Little Answer to a Big Problem : San Francisco developer shows how small can be beautiful in midst of housing shortage

The financial dilemma of buying a home has found one interesting answer in San Francisco: a condo barely as big as the average garage. These private-sector mini-homes, ranging from 300 to 350 square feet, are a tight but affordable squeeze in the South of Market area, a gentrifying neighborhood near downtown. The units provide one way for a working-class person to break into a pricey housing market.

These studio units were built on the site of a single-residency hotel that was partly destroyed by the 1989 Loma Prieta earthquake. City restrictions required developer Bill Ferdon to put the same number of units there and to give former tenants first choice at renting. One tenant has accepted and is paying $525 in rent--a bargain in that market.

The sales price is relatively small. That’s the point. These mini-homes start at $79,000. At that price, they provide a buyer’s toehold in a market where the median housing price is more than $269,000.

Numerous features maximize space. A Murphy bed pulls down at night and hides by day. Built-in bookshelves double as a desk. The kitchen has a small stove, a refrigerator tucked under the counter and built-in cabinets. The standard-size bathroom has a tub and shower.

Families need not apply, but the space is adequate for one or even two senior citizens or young professionals who work nearby.

The mini-condos are comparable to the small houses common in many other industrialized countries. Barratt American imported the concept from England nearly 10 years ago. Those early mini-condos, in Northern and Southern California, ranged in size to about 500 square feet. They lost popularity in the early ‘80s after a drop in steep interest rates made home ownership more affordable.

Today’s relatively low interest rates will make housing affordable for many middle-class buyers. But garage-size condos are an answer for others who also want a piece of the American dream in one of the most expensive housing markets.