Micro units may not be worth the hype, according to prominent apartment developers in Miami.
“The cost of land in the city makes the price per unit the same regardless of size,” said Carlos Melo, a principal of the Melo Group, during a panel discussion on millennial living hosted by Bisnow on Wednesday. “So you really don’t reduce the price of the unit.”
Melo’s company has developed nine apartment projects, is building two more and has another two in the planning stages.
“When you have micro units in New York or Japan, it makes sense,” Melo said. “Here in Miami, I don’t see a big difference in price between micro units and regular apartments.”
His comments come at a crucial moment in the advent of micro units in the city. Some of Melo’s competitors, such as the Related Group, are planning mixed-use sites in Wynwood that will feature units as small as 400 square feet, the minimum allowed under the Miami 21 zoning code.
On Thursday, city commissioners will consider amending the code to reduce the minimum to 275 square feet for units located in transit-oriented areas near Metrorail and Metromover stations and other transit sites. The Melo Group’s smallest apartments are in the 600-square-foot range.
Patrick Campbell, a Related Group vice president who also sat on the panel, also said micro units may not be cost effective alternatives for millennials. “With cool amenities and cool locations come high prices,” Campbell said. “It becomes a challenge to cater to millennials and give them something affordable at the same time.”
With Miami becoming so expensive, Related is focusing its multifamily development projects in suburban neighborhoods, Campbell said. “Numbers wise, we can’t do buildings downtown,” he said. “So we are going further away. That helps us overcome some of the challenges.”