downtown Community Planning Council.

He said there are roughly 90 undeveloped parcels in and around downtown, making San Diego unusual in that it’s not out of room like many other metropolitan cities. He also said that much of downtown’s residential community was only recently developed in the mid-to-late ‘80s or early ‘90s. Now, there’s roughly 90 condo buildings downtown and approximately 40,000 full-time residents downtown, a combination of renters and condo dwellers, Rosenbaum said.

In his more than 16 years in downtown, he can count on one hand those developments that even have three bedroom units to support young families.

“There are families and young families that struggle because there are so few units that exist or that are coming in with square footage and bedroom counts,” said Rosenbaum. “That same developer can squeeze more studios and one and two bedrooms than they can for three bedrooms.”

Beyond that, Rosenbaum said that downtown is predominantly condos and that most millennial families may want to move into metro neighborhoods as opposed to the more expensive option of downtown because they can get more space, a backyard and a house.

Family Unfriendly

“I hope I’m wrong,” Rosenbaum said. “We don’t have that kind of housing or anything in the pipeline or any private marketplace inclined to change that. I can’t see families moving downtown.”

Without big-box stores and grocers, downtown can be a deterrent for renters who from a lifestyle perspective, want to do everything within their neighborhood. The operators of those grocers and establishments that would be needed downtown to accommodate that family lifestyle, often don’t move in because of parking issues, said Rosenbaum.

Looking forward, Naslund said that people should prepare for smaller spaces as the trend of the future.

“I think as a general rule people are going to be in a little less space than they used to be,” Naslund said. “It’s a natural function of the fact that to keep from cost escalation, you have to live in smaller spaces, smaller and cooler. They have to be appealing and interesting — but I think it would seem like if you look at demographics and trend lines — that’s going to have to happen.”

STATS:

• 40,000 residents

• 24,399 housing units

• 7,000 housing units under construction or approved

• 4 elementary schools/

1 middle school/

4 high schools

*Data collected from Yelp! and the Downtown San Diego Partnership

WHAT’S LACKING?

• 3-bedroom and larger housing

• Big box retail and grocers

• Education to support population growth

• Housing for 50K incomes

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