What would you give up for affordable living in New York City? Or be minutes from the beach in Santa Monica, California? In today’s expensive and fiercely competitive real estate market, some homebuyers come to the same answer: space.
Between skyrocketing rents and home prices and the disappearance of the “classic home,” young Americans are downsizing so they can live in the places – and financial conditions – they want.
CNBC recently profiled three people making it work in less than 300 square feet. Here’s what it’s like.
In 2020 Alex Verhaeg moved into a 95 square foot apartment in Manhattan’s East Village. He was paid $1,000 a month.
“People might call this place just a room or a closet, but to me, it’s home,” he told CNBC Make It in 2022.
The then 23-year-old barber, bike messenger, and content creator found the apartment on Zillow and didn’t realize how small it was before he gave the place a tour. The Verhaeg apartment measures about 16 feet by 8 feet, which is smaller in footprint than the average parking space, which comes out to about 150 square feet. Since then, the rent has risen to $1,100.
The place does not have a bathroom. Instead, residents share the three and two bathrooms on each floor of the building. There is not a lot of kitchen either. Verhaeg uses an electric stove that sits on top of a wardrobe, which he uses to store food.
“The main benefit of living in such a small space is that it makes you value your things and be easygoing,” he said. “You can’t really go out and buy random things because you don’t have space to store them.”
In the year 2022, in the wake of a breakup and death in the family, Song Yoo decides she needs a change. For the 40-year-old, that meant a purge of sorts, as she sold or donated most of her possessions, packed her winter stuff into storage and moved into a tiny 140-square-foot house in Santa Monica.
Yu’s house, located in her owner’s backyard, is an eight-minute drive from the beach. Rent, including utilities, costs $1,600 per month. $600 less than the average monthly studio apartment in Santa Monica.
Although the home is “smaller than the average size of a parking space,” Yu wrote in a recent CNBC Make It story, “it’s designed in such a way that it doesn’t feel cramped.”
Yoo’s main room should perform multiple functions, serving as a living room, closet, and food preparation area. Other than installing a few hooks, I left everything as is.
The place doesn’t have a stovetop, but the mild Southern California weather means Yu can use the propane double stove outside and cook at home at least six days a week.
Yoo has enjoyed the lifestyle shift and expects to live in a tiny house forever.
“Living with structure in a small space has many benefits,” she wrote. “I save time, energy, and money (especially after getting rid of my $4,500-a-month New York apartment).” “It’s very calm and grounded. I only have one high-quality version of everything, and each element has its own place.”
The tiny home lifestyle can appeal to someone who already owns a full sized home.
In 2019, Precious Price purchased a three-bedroom, 1,400-square-foot home in Atlanta for $196,000. The plan was to rent spare rooms on Airbnb. But that idea became moot when the COVID-19 pandemic hit, and Price found herself living alone in a house that seemed too big.
“But in May, as I was staring out the kitchen window into my huge backyard, something happened,” she wrote in an article for CNBC Make It earlier this year. “I could use this space to build a little house to live in and rent out the entire main house.”
The house cost about $35,000 to build, including the prefabricated shed structure, labor costs, and materials. Price sold the shares to cover about $8,500 and put the remainder on credit cards. When the tiny home was completed in 2021, she listed it on Airbnb for reimbursement, costing between $89 and $129 per night.
These days, Price lives in a tiny 296-square-foot house and rents out the larger house to long-term renters. Price writes that the rent on the big house covers the costs associated with both homes, “which means I’m able to live in my little house for free.”
The price makes effective use of the relatively limited space. In addition to the loft bed and day bed that doubles as a sofa, there is a full bathroom, kitchen and breakfast nook. The kitchen also has a full size fridge and an extra large sink.
A tastefully and strategically decorated interior can give the impression of a much larger home, Price writes.
“The eight separate windows, the wall mirrors and the glass shower door all make the space feel bigger. Sometimes I forget I live in a shed.”
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