Will More Rooms In Apartments Mean More Babies?

A story in the Detroit News highlights a survey conducted by the Institute for Family Studies (Institute) found that demand has surged for larger, family friendly apartments, specifically apartments with more rooms. Meanwhile, vacancy rates for smaller apartments, studios and one bedroom, have increased. The recommendation from the Institute is that builders and investors should produce more two- and three-bedroom apartments. The survey is part of the Institutes’ Pronatalism Initiative, an effort to increase the birth rate. The reasoning. Behind the recommendation is that bigger apartments will encourage young couples to have children. It’s an interesting point and conclusion but might be missing one key element which unit size in square footage. Regardless of room count, smaller units mean more units and thus, lower costs per unit and lower rents.

The Institute has a point of view about apartments that is pretty conventional.

“If people want to live in apartments, that is their prerogative. But the rise in apartment construction is worrisome because prior IFS research has shown that very few Americans ideally want to live in apartments.”

And this is, even in 2025, mostly true. There is still a strong cultural bias toward using a 30-year mortgage to buy a home. Apartment living is still often seen as a weigh station along the path toward homeownership or even an indication of economic failure.

Still, a review by Arbor, a multifamily housing lender, found that Generation Z Is Leaning Into the Renting Lifestyle, finding that “more than three-fourths of those surveyed by Freddie Mac said flexibility was a key benefit of renting, while 63% cited how it can be less stressful than homeownership.” Arbor also noted that, “other survey respondents mentioned how renting offers the opportunity to live in attractive locations where the cost of owning a home is high.”

Younger Americans are more flexible and more realistic in their prospects to put together enough money for a down payment for a home in today’s economy. And many don’t want to. Whether this generational shift will stick, resulting in a shift in the American economy away from significant dependence on the for sale, single-family housing market. This was a trend that seemed quite real, significant, and even promising. Many young people were eschewing the idea of living in the suburbs and driving to work every day, favoring instead living in compact, walkable neighborhoods in the city and relying on transit and walking.

Why was this trend important? Because policy in the United States has largely been driven by single-family home production. The 30-year mortgage as a financing tool has taken an outsize role in the economy, providing federally backed credit for home acquisition. The only way that system works, is if there is significant appreciation in home values. That requires inflation, and inflation means scarcity and high prices, something that contributes to the so called “housing crisis.” Perhaps the rising generation and its willingness to consider holding off on participating in the system could mean a shift away from NIMBYism that drives supply killing regulation.

Or maybe not. I took a nostalgic look at the Walk Score, a tool that quantified the walkability of a neighborhood. The idea behind the score was that it could measure how easy it would be to live in a neighborhood and drive less. Schools, work, parks, bars, and restaurants would all be closely packed together so it would be easy to walk everywhere. This would be good for the environment, cutting down on carbon emissions from driving, and it would increase density, a better, more efficient use of land. It also meant more housing in a smaller space would be possible. That could mean more supply and lower prices.

But since the pandemic, as I noted in the post linked above, sentiment has shifted. When people had to work at home, bigger spaces farther away from crowded, active neighborhoods became more appealing. With low interest rates, and incentives to avoid crowds, there was a reversal in the pattern of people favoring the walkable neighborhood. Today, decades of moving toward living in cities as a trend may have slowed or stopped.

The Initiative’s report argues that, “family-friendly apartments are in short supply around the country, not least because almost none are being built. But we do not believe this is due to market efficiencies: family-friendly apartments have low vacancy rates, pointing to high demand, low turnover, and an undersupply that may arguably come from a mixture of regulatory barriers and genuine market perception failure among builders and investors.”

This is a good quantitative assessment that may align with the trend I noted, growing disinterest in the walkable neighborhood. But essential to the successful walkable neighborhood is smaller units. The reason is simple math and geometry. In order to make dense neighborhoods work, the units have to be smaller. But when I say smaller, I don’t mean the number of rooms, I mean overall square footage. I noted in a post from years ago, that smaller units mean that more people can pay rent, which means unit rents can fall. And when there are amenities nearby, people can spend less time in their smaller apartments, and more time in community.

I find the conclusions of the Institute interesting if not risible; give young couples more rooms, and they’ll mate enough times to fill them up.

“The takeaway is clear: if obstacles to family-friendly apartments can be removed, more such apartments will be built, and as a result, more young couples could have their first or second child earlier in life, raising fertility rates nationwide. Besides changes in private-sector practices, policymakers could especially consider ensuring that parking rules are per-unit rather than per-bedroom, and that public housing trusts have a mandate to produce family-friendly units.”

I’m not feeling the invisible hand here, but sure, create incentives for more rooms. But keep in mind that when it comes to affordability, it isn’t the number of rooms that matters, but the overall size of the unit; smaller unit size regardless of rooms, means these eager, fertile couples will have more space to have their fun and raise the subsequent children while paying less rent.