By Nicholas Tsontakis | DwellBoldly
“Cities generate economic growth because ideas spread more easily when smart people are physically close to one another.”
From The Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier by Edward L. Glaeser
Maximizing small spaces in homes and apartments in urban settings presents significant economic benefits for investors, citizens, and municipalities. For the investor, the increase in rental income is an obvious benefit, for the citizen, more affordable rents, and for the municipality, the less obvious benefits come from the interactions and spreading of ideas by more people separated by less space.
Urban areas, like Phoenix’s downtown core, face high demand for housing which drives up rental prices. By optimizing small spaces, property owners can create more functional and appealing units, attracting a greater number and a broader range of tenants. Optimizing in this case does not just suggest getting the largest quantity of units in the least amount of area, it also strives for maximum quality in a limited footprint. Small spaces need to be designed efficiently and effectively to command higher rents per square foot compared to larger, less effectively used spaces. This allows property owners to maximize their income from each unit, making better use of the limited real estate available in crowded urban environments.
Small, well-designed spaces can reduce overall housing costs for tenants, making urban living more affordable and accessible. When small apartments are designed to maximize utility and comfort, they offer a viable option for individuals and families seeking affordable housing solutions. Increasing the supply of desirable, lower-cost rental units can help to mitigate Phoenix’s housing affordability issues. Additionally, well-designed, small spaces often come with lower utility and maintenance costs, further reducing the financial burden on tenants, and making urban living more economically viable.
Lastly, the economic benefits extend to the broader urban economy. As more people can afford to live in city centers due to the availability of effectively designed, compact units, urban areas can experience increased economic activity. Residents contribute to local economies through their spending on goods and services, supporting local businesses and job creation. Moreover, a higher density of residents in urban centers can lead to more efficient public transportation systems and infrastructure use, reducing the need for costly suburban expansion and infrastructure development. And, perhaps most importantly, as suggested by the quote at the beginning of this article, the sharing and exchanging of ideas in densely populated areas, kickstart economies. This increased economic activity helps to create vibrant, sustainable urban communities, ultimately benefiting property owners, residents, and the city.