NEW YORK (MainStreet) — The Arcade Providence, a historical building located in downtown Providence, R.I., is opening its doors in the next couple of weeks to a new type of tenancy - micro-apartment living.

"We have a wait list that many times longer than the 48 apartments that we have," said Robin Dionne, a spokesperson for Arcade Providence who says their wait list is so long the building hasn't even held an open house.

A shortage supply of urban housing with changing consumer patterns are driving the demand for micro apartments in expensive, highly populated cities -- such as Providence, R.I., San Francisco, Boston and New York City.

The smallest unit at Arcade Providence is 225 square feet, roughly the size of a 66-passenger school bus, with a price tag starting at $550 per month. None of the building's units, including the larger micro units with two bedrooms, has conventional ovens since all of the units were remodeled under the Rhode Island rooming code, Dionne said.

"There are other cities like San Francisco that have amended their building codes to allow for 220 square feet, which is five square feet smaller than our smallest unit," she said.

San Francisco downsized its building code last year to 220 square feet to allow for the construction of micro unit apartments. Other cities, such as Boston and New York, only allow compact apartments under special exemptions as a new form of experimental urban design.

Gerdling Edlen, a Portland, Ore.-based firm that builds sustainable micro units, constructed compact apartment under an exemption in Boston where it built tiny sized units between 300 and 600 square feet in a special downtown area tied to collaboration and innovation. Earlier this year, the Portland firm opened Factory 63, a micro-unit complex in the heart of Beantown's Innovation District on Melcher Street with studio apartments ranging in size from 375 to 530 square feet, starting at $1,300 per month. The complex was fully leased within several weeks of its opening.

"There's such a high demand and small supply in these markets, it may be relatively more affordable." said Kelly Saito, president of Gerdling Edlen. "For the occupant there is cost saving by the virtue of it having less stuff and buying into the notion of compact living."

Many micro unit tenants are between 18 and 34 years old, who are attracted to living in certain cities like Seattle, Portland, Ore., San Francisco, Los Angeles, Chicago and cities along the East Coast, the Portland developer said.

"The compact unit projects are designed to accommodate people who care more about living in the city than having a chef's kitchen and a large living room," Saito said. "The market is saying if you give me an apartment that's well-designed and functional, then I don't need the extra space."

The smaller micro units at the Arcade Providence are designed with functionality, modeled after efficient boat interiors with built-in furniture pieces.

"He did have this whole affordable living in mind," Dionne said about Arcade Providence's developer Evan Granoof, who played a big hand in the design and layout of the micro units. "It's for people who have just graduated from school with a job or internship - it's affordable."

The demographic for a compact apartment is generally single and ideally made for one person, said Donald Albrecht, who curated the Micro Apartment exhibition at the Museum of New York City to highlight the issue of affordability and changing demographics.

"It's not for a person trying to raise a family or made for a person who is downsizing," Albrecht said.

A big part of the demographic shift is the Millennial generation is the largest demographic of all time and bigger than the Baby Boomers and it's a generation that prefers to rent over buying," said Doug Bibby, president of the National Multi Housing Council in Washington, D.C.

"They'll sacrifice in terms of size for proximity of downtown," he said. "This is the new studio apartment. You can expect to see more of it."

--Written by Farran Powell for MainStreet