I hear opponents of density sometimes argue that Americans don’t want to live in tiny, high-rise apartment “rabbit hutches” like we see in Hong Kong, Tokyo or Singapore. We want our space and a little “elbow room,” and we don’t want Soviet-style planners telling us where to live.

Yet the market seems to be telling a different story. In housing- and space-constrained cities like San Francisco, the “micro-housing” movement has begun to take hold. Berkeley infill developer Patrick Kennedy has pioneered the product and is now advocating for these units to be built as a solution to the homeless problem in San Francisco.

Now the movement is even spreading to Sacramento, a city without the quite-so-high rents as San Francisco but nonetheless an expensive place with a housing shortage.  It’s a great example of how these units can be perfect for millennials and others who don’t need or want a giant space:

I spent 8 years after college living in an apartment that was less than 400 square feet, and I didn’t mind. It was easy to heat and cool, prevented me from buying stuff I didn’t need and couldn’t fit, and had a certain cozy charm. Perhaps more importantly, it allowed me to live in a great area (Santa Monica) without the high rent.

It’s good to see the market provide these opportunities. But it’s also worth noting that part of the reason the economics can work on these tiny places is that so many local governments prohibit more standard types of high-density housing from being built.

That supply shortage drives up home prices and rents and leaves the next generation out-of-luck when it comes to landing an affordable place near jobs and services.