Traditionally, housing in America was based on large spaces. In 1790 the average house was 831 sq. ft., and by 1990 that had risen to 2,000 sq. ft. By 2015 it had risen again to 2,500 sq. ft. But now the pendulum is swinging the other direction and that’s creating more demand for self-storage by those who are “living smaller”. You see this throughout the media including the many “tiny home” programs.
Reduction in square footage
Home sizes are starting to return to their early roots. Although the average new home is starting a downward trend, even small reductions in square footage puts a premium on where to store the things that bigger houses take fo granted. Assuming that 50 sq. ft. represents a single closet, very small declines mean that there is nowhere to store normal household items like Christmas trees and decorations, other seasonal accessories, luggage, and family heirlooms.
Reduction in closet space
An additional change in current home design is a reduction in the number of closets and their size. Most consumers want their space to be present in bedrooms and other living rooms and no longer value enormous walk-in closets. As a result, there is even more pressure to find a place to store those items they find essential but can’t jam into existing closet areas.
Greater premium related to loss of floor area
With the price per square foot of residential dwellings rising to the highest levels in history, it puts more of a premium on every use of that space. When the value is $250 per square feet, just storing a Christmas tree represents 4 square feet or $1,000 of space wasted. Even if homes were not declining in size the residents would still be wanting to gain more living space by relegating items they don’t use every day to an off-site location.
The rise of the “tiny home”
It’s important to embrace the “tiny home” movement as a learning lesson on the trends in American views towards housing. Tastes change over time and while American views towards housing were robust in the old days, the cost of buying a house and keeping the utilities paid has caused a revolt by younger generations, as well as seniors that are trying to live on reduced incomes and, as a result, have elected to downsize.
Mobile homes, RVs and park models
And don’t forget the other unusual forms of housing that are growing in stature. Mobile homes, for example, represent 8% of all U.S. housing. Meanwhile, there is a growing movement among RV owners to sell their homes and simply live full-time in their RVs. Park models, in a similar way, are 400 sq. ft. housing units – typically found in RV parks – that were the forerunner of the modern tiny home. All of these housing types require self-storage to house even basic items.
The geography behind all of this
Virtually all of the housing trends are not to be found in urban markets but, instead, in suburbs and exurbs. “Living small” also includes living in lower density areas where you can build and find new housing units. We believe that this is the fertile part of the industry is to be found. There is a continual migration in America from old, urban centers to the greater expanse of the country, where schools are better, crime is lower, and the housing options are cheaper and more plentiful.
Conclusion
The current trend in housing is very advantageous for self-storage. It is a byproduct of “living small” that you have to add off-site storage to house the items that all Americans own and want access to. As homes decline in size the demand for self-storage should continue to grow. We also believe that an ancillary part of this trend to be higher demand and better economics in self-storage facilities in suburbs and exurbs and away from dense urban centers, which is directly in-line with current population trends.