Developers are thinking small when it comes to studio apartments.
The average size of studio units has shrunk by 54 square feet to 445 square feet since 2014, making them 10% smaller today than they were a decade ago, according to a new report from RentCafe.
Smaller studios, which are self-contained apartments without walls between the living space and kitchen, appeal to renters and landlords. Tenants in these apartments tend to care more about saving on cost than about absolute size, so most are willing to sacrifice a little space if it keeps the monthly charge down.
Developers, meanwhile, can rent more units per building if they are smaller, which also helps cover growing construction costs.
“Some people just want something efficient that doesn’t break the bank,” said Gerry Ohrazda, a property manager at the Fremont Village Apartments in Seattle, which opened last year and offers studios under 300 square feet. “A place to eat and sleep.”
Retailers are taking note. In January, furniture company IKEA launched a space-conscious collection of exercise products for use in small homes, including a soft-topped bench with drawers. It serves as an exercise bench, coffee table and storage space in one.
The shrink in studio apartments far outpaces the more modest contraction of 12 square feet among all apartments over the past decade. In that time, pricier two- and three-bed apartments have grown by 7 square feet and 19 square feet respectively, according to RentCafe.
Matt Joblon, a developer focusing on mixed-use residential buildings, is planning to build narrower studio apartments with smaller footprints. He is saving space in the units with built-in closets and desks.
“We want to use every single square foot possible,” he said. “There can be no wasted square feet in these units in any way.”
Joblon and other developers looking to shrink studios are zeroing in on the kitchen. Smaller kitchenettes with efficient appliances and narrow console tables that double as dinner tables help developers save valuable real estate.
“The kitchen is probably your greatest variable,” said Omar Rihani, executive vice president at real-estate development consulting firm Project Management Advisors.
With smaller kitchens and living areas, many developers are counting on tenants spending more time at ground-floor businesses to eat and hang out.
Instead of hosting gatherings in their apartments, young people are increasingly entertaining guests at bars and restaurants, said Stenn Parton, founder of Prism Places, which operates mixed-use residential developments. Plus, more people are working out at community gyms, eating out at restaurants and working at coffee shops.
Developers Alex Lowe and Jon Hetzel’s upcoming Dallas development Bloc House features studios of roughly 350 square feet. They are supplementing traditional amenities such as fitness centers with co-working spaces and large tables for group dinners in the hope of helping tenants meet each other.
Shared amenities and smaller apartments help drive costs down near Dallas, where housing is expensive but there are relatively few high-rise buildings, Lowe and Hetzel said.
IKEA isn’t the only furniture company creating smaller, modular products for tinier apartments.
Lowe and Hetzel’s development, for example, will be furnished by expandable-furniture company Ori, which builds futuristic home products, including a robotic bed launched in 2020 that rises to the ceiling when not in use. The firm also builds out expandable apartments with moving walls that can create rooms on demand.
Still, even smaller fixtures, tables or couches can only go so far. Alexa Kosior, who works in social-media marketing in Chicago, moved into her studio in 2023, just three years after it was built. High costs steered her away from a pricier one-bedroom apartment.
The roughly 315-square-foot space means she has fewer clothes in her closet—where she also keeps her washer and dryer—and hardly entertains guests. She has also gotten creative in her small kitchen, prepping meals atop a cutting board on her stovetop.
Kosior plans to move out soon. While she said she would miss her apartment’s prime location, she is eager for more living space.
“I love my little studio,” she said. “But gosh, I need more space to live and cook.”
Write to Neil Mehta at Neil.Mehta@wsj.com