Seattle City Council is one step closer to regulating a new category in the city's real estate market: micro-housing.

On a lawn in the Eastlake neighborhood, a land use action sign notifies neighbors. On a nearby pole hangs a notice of public meeting.

The street is dotted with development plans, and not coincidentally, they are often located beside signs that read No Vacancy .

The affordability in Seattle is a real challenge right now, explained Councilman Mike O'Brien.

Because supply simply isn't keeping up with demand, cost of rent is sky-rocketing, creating a need for affordable housing.

Developers have used the opportunity to create micro-housing units, typically with 8 apartments per floor that are about 120 square feet and share a kitchen.

The rent is typical around $600 and $800 per month.

There are waiting lists because people are anxious to get in to those units, said Roger Valdez with Smart Growth Seattle. It affords people with a reasonable affordable choice.

However, because micro-housing is so new, it's an unregulated territory. According to city officials, developers have gained permits under the townhome category, and that's caused neighborhood frustration.

Often the buildings are larger than the houses on their residential street, and offer little parking for tenants.

Squeezing 40 people into them and saying, 'They're not going to have cars,' said neighbor Rick Miner.

Friday, a city council committee heard from the Department of Planning and Development, which proposed a new category of regulation for micro-housing.

It would prohibit the complexes in single-family zoned neighborhoods, require approval from a design review board, as well as increase the quantity of required parking and garbage collection.

All micro-housing units already approved for permits aren't affected.

It's too little too late! Miner said. These won't be changed. These are on their way.

The city will hold a public meeting on the proposed regulations next month. Council expects to vote on them in early June.

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