Thursday, August 18, 2016

Seattle Microhousing "Fix" Eliminates 850 Affordable Homes Per Year.

In my last post I illustrated how a succession of poor policy decisions over the last two years have suppressed the production of micro-housing, making it larger, more expensive and less plentiful. In this post I want to explore how many affordable housing units we are losing and how much more people are paying for their housing as a result.

Lets begin with my assumptions: 2013 was the last full year where congregate micro-housing was relatively unrestricted and no major event disrupted production.  Since mid 2014, every few months some new regulation has come along to shake up the playing field.  For lack of a better option, I'm using 2013 as a baseline year.

In 2013 we built out to roughly 576,000 sf of micro-housing. The chart below shows what this scale of development produces today compared to what it would produce if the city were to fix their recent policy mistakes. Built into these numbers is an assumption that a fixed policy scheme would produce about 50% SEDUs and 50% congregate housing. Since we have never enjoyed a year where our policies didn't tip the scales one way or the other, I'm making an educated guess.

Year
Congregate Units
SF per Congregate Unit
Congregate Total SF
SEDUs
SF per SEDU 
SEDU
Total SF
Total SF All Types
2013 Baseline
1804
300
541200
82
425
34850
576050
Today's Rules
183
315
57605
1,110
467
518445
576050
Fixed Policies
960
300
288025
678
425
288025
576050

Under today's rules, about 90% of production is in the form of SEDUs, The remaining 10% is congregate housing.  This skew towards SEDUs is because of a 2014 zoning change that limits congregate housing mostly to zones that are inappropriate for this type of housing.  SEDU projects rarely produce affordable housing because their market rents are too high and their MFTE rent levels are so low that SEDUs rarely participate. Current data suggests a 4% participation rate for SEDU projects, compared to a 50% participation rate for new development in general. Lastly, a new director's rule has made micro-housing units larger and more expensive than they would otherwise be. This in mind, a normal year of production under today's rules would look roughly like this:

Today's Rules
Congregate Units
SEDU Units

Cong Market Rate Units
Cong MFTE Units
SEDU
Units
SEDU MFTE Units
Total
Unit Count
160
23
1,099
11
1,293
Rent
$900
$633
$1,300
$850

Average
$866
$1,295
$1,235

For comparison, if we fixed the zoning criteria for congregate housing, we would expect a higher percentage of projects to swing back toward the smaller, more affordable congregate variety.  If we set the rent requirements for the MFTE program at a discount comparable to other housing types, we would expect SEDU participation to normalize at around 50%.  Congregate housing is already set at a reasonable rate for MFTE, so participation for this type would continue to be fairly robust as well. The net effect is a huge rise the number of affordable units created and sharp decrease in average rents.

Fixed Policies
Congregate Units
SEDU Units

Cong Market Rate Units
Cong MFTE Units
SEDU
Units
SEDU MFTE Units
Total
Unit Count
840
120
593
85
1,638
Rent
$875
$633
$1,200
$850

Average
$845
$1,156
$974

 Every year our current micro-housing policies remain in effect:
  • 1300 people pay an average of $261 more per month in rent.
  • 345 fewer units are built, pushing up prices by adding to the city's production shortfall and increasing economic displacement of low income renters within our existing housing stock.
  • 97 units of 40% AMI housing are not created (affordable to someone making $25k/yr).
  • 753 units of 55% AMI are not created (affordable to someone making $34k/yr).
Multiplied over ten years, this represents the loss of 8,500 units of affordable housing, a 25% rent hike for 13,000 people, and 3,450 units of housing production lost.  We could fix this with a couple of administrative actions and a minor change to the zoning code.

Do you agree that we should fix this?  If so, please send a note to the city council, let them know.




*Prior to 2014, SEDUs had a design review threshold of 4 to 8 units depending on the zone, whereas congregate housing was not subject to design review.  This is the primary reason for the strong skew in the 2013 data towards congregate housing development.

Saturday, August 6, 2016

Microhousing news goes from bad to worse



In my last post I delivered the bad news that Seattle just functionally eliminated micro-housing by issuing Directors Rule 7-2016, making Small Efficiency Dwelling Units (SEDU's) almost as large as a conventional studio apartment. This week the other shoe dropped.  I got official word that the new rule doesn't just apply to SEDU's.  It applies to all housing, so it will make conventional studios larger as well.

To understand just how far we have wandered off the path, let's compress the last two years into the narrative of a single development project:

You buy a plot of land in a dense Urban Village to develop microhousing.  Your goal is to provide housing at affordable rents in a desirable neighborhood for the most people that you can.  You'd also like to participate in the Multi-Family Tax Exemption (MFTE) program so that your rents can be as affordable as possible. You draw up plans to build (40) 175sf units and rent them each for $900/mo. 

Not so fast. Some of the folks who live nearby are upset about what you have planned, so the city council passes new rules to help you compromise with your neighbors.  First, they propose to bump up your units to an average of 220 square feet, then in committee, they add some more rules that bump your average unit size even further.  You re-design your project according to the new rules. You are now down to (27) 260sf units that rent for about $1200/mo. Your projected rents just went up 33%, but at least you are in the MFTE program so 20% of your units will offer a discounted rent of $1020/mo in exchange for a property tax reduction, which is a nice break for some of your renters and actually works out to your benefit as well.

Hold on just a second. The Office of Housing figures out that the MFTE deal is too good for you. They reset the program requirements, dropping SEDU rents down to $628/mo. Some quick math tells you this is a drastic over-compensation that will cost you way more in rent abatement than you would ever get back in property tax relief.  Then the Mayor's office jumps in and decides to promote family-sized housing by bumping your participation rate up from 20% to 25%.  You're not exactly sure how driving you out the MFTE program is helping to build family-sized housing, but you've got bigger fish to fry, so you give up on the MFTE program.  There will be no discounted units, but at least you'll be adding some much needed inventory to the housing supply.

Nice try.  The building department in concerned that your units are so small that they pose a threat to life, health and safety.  They publish a new code interpretation that requires your SEDU's to have larger living rooms. You re-design your project again. You are now down to (24) 290sf units that rent for about $1300/mo. At this point, you realize you're better off converting the units into to small conventional studios.  Your unit size bumps up again, to a little over 300sf, but at least conventional studios can rationally participate in the MFTE program, so 25% of your tenants will get an affordable rent.

Not quite. The building department has a follow-up memo.  It turns out that the living room size problem doesn't just concern SEDUs; conventional studios are also in danger of sliding below the minimum threshold for human habitation.  The new interpretation applies to all housing, so your studios have to get larger again. Your units jump up to an average of 330sf.  Your unit count drops to 21.  Your rents are now at $1400/mo.

This is how Seattle micro-housing has evolved in less than two years. Spread over the dozens of small-unit development projects this represents the loss of significant amounts of affordable housing and a huge increase in average rents.  How much? I'll explore the numbers in a follow-up post.










Monday, July 11, 2016

The War Against Micro-housing is Over. Micro-housing Lost.


Our practice is deeply involved in micro-housing – as architects, as developers, and as proponents in the public policy sphere. Getting these projects done has become an ever-increasing uphill battle.  Taking stock and looking back over that last couple years, I think I’m ready to call it:  The war against micro-housing is over…and micro-housing has lost.

The straw that broke the camel’s back is a recent SDCI director’s rule that places new restrictions on Small Efficiency Dwelling Units (SEDU’s) to the extent that that they will no longer be meaningfully smaller than a typical studio apartment. It is a significant setback for micro-housing and the ability of private market development to help with housing affordability.  But it is only the latest in a series of unforced errors that has taken Seattle from being a national leader on this issue to leaving the stage altogether.

As a firm we have worked to create plentiful, high quality, small-unit housing, designed to support livability and promote community among residents.  We have worked to get the Multi-Family Tax Exemption (MFTE) program aligned with micro-housing development to increase the supply of affordable rent-stabilized units.  We have worked with policymakers and legislators to avoid unintended consequences when crafting policy language and code interpretations.  We worked with the HALA committee to get micro-housing promotion into the HALA agenda. Along the way we have won some kudos for our design work and for our advocacy efforts, but frankly little else.  We have had some success getting policy makers to agree with us in principle, but where the rubber meets the road we are not seeing any actual progress on the ground.  To the contrary, the policy direction is still moving backward.

How did we kill Microhousing?
There’s no one single moment where we drove the bus off the cliff.  Rather, it’s been a process of accumulated bad decisions. To help illustrate, I went back in my files and pulled together the following timeline summary of the past few years:

2007-2009:  Microhousing first appears in the Seattle Market. In 2007 Calhoun Properties remodels an existing duplex to create small units with private bathrooms paired with shared kitchens and open space. In 2009, they apply this idea to two new townhouse developments in the UW and Central District. Average unit size is about 140sf.

July 2009: Seattle Times publishes an article about Videre Apartments (23rd & John).  Public awareness and outrage grows.

2010-2013:  Microhousing proliferates and evolves.  Average unit size increases to about 175sf. Production ramps up to over 1000 units per year.

2013:  New Microhousing legislation is proposed, requiring all projects to undergo design review and to include more amenities such as common areas and bike parking.

2014: Revised Microhousing legislation proposes more expansive changes, prohibits congregate housing development in low-rise and most neighborhood commercial zones, replaces congregate housing with SEDU’s having a minimum average size of 220sf.

August 2014:  King County Superior Court rules that all current pod-style microhousing projects must go through the design review process.  Most existing projects switch over from pod-style to SEDU’s.

October 2014:  Microhousing legislation passes with some additional (hostile) amendments. Congregate housing is virtually banned, and subsequently disappears from the development pipeline. SEDU’s are encouraged as replacement for congregate housing.  A minimum unit size of 220 sf is required, but the minimum size is hard to achieve due to other restrictions. A 250-270 sf average unit size becomes a more typical outcome once all regulations are met.

December 2014:  A hearing examiner appeal invalidates the working definition of frequent transit, because SDCI determines frequent transit based on “average” time between transit stops, but the land use code definition does not contain the word “average”. Small unit development is no longer possible in portions of several Urban Villages.  Despite the fact that the issue was flagged by the HALA committee, and that the issue could be resolved by a one word addition to the land use code, no legislative fix has been brought forward to date.

February 2015:  The city council passes new rules that exclude congregate housing from participation in the MFTE program and sets a price for SEDU units that makes SEDU participation improbable. Since this time, only one SEDU project has applied for MFTE.

July 2015:  The HALA report is published.  HALA acknowledges the de-facto ban on congregate micro-housing, recommends relaxing recently created restrictions to increase the supply. This recommendation is not included in the city council HALA work plan.

August 2015:  SDCI enacts a new internal interpretation for the minimum clear floor space in a dwelling unit (the 70-7 rule).  The smallest (least expensive) unit sizes in all of our congregate housing projects are no longer legal. To date the 70-7 rule remains unpublished in any public document.  Applicants can only discover the issue only through a correction notice during permit review.

February 2016: Neiman Taber submits a CCAB appeal of the 70-7 rule for congregate residences, arguing it is inconsistent with the published code interpretation manual, past practices, historical models of small unit housing, and counterproductive to the very habitability and livability concerns that it aims to support.  The CCAB ruling upholds the 70-7 rule but acknowledges that we have a point.  The CCAB asks SDCI to develop a code change to accommodate the design of small congregate units.  SDCI has taken no action to date.

June 2016:  New SEDU rules are enacted apply the 70-7 rule to the entire living area of the unit. Many unit designs in the 250-280sf range will no longer meet SEDU requirements.  Note: 300sf is the bottom end of the range for a small regular studio apartment.

What now?

With the advent of the new SEDU rules, all of our projects with SEDU units will be going back to the drawing board for a re-design to enlarge the units.  An example of this change is shown below, where a project loses two units per floor under the new SEDU rules. In a nutshell, the unit count drops by about 10%, and the average unit size goes up about 10%, with rents rising accordingly.
BEFORE - Floorplan Layout Using Old SEDU Rules

AFTER - Floorplan Layout Using New SEDU Rules


Congregate housing production, which peaked at over 1000 units per year, has been reduced to a trickle.  Going forward, the SEDU development that largely took its place will be virtually indistinguishable in density and unit size from conventional studio apartments.  Barring any future changes, microhousing in Seattle is essentially done. There will be a few projects around the margins (mostly ours) that will continue to keep the format alive in the technical sense.  But in terms of providing an affordable alternative to conventional development at a production scale where it can make a meaningful difference?  Nope.  Game over.

How can we fix the situation?

Policymakers need to hear from citizens that care about these issues.  Here’s what you can do:

·         Ask the city council to fix the frequent transit definition in this year’s omnibus code cleanup. This is the lowest of the low-hanging fruit of the HALA agenda.  This problem has inhibited small unit development in a number of neighborhoods for almost two years, with no end in sight. Contact CM Rob Johnson.

·         Ask SDCI to revoke the new director’s rule for SEDU’s.  Size requirements beyond the building code minimums should not be superimposed on a housing type that exists for the sole purpose of being a smaller and more affordable option. Contact SDCI Director Nathan Torgelson.

·         The Office of Housing needs to revise the rules for SEDU participation in MFTE.   The rates for SEDUs should be evaluated using the same criteria as all other types - that participation is about 50%.  It is currently at about 4% (one participant for 25 active projects). Contact CM Tim Burgess and OH Director Steve Walker.

·         Ask SDCI to follow through on the CCAB request to develop building code language that will support small affordable congregate microhousing. Contact SDCI Director Nathan Torgelson.

·         Put re-legalizing congregate microhousing on the council agenda. In the meantime, request that the city sell their listed surplus properties in NC3 zoning to be developed as microhousing to make up for the suppression of market production. Contact CM Rob Johnson and CM Tim Burgess.

·         Ask the city to create an executive branch staff position for a HALA cop – someone whose portfolio is dedicated to challenging city staff and agencies when their actions are inconsistent with the intent of HALA. Contact Mayor Ed Murray.


Thursday, March 24, 2016

New Project - Lake Washington Waterfront Homes

View of new homes from dock

After 3 years of review cycles and project setbacks, work has finally begun at 10202 Rainier Avenue South. Four dilapidated cottages have recently been removed and excavation for the new homes is currently underway.

Expansive views across Lake Washington inspired the orientation, site layout and window placement for all three new homes which gently march up the steep sloping property.  Each home includes a 2 car garage, large recreation room with an outdoor shower and additional space to for water gear and boat storage.  The Kitchen/Living/Dining levels feature an open floor plan, wet bar and fireplace, and a home-office niche off the kitchen.  Large sliding doors open onto decks with deep overhangs, strategically positioned to allow for year-round enjoyment of the stunning natural setting.  

Original 1930's cabin and dock


Original upland cottages 1930's - 1960's

Landscaped  entryway between houses


House 1, waterside, is 3,255 SF with a 500 SF garage.  The upper level contains the master suite with a wrap-around, covered balcony, 3 additional bedrooms with 2 bathrooms and a laundry room.  House 2 and 3 are identical in size and layout and are 2,385 SF with a 550 SF garage.  The bedrooms, located at the mid level to allow the kitchen/living/dining to take advantage of the expansive water views above, contains the master suite with a wrap-around, covered balcony, two additional bedrooms with a shared bathroom and a laundry room.       


Access along east side-yards to shared waterfront and dock
An easement has been created along the eastern side-yards for direct access to the shared waterfront and dock.  A portion of the original dock will be removed along the waters edge to reclaim the natural shoreline for native habitats and a new natural beach will be created for recreation and boat storage.  A bio-retention planter for storm-water mitigation will provide separation between the private rear yard of the waterside home. and shared beach

View of proposed waterfront house from beach

View from dock after cottage demolition

View towards Mercer Island , Seward Park and beyond 


Projected completion slated for spring 2017.  Stay tuned for construction progress postings!



Wednesday, March 16, 2016

Beautiful Density: Housing Design for a More Liveable City



Seattle was built out as a city of single family homes, but that model has run its course. Most of our new inventory is coming in a denser form – rowhouses and townhouses. As a city we have resisted these changes socially and politically, at great volume. Why are we so unhappy with these new housing forms? To borrow a phrase…It’s the car stupid! To be more precise, it’s the negative effect parking has on the design and configuration of our housing, creating homes that are less livable and less beautiful.

So, how can we build a denser city as appealing as the single family fabric that came before it, while managing all the cars?  Read my new article at Crosscut to find out!

Saturday, March 12, 2016

Marion Green Presentation at NW Eco-Building Guild's 2015 Green Building Slam




We were honored to be included in the NW Eco-Building Guild's 2015 Green Building Slam.  The event featured ten projects; each presenter got ten slides and ten minutes.  It was a great opportunity to show off Marion Green to a large audience of our fellow architects, builders, developers, and green building enthusiasts. Click here to see a video of the presentation

The project was really well received.  It is my hope that events like this (and my relentless self-promotion!) will help spread the word about this important new housing type and help speed its adoption in the marketplace. We are working on an article for the Eco-Building Guild's Code Innovation Database that will document they ways we navigated this project through the land-use and zoning code so that others can more easily follow.

Speaking of which, our next courtyard project, Olympic View, is speeding its way toward completion.  Check it out here.

Monday, March 7, 2016

Re-Inventing Micro Housing - A Shift Toward Community Design.



When we started work on the Yobi Apartments in 2012, our goal was to re-invent the micro-housing model.  Our vision was inexpensive private rooms paired with common amenities, arranged so as to help build community among the residents that shared the building.  We wanted to prototype a better model with the hope of influencing others to follow.

Yobi was completed a few months ago and received much attention and positive feedback.  Since that time, there hasn’t been a whole lot of new congregate housing development (due to 2014 zoning changes that have suppressed it).  Last week I noticed a new project from Calhoun Properties working its way through the permitting process.  It's the first congregate project (from outside of our office) that I've seen since the 2014 code change, so I was eager to find out what they had planned. When I found their plans online, I was pleasantly surprised.

Calhoun’s new project has many features and communal amenities that are organized similar to the Yobi.  The building has one main entry, organized just like a typical apartment building.  The main floor has a generous shared common kitchen with an adjoining dining area, lounge, laundry room, and south facing patio. Each upper floor has a shared double kitchen, dining room, and view deck.  Their new project bears no trace of the old pod model.

Calhoun is not just any micro-housing developer. They more or less invented pod style micro-housing, developing 17 pod style projects over the last few years. A successful business often has low motivation to mess with their development model; Calhoun deserves a lot of credit for their willingness to do so. This shift to provide more communal space bodes well for future projects and validates our contention that there was a better way to design this housing type.

Score a huge victory for the cause of re-inventing micro-housing. Now we just need to re-legalize it.

UPDATE: The original version of this post took for granted that Calhoun Properties new project was inspired by ideas developed at the Yobi.  They contacted me to let me know that, while they read this article with interest, they were not aware of the Yobi and so it did not influence this project; the resemblance is a case of co-evolution rather than a progression. The post has been changed accordingly.

Main Floor - 5611 17th Ave NW - Calhoun Properties, Ecco Architects

Main Floor - Yobi Apartments 1219 E Marion St - Neiman Taber Architects