Tiny houses may just be catching on in urban areas: Mayor Bloomberg and NYC are pushing developers to build 300 square foot units.

Mayor Michael Bloomberg on Monday invited developers to propose ways to turn a Manhattan lot into an apartment building filled mostly with what officials are calling “micro-units” – dwellings complete with a bathroom, built-in kitchenette and enough space for a careful planner to use a fold-out bed as both sleeping space and living room.

If the pilot program is successful, officials could ultimately overturn a requirement established in 1987 that new apartments here be at least 400 square feet.

City planners envision a future in which the young, the cash-poor and empty nesters flock to such small dwellings – each not much bigger than a dorm room. In a pricey real estate market where about one-third of renter households spend more than half their income on rent, it could make housing more affordable…

Modern-day building codes and improved refrigeration and public health have changed what it means to live small, Bloomberg said. A typical mid-19th century tenement apartment on Manhattan’s Lower East Side might have been larger than one of the micro-units, measuring 325 square feet, but would have typically housed families with multiple children. The micro-units are to be leased only to one- or two-person households.

This could indeed be an interesting adaptation to demographic change. But I wonder: is New York City offering an incentive for developers to do this? Programs for affordable housing often come with some sort of incentive, something like if a developer builds a certain number of cheaper units, they are allowed to build a certain number of market-rate units. The article makes it sounds like there is significant demand for these smaller units in NYC which might negate the need for incentives. However, I haven’t yet seen any indication that developers believe building micro-units is worth it compared to what else they can build.