The Related Companies is best known in New York City for grand-scale developments like Hudson Yards, but the developer might have decidedly more minimalist plans for its upcoming projects.
The developer is experimenting with micro units in London — which have sold between $204,000 and $373,000 — and is exploring whether the mini model could work stateside. In February, the Stephen Ross-led development firm spent $15.5 million to acquire a 50 percent stake in Pocket, a London-based developer that specializes in building 409-square-foot micro homes in the United Kingdom. Pocket has already built 276 apartments, with another 326 under construction and 600 more in the pipeline.
“We would love to see their ideas, if not their direct product, translate into other markets, into other cities,” Ken Wong, Related’s COO and head of international development, told Bloomberg. “The question of whether it fits into the buildings and whether the business can work… is going to be the challenge.”
Like New York City, London is dealing with an ongoing housing affordability crisis. Just this week the British government hailed Pocket’s apartments as a possible answer to a tightening housing market. The Labour party has set a goal for 1 million new homes to be built in the U.K by 2020. Prospective buyers of the micro units must earn under 90,000 pounds — or $110,000 or less.
Shrinking apartments are already an established trend in the U.S. Studios and one-bedrooms under 600 square feet now make up 15 percent of the market in most major cities — double what it was between 2000 and 2009.
A New York City law passed in 1987 to do away with single-room-occupancy pads prevented the construction of units smaller than 400 square feet, but in March the City Council passed a law allowing micro units to be built.
In June, the first tenants moved into Monadnock Development’s Carmel Place in Kips Bay, which features 55 units between 260 and 360 square feet. The prices aren’t micro, though — market rates units start at $2,540.
Related, meanwhile, launched sales at its first residential building in the Hudson Yards megaproject earlier this month at 15 Hudson Yards. It’s Also Developing 520 West 28th Street, which has a 6,853-square-foot penthouse designed by the late Zaha Hadid. [Bloomberg] — Miriam Hall