Updated 3/10/15 3:25 p.m. CST

Rising demand in small residential dwellings called micro units has peaked in Austin, according to one developer who plans on building the biggest micro-unit project in Austin so far.

Construction will begin in early 2016 on Spire, a 260-unit micro-unit apartment project at East Fifth and Waller streets in East Austin. Micro units are typically small residential spaces that are less than 400 square feet.

The five-story mixed-use building will also include approximately 6,500 square feet of retail and live-work space along East Fifth Street and a below-ground parking garage, according to information released March 10 by Spire East Fifth LP, the project's developer. Kelly Grossman Architects, Big Red Dog Engineering and dwg Landscape Architects also helped realize the project, which seeks to follow the multifamily vision laid out in the Plaza Saltillo Transit-Oriented Development master plan.

"At the inception of this project, it was always top-of-mind to follow and complement the vision set out in the Plaza Saltillo plan," said Spire general partner and project lead Taylor Wilson in a statement. "We think we've done just that by creating a transit-oriented community that is accessible to many Austinites."

The project will include an affordable housing component, with approximately 25 percent of the 260 micro-units designated for residents who earn 50 percent to 70 percent less than Austin's median family income. For a two-person household, that could range from $30,200 in annual income to as low as $18,100, according to the city of Austin Neighborhood Housing and Community Development Office.

Terry Mitchell, president of development company Momark Development LLC and Capital Metro board member, told Community Impact Newspaper in September that micro units are appropriate for the right location and demographic, alluding at the time that such a project may be in the works.

"Spire is providing a critical component to housing for Austin," said Mitchell, who is not associated with this project, in a statement. "Locating needed residential communities such as Spire accomplishes two purposes: it offers reasonably priced housing so needed in our urban core, and, by locating housing near jobs, it serves as a transportation improvement as residents can get to work without accessing overburdened freeways and major arterial roads."

An opening date for the project is still yet to be determined.