The transformation of the real estate market in large cities: from small apartments to the rise of micro-apartments

Objective: The aim of this study is to analyze how municipal regulations, in conjunction with changes in family structures, have driven the emergence of smaller apartments and micro-apartments in large cities, using London, New York, San Francisco, and São Paulo as case studies. Methodology/Approach: A qualitative analysis of the zoning laws in these four cities (London, New York, San Francisco, and São Paulo) was conducted, complemented by content analysis of relevant news reports and media documents. This method was chosen due to the need to understand the regulatory and social influences shaping the housing supply, which can be better understood through a contextual and interpretative analysis of the data. Main Results: The results indicate that municipal regulations, alongside new consumer behaviors stemming from evolving family structures, have driven the emergence of increasingly smaller apartments, culminating in the rise of micro-apartments. This new market primarily comprises individuals living alone, childless couples, and an emerging demographic of senior citizens. Theoretical/Methodological Contributions: This study contributes to the Theory of Demographic Transitions, Family Life Cycle, and Consumer Behavior by illustrating how the proliferation of diverse family arrangements is generating new consumer behaviors, which, in turn, are reshaping the housing supply in large cities. Relevance/Originality: Previous studies have not adequately mapped the proliferation of small and micro-apartments. By examining the intersection of the Theory of Demographic Transitions, the Family Life Cycle, Consumer Behavior, and the Zoning Laws of four cities, this study brings originality and relevance to the research field. Implications for Management or Society: The results have significant implications for professionals in the real estate and public sectors, providing a comprehensive understanding of new family arrangements, their housing demands, and the development of policies that accommodate new residential formats.