Talking Development on the Seattle Multi-Family Podcast

 

Jerrid Anderson invited me into his studio a few weeks ago to talk about our work in housing development. We enjoyed a wide ranging discussion, nerding out about various aspects of design, regulation, land values, property management, and the state of the industry in general. Enjoy!

Introducing the Urban Rooming House

Ten years ago, Neiman Taber embarked on a series of projects that pioneered a new approach to micro-housing. We combined the inherent affordability of small units with well-designed common spaces that promote social interaction, build social capital, and provide quality homes for people struggling to make ends meet in an increasingly unaffordable city.

Altogether we designed ten congregate micro-housing projects, including three that we developed ourselves. In 2023 the last of these projects finished construction and opened its doors. These projects created more than 600 micro-housing units, most of which rent for around $1000 per month. We've received numerous awards for these projects, garnered a lot of good press, and people keep asking us what we are doing for our next project. But we have no new projects of this type in the pipeline – neither for our clients, nor for ourselves. It’s not just us. It has been over 3 years since any developer submitted a permit application for a new congregate housing project in Seattle.

We would still be developing and building congregate micro-housing projects if we could, but under today’s conditions there's been no way forward for more projects like this to be built by market-rate developers.

That's the bad news. Here's the good news. We've figured out a solution that solves a whole host of development challenges and provides a viable development model for congregate housing that can be built today. We've decided to share this concept openly - allowing us find mission-aligned investors & partners to get a project like this rolling, or for someone else to simply take this idea and run with it themselves. 

What's the problem?

 Our Current Microhousing Model. Typical loft and non-lofted units at The Roost (901 Hiawatha Pl S)

Our current micro-housing model involves building small units (about 175-190 square feet), each outfitted with a bed-space, a small kitchenette, a private bathroom, and some built-in storage. Down the corridor, the residents share kitchens, living, and dining facilities. The buildings are typically 3 to 4 story wood-framed walkups with no elevators. The target demographic is people making close to minimum wage, or around 40%-55%  area median income (AMI). Why can’t we make these congregate housing projects work anymore?

• They cost too much to build. We used to be able to construct congregate housing projects for about $100,000 a unit and rent them for about $1000 a month. A combination of changes to the land use code, the energy code, and general construction cost escalation have driven up the price to build these projects to about $150,000 per unit in today's market. For these projects to be viable, market rents would have to be closer to $1,400 per month. There's no way for a developer to rent these units for that much, and if they could they wouldn't address the problem we're trying to solve because our target demographic can't afford that much rent.

• There has been almost no place to build them. Seattle severely restricts where congregate housing can be built. I’ve written about this ad nauseum for almost a decade. However, in the middle of drafting this article, the state passed HB 1998 which requires cities to allow microhousing wherever multi-family development is allowed. So, regarding this issue…never mind. The draft legislation is already moving down the pipeline, so fairly soon finding land where congregate housing is allowed will no longer be an issue.

• They need to be accessible. Our current model for building microhousing depends on walk-up type buildings where most of the units are allowed to be non-accessible. This allows us to build smaller, more efficient units, which keeps our prices low, but makes these projects unacceptable for use by non-profits and public agencies who might otherwise be enthusiastic buyers or tenants. A microhousing model that can incorporate elevator service and full accessibility while maintaining the required unit density will be a more robust and viable model. 

So, we need a way to make units that are more efficient, less expensive to build, and compatible with accessibility requirements. It’s a tall order, but we have a solution.

What’s the solution?

Our proposal is a hybrid between a large multi-bedroom apartment and a rooming house. Its essentially a multi-bedroom apartment with a very large kitchen, a few shared bathrooms, and a lot of bedrooms. The bedrooms have no private bathroom or kitchenette - the bathrooms and kitchens are all shared. Projects like this have always been possible to a degree, but the State of Washington changed the game in 2021 when they passed SB 5235, a law that removed arbitrary limits on the number of occupants in a dwelling unit. Where cities used to impose a limit of x bedrooms per dwelling unit, there is now no limit other than those that may be imposed by “generally applicable health and safety provisions as established by applicable building code or city ordinance”. An apartment with a large number of bedrooms will now count as a single dwelling unit under land use and zoning codes.

The upper size limit of a dwelling unit per SB 5235 remains untested, but there is clear language in the building code today that recognizes a 16-bedroom rooming house as a scale that is a low hazard, and so we believe there is a viable code path to design a building based on 16-unit apartments with shared bathrooms and kitchens.

We’re calling this idea an Urban Rooming House. A project using this new format could solve all of the key challenges that have stymied our current model of micro housing. Here are the benefits:

1) Efficiency/Density: The congregate housing model that we’ve used for the last decade achieved a density of about one unit for every 300 square feet of building area. The simpler unit format in the Urban Rooming House drops that density down to about one unit per 270 square feet, or a 10% improvement in unit yield. That's going to generate more revenue, house more people and lower the rent we need to charge to make the project viable.

2) Cheaper construction: While construction cost has gone up a lot in recent years, it's gone up most significantly for trades like mechanical, electrical, and plumbing (MEP) that have an outsized effect on typical micro-units because they have all the expensive parts of a unit (kitchenette, cabinets, bathroom) but less of the inexpensive areas like bedrooms and living rooms. Urban Rooming Houses will be cheaper to build because:

• They use shared bathrooms and kitchens that will significantly reduce the MEP costs for the project. 

• Most of the circulation space for the building is within the units, meaning there are fewer corridors that require rated construction details, dampers, and sealants. 

• Expensive ducted ERV systems required by the new energy code can be replaced by a simple spot ERV in each bedroom with no ductwork. This is possible because the private units are all single rooms with no bathrooms.

3) Accessibility/Elevators: Urban Rooming Houses can accommodate accessibility requirements without triggering the density penalties I described earlier. The private rooms don’t have features like kitchenettes and private bathrooms that have to be enlarged to provide adequate clear floor space. The scale of the shared bathrooms and kitchens are inherently large enough that accommodating accessibility requirements doesn’t meaningfully change the size of those spaces. This means:

• We can build Urban Rooming Houses projects successfully in zones with taller height limits.

• We can offer residents the enhanced convenience & livability that an elevator provides.

• We can sell or lease these buildings to non-profits or public agencies that require full accessibility within their facilities.

4) Build Anywhere: Urban Rooming Houses are not congregate housing - they are simply large apartments and would be classified as dwelling units. While HB 1998 will allow congregate housing to be built anywhere that multi-family housing is allowed, most cities have parking minimums and other per-unit land use requirements that would prevent congregate housing from from being built because these zoning requirements can indirectly amount to a density limit. Clustering the bedrooms within large dwelling units can lower the effective unit count enough to sidestep these de-facto density limits that are built into many zoning codes (other than Seattle). 

Urban Rooming House - Lofted Units and Typical Units

Want to know more?

To help developers understand the Urban Rooming House model and its potential viability, we’ve provided an illustrated feasibility study and a pro-forma for a sample site. The site shown in the study is a theoretical 80’x120’ commercially zoned lot with an alley in the back. There’s nothing magic about the exact zone or lot size that we chose, but we chose site characteristics that we thought would match well with the project type. The commercial zoning we chose is generally easier to develop than a lowrise/midrise lot; A lot size of about 9,000-10,000 square feet is more efficient than something smaller; Having an alley is much better than not having one.

The project provides thirteen (13) large apartments that vary in size from 3 to 14 bedrooms. The design fits an astonishing 150 homes onto a 9600sf lot and a building size of around 40,000 square feet. The example depicted is a 5-story building, but the concept would also work if the building were taller.

Interest in reviving micro-housing as a market sector has never been higher. In policy circles it is almost unanimously understood that we need to find a way to generate a significant new supply of market rate low-cost housing if we're ever going to get a handle on our housing affordability and homelessness crisis. We need more homes, we need options for low-income renters, and this is a powerful new model for doing both. If you’re interested in partnering with us on a project like this, please feel free to reach out.

To dig deeper, see here for a packet of floor plans and a financial pro-forma for this concept:

Washington State Fixes Microhousing

Ten years ago, Seattle passed Council Ordinance 124608, which made changes to the land use code that choked off the creation of congregate housing in Seattle, ending a microhousing boom that had been bringing about 1000 units a year of un-subsidized affordable housing to the Seattle market. Almost immediately, policy makers realized they had made a serious mistake. Over the years I have met with many people in Seattle leadership who recognized that CO 124608 needed to be reversed but found themselves either unwilling to spend the political capital, or unable to assemble the political coalition that could muster the votes needed to fix it.

In this session, the Washington State legislature passed HB 1998, which requires cities and counties within urban growth boundaries to allow co-living housing (aka rooming houses, SROs, congregate housing) in any zone where general multi-family development is allowed (6 units or more). The law was signed by the Governor on March 19^th.

HB 1998 is a total game changer. The exclusionary policies enabled by CO 124608 are simply no longer allowed. Period. End of conversation. There will be no endless public hearings, no lawsuits, no epic struggle of NIMBYs vs YIMBYs. The state has given us until the end of 2025 to make the necessary changes to our land use code, at which point CO 124608 will simply become unenforceable. It is my hope that we will make these changes much sooner. This memo outlines the specific elements of the Seattle Municipal Code that need to change to comply with HB 1998. These changes are exempt from SEPA challenge, making the process relatively straightforward. 

A decade ago, we passed a poorly considered law that made it hard for developers to build low-cost basic housing. Thankfully, it is now more widely understood in policy circles that the lack of low-cost basic housing is a major contributor to our affordability challenges, and a primary cause of our homelessness crisis. The state now requires us to fix the situation. I’m hoping the Mayor and Council can get this done on a fast track so we can get to work building the housing our city so desperately needs.

Does Money Grows on Trees?

Last week Erica Barnett wrote a thought provoking article in Publicola looking at the proposed tree legislation. Among its criticisms, the article noted the cost of the new staff needed to administer this proposed legislation against the expected revenue the city hoped to raise to fund a tree planting in underserved neighborhoods.

… the city’s Department of Construction and Inspections says it will need to hire three new full-time staffers at an initial cost of $273,000 a year. That more than offsets the revenues the city expects to receive from payments in lieu of tree plantings, which will be used to plant new trees on city-owned property—an estimated $191,000 in the first year.

Analysis of the tree legislation didn’t include the exact cost of replacing trees removed for development. But using the city’s own average “nursery purchase price” of $2,833 per tree, that $191,000 would plant about 67 trees citywide

Barnett raises that the point that it's hard for government initiatives to be effective when more money is spent on administration than on actually achieving their goals. A few months ago AIA Seattle sent a letter to the council and the mayor critiquing the proposed legislation and outlining some principles that they felt were important in crafting a successful tree policy. One of those principles was very much along the same lines as Barnett's criticism:

Spend money on planting trees, not on paperwork:  Arborist reports, regulatory review, city inspections, and the attendant delays and bureaucracy associated with an emphasis on verification of compliance are costly. City and community resources are better allocated to developing the tree canopy.

If we take Barnett’s point, and expand the cost of the program to include not just the salaries of the new SDCI staff but the cost of all of the paperwork and bureaucracy required by the program, how much would that be? How much are we spending to generate $191,000 of fees for the city to plant 67 trees per year? I sat down this week to make a rough estimate.

I began with the city permit data from data.seattle.gov for issued building permits for 2022. My goal was to figure out about how many permits each year might trigger a tree review. The first step is to figure out how many permit processes a year are going to be affected by the new tree legislation. I began with all of the new construction permits. Safe to say a new building is going to have significant ground disturbance. I also looked through the additions and alterations, filtered by the keyword “addition”, and then manually checked the project descriptions to remove projects where the addition seemed likely to be at an upper story and not at the ground level. Most of the projects left over are additions to single family homes, attached accessory dwelling units, and projects like decks and porches that create ground disturbance.

Seattle permit data isn't exactly straightforward. Some permit applications generate more than one permit number. If there are multiple structures proposed on a site, SDCI will issue a separate permit for each freestanding structure. So, short of researching each individual line item, there's a little guesswork involved here. Most of the new multifamily projects are of the townhouse variety which typically generate 2-3 permits for each project, and many of the new single-family projects include a DADU which would generate two permits for each project (one for the house and one for the DADU). I created a summary table of each project type and divided the single family permits by 2 and the multifamily permits by 3. From that I got an estimate of about 1200 completed permit applications per year.

Some of those projects aren't going to have trees on site or on neighboring sites or anywhere near the area of ground disturbance and so they won't require a review. But the whole point of this legislation is to require careful study of all sites to make sure protected trees are identified and that exhaustive means are taken to protect them, so I think it's fair to assume that a significant percentage of projects are going to have to go through the new processes outlined by this legislation. For the purposes of this exercise, I assumed that 65% of sites that have ground disturbance will be subject to the SDCI arborists review during the permitting process. That works out to just under 800 unique permit application processes each year that will be subject to new reviews.

2022 - Complete permit applications with ground disturbance
	Permits	likely # of projects
Single Family/Duplex	847	424
Multifamily	242	81
Commercial	37	37
Additions	681	681
Est. projects with ground disturbance		1222
% of project sites requiring review		65%
Annual permits requiring review		794

The next step is to estimate how much these new permit reviews will cost. All projects with a tree nearby will now begin with a survey and an arborists report. Once those elements are provided the architect must translate those into a series of diagrams that analyze the trees, their protected root zones, any proposed disturbance into those root zones, placement of protection fencing etc. The city arborists will review the architects’ diagrams and the arborist report. SDCI has the discretion to request further site investigations to explore the extent of feeder roots so that those elements may be located with precision and protected if deemed necessary. Based upon those site investigations, the tree protection areas may have to be adjusted and the building redesigned.

With this background in mind, I have attempted to estimate the additional costs per project that we might expect in order to comply with these new requirements:

Estimated Costs of Proposed Tree Legislation per Application
Required Costs/Processes	Low	High
Survey	$3,000	$5,000
Arborist Report	$1,500	$2,500
Arborist Supplement	$500	$1,000
Arborist review letter	$300	$500
Architect site plan and diagrams	$3,000	$5,000
SDCI reviewer charges (5-10 hours)	$1,500	$3,000
Architect plan revisions (15-50 hours)	$1,500	$5,000
Time delay costs (1-2 Months)	$5,833	$11,667
Estimated total	$17,133	$33,667

This works out to an average of about $25,000 per project. That might seem like a big number but if anything it's probably a lowball estimate, because this is just looking at costs incurred during design and permitting. It doesn't take into account costs during construction required for tree protection fencing, SDCI inspection fees, and increased fees for right of way usage due to the inability to stockpile materials on site. But that's not exactly my world and those costs will vary a bit more depending on project specifics, so for now let's just go with $25,000 additional cost per project. With that in mind we can flesh out our earlier table to get a total annual cost of this new process: $20 million dollars! 

2022 - Complete permit applications with ground disturbance
	Permits	likely # of projects
Single Family/Duplex	847	424
Multifamily	242	81
Commercial	37	37
Additions	681	681
Est. projects with ground disturbance		1222
% of project sites requiring review		65%
Annual permits requiring review		794
Total Annual Process Cost		$20,177,971

So, if we put all of this information together, our new tree legislation will generate $20 million in new bureaucracy costs every year to plant 67 trees. That's $300,000 per tree. If you're looking for an example of ineffective and wasteful government policy, the $300,000 tree is right up there with the $10,000 toilet seat.

Imagine what else you could do with that money, aside from pushing a bunch of paper in a circle. $20,000,000 would fund the planting and maintenance of 7,000 trees on public land every year. Or, instead of paying city employees an hourly wage to plant and maintain trees, you could simply give away free trees and let an army of volunteer tree lovers do the rest.

Some pieces of problematic legislation are basically sound ideas that simply need to be tweaked. This proposal is not one of them. It's based on a flawed premise that the way to grow our tree canopy is to create a massive new bureaucracy to restrict and fine landowners into retaining the trees they have. But trees are something that people really like, are generally happy to maintain, and will often volunteer to plant all on their own. Where do you think all the trees that we have today came from? 

We are working to get this proposal amended to try to blunt the worst effects that might suppress housing by making sites undevelopable. But there's no tweak that can pave over the gulf between the millions of wasted dollars and the thousands of dollars in benefits. Here's hoping the council can find five votes to send this one back to the drawing board.

Proposed Tree Legislation Awaits its Turn to Add to Seattle’s Housing Woes

 

I have an editorial in the Urbanist today that outlines my objections to Seattle's proposed new tree legislation and frames it within the context of the recent collapse in housing starts caused by over-regulation. The numbers are pretty shocking: Townhouses down 50%, losing 940 homes per year, and apartments down 67%, a loss of over 8000 homes per year. 

You can read the editorial here. Due to the complexity of land use regulation and the limited space available for an Op-Ed (even in a generous publication like The Urbanist), the article isn't able to fully explore legislation in detail. For land use and policy wonks only, I have included a more complete explanation below

Top ten problems w/ the proposed new tree legislation:

1. This legislation will elevate tree protection to a level of scrutiny and review roughly equivalent to the amount of effort we put into geotechnical review. Each project will require a survey, and arborist report, an arborist’s review of plans letter, and likely several rounds of back and forth with reviewers to ask for refinement of documentation on the plans, further detailed field investigation to determine the extent and location of key feeder roots, soil conditions, water table, etc. It will create significant cost and time delay associated with each project, and in most cases, it will just be process for the sake of process.

 

2. The only provision for the removal of exceptional trees (tier 2 trees) in this legislation is a rule that allows for removal if the basic tree protection areas leave less than 85% of the site available for buildings, access, walkways, utilities, etc. This is a rule that is workable for townhouse developments on low-rise sites that have relatively low lot coverage. However, it is totally unworkable for commercial zones, where the building itself typically covers 80% of the site and the flexibility for how the building is configured is minimal. For these types of sites, tree preservation is almost always incompatible with full development to the zoned capacity. There needs to be a general rule that allows trees to be removed if an applicant can demonstrate that preservation is incompatible with development to the zoned capacity of the site. The current tree regulations have such an exception, but it's been written out of these new regulations. Developers are paying MHA fees for every square foot they build in exchange for the last increment of floor-area. Regulations that deny developers access to that development potential essentially turn MHA fees into a taking.

 

3. There will be many instances, particularly in commercial zones, where full development along with preservation of a tier 2 tree might be technically possible but would lead to a bad design. Boards need to have the discretion to allow for tree removal when doing so leads to a building that is more compatible with the design guidelines. Some Tier 2 trees will be exceptional specimen trees, but many of them will be ordinary and otherwise unremarkable. Quite often trees will be designated as Tier 2 because of a low fork in the tree that increases the measure diameter of the tree. There are also a number of trees in the six-to-12-inch diameter range that are designated as Tier 2. We need rules that allow design review boards and planners to make discretionary calls.

 

4. The legislation uses two concepts: “Basic tree protection area” is what we use today. This is the area under the tree canopy. This is easy to define. “Tree protection area” is a more nebulous concept that includes the basic tree protection area but can also be expanded up to twice the area of the tree canopy. Mostly the legislation refers to the more nebulous “tree protection area” in determining portions of the site where you cannot build and where construction activities cannot occur. Leaning heavily on this subjective standard will make it difficult for applicants to understand where they can build and where they can't. It will require the preparation of extensive reports on the part of the applicant which the Seattle Department of Construction and Inspections (SDCI) must then evaluate and whose conclusions they may choose to challenge, leading to a difficult and lengthy review process. This is a swamp into which we will sink countless hours of arborist reports, opinion letters, correction cycles, increased costs, and lost housing.

 

5. All trees >12” are required to be administered with the same care that we reserve today only for exceptional trees (mostly 30” diameter and larger), and no trees >6” can be removed without a building permit. This is a massive increase in the bureaucratic load that SDCI has to carry. This is a problem for housing developers, but the problem is not just associated with new development. 150,000 homeowners who believe they are entitled to the quiet enjoyment of their own land will wake up to discover that they have a whole new relationship with city government that they will not be happy about, and with good reason.

 

6. The inflexibility of these rules and the City’s discretionary role in enforcing and defining a tree protection area is particularly problematic when it comes to off-site trees. It is not uncommon for trees to be planted near property lines and for canopies and root systems to extend from neighboring properties onto a development site. While state law allows for a property owner to limb a neighbor’s tree at the property line, this legislation does not seem to acknowledge any limitation for when a neighboring tree can impinge on the development potential of a neighboring site. Given that the city has the discretion to define a tree protection area as being twice the tree canopy, large portions of a site could be rendered undevelopable by a neighbor’s tree. No remedy for these situations is recognized in the code.

 

7. This legislation requires costly processes both in the permitting stage and during the construction process to protect existing trees, but it also allows removal of trees as needed to facilitate development. Most developers and builders will logically conclude that they should remove every tree possible from a site so as to avoid the costs and bureaucratic hassles associated with preserving them. If this legislation were enacted, it is easy to imagine a situation a few years down the road where people will be complaining about developers clear-cutting sites then calling for further restrictions on new development, when in fact the problem is the costs associated with tree preservation.

 

8. For the Seattle Department of Construction and Inspections (SDCI), the obvious outcomes from this legislation are likely to be:

 

• A surge in applications for hazardous tree removal, which is now the only way to get rid of a tree outside of new development.

• A massive increase in the workload for the SDCI arborist department, leading to a staffing crisis and long delays in permit reviews.

• Significantly increased costs for every permit application for survey, arborist reports, detailed exhibits from the architect, numerous correction cycles, increased permit review fees for all the staff time.

• Increased time required for permit approval.

• Increased disputes between neighbors. As the impact of off-site trees on development sites becomes more significant, the legal landscape becomes murkier, and the stakes become higher.

 

9. This proposal includes 48 new pages of rules. The costs, time, and bureaucratic headache created by it are all chasing after incredibly little benefit. Most of the benefits this legislation aims for could be achieved in a two-bullet point memo.

• New development should attempt to retain existing trees.  Development and construction activities should minimize disturbance of the tree roots underneath the tree canopy.

• Where sites cannot be developed to the full zoned capacity while preserving trees, such trees may be removed, equivalent trees must be replanted on-site, or a fee must be paid to plant them off-site.

 10.        This legislation is all stick; no carrot. The goal of the legislation is to protect existing trees, most of which came into existence simply because people like trees and so they plant them where they can. Instead of trying to leverage our general affinity for trees and encourage the planting of more of them, this legislation proceeds from an assumption that people will cut down trees at the first opportunity they have to do so. The City has an army of people that would be delighted to plant trees on their land, and to help plant them along parking strips and in natural areas. It offers no rewards to the landowners or developers who protect existing trees. On the contrary, it burdens them with page after page of new restrictions on the quiet enjoyment of their land.

Seattle Policymakers Microhousing Tour

 

Guest Post from Liz Pisciotta:

Monday, I had the opportunity to join a tour of microhousing projects that Neiman Taber helped organize. The aim of the tour was to show city policymakers examples of microhousing, from historical SRO (single room occupancy) buildings to today's SEDU (small efficiency dwelling unit) and congregate housing. Our goal was to highlight the need for affordable market-rate housing solutions and to demonstrate how Seattle's regulatory choices have negatively affected our ability to produce this housing. The tour group included leaders from several city agencies, including the Mayor’s Office, the City Council, Office of Housing, SPU, OPCD, SDOT, as well as several developers and architects who work on this building type.

For some time now, David Neiman has been writing about the importance of microhousing as an important tool in the affordability toolkit. Unfortunately, microhousing has succumbed to a slow death by a thousand policy cuts. While many policymakers understand the problem, politicians have been unwilling to expend political capital on the issue. Fortunately, this appears to be changing. The explicit purpose of the tour was to familiarize city leaders with the importance of microhousing as an affordable housing typology, show different scales of microhousing, and to illustrate how policy choices have increased the cost of microhousing or eradicated it altogether. The hope was that the agency leaders will be primed to collaborate on the mayor's effort to develop a comprehensive set of policy prescriptions and legislation to make microhousing more plentiful and affordable, enabling it to play a meaningful role in delivering affordable housing solutions for individuals and couples in core Seattle neighborhoods.

We all piled into a couple of vans and headed off to our first destination: The Helen, a traditional SRO building, built in 1908 and recently remodeled. The apartments at The Helen are simple bedrooms, most of them without a private kitchen or bathroom. Bathrooms and full kitchens are shared down the hall. Think of your typical college dorm set up but nicer. The building is a good example of basic housing that allows people to live in a desirable neighborhood at minimal cost. It's a three-story building with no elevator, no in-building waste room, no bike room, no exercise room, no frills. Buildings like this used to be commonplace and were a key type of workforce housing when Seattle was growing at the turn of the last century. Homes at The Helen rent for $800 to $900 a month, which is affordable to someone making less than the minimum wage (35%-40% AMI). SROs were built before much land use regulation even existed. Once modern zoning codes came along, SROs were pretty much outlawed.

Originally included in the tour but cut for time was Spring Park Flats, a townhouse-style pod micro. Seattle built a couple of thousand units of this type from 2008 to 2014, before the City Council passed legislation that killed off this type of project. These projects feature townhouse clusters with eight bedrooms and eight bathrooms in each townhouse. When they were developed, they were legal to build in any multifamily zone in Seattle, and so they sprung up in locations all over the city. This project type shares some important features with its historical cousin, the SRO. They were simple low-rise buildings with no elevator, no parking garages, and no amenities other than the basic shared kitchens.. They had low barriers to entry because they were small and inexpensive projects, so mom-and-pop scale developers were able to build them, and a lot of them got built very quickly. They delivered affordability, with rents for these simple pod-style townhomes currently ranging from $900 to $1050 per month (40%-45% AMI).

The first two projects are examples what builders produced in the past but were regulated out of existence. The next two projects on the tour are pretty good examples of what Seattle allows instead.
The tour’s next stop was Betula House, a SEDU apartment building. SEDUs are miniaturized studio apartments, and at Betula, they average about 250 sq. ft. per unit. Betula is a new and beautiful apartment building with well-designed units, large windows, and lots of natural light. In 2014, when Seattle prohibited pod-style micro townhouses and severely limited congregate housing, they paved the way for SEDU projects like Betula. Critics at the time complained that the resulting units would be larger, more expensive to build, and as a result, the rents would be less affordable. Unfortunately, the critics were right. SEDU units at Betula are currently advertised at $1400 a month, about 40% more than a room at Spring Flats. Betula was on the tour to make this point, but also made a related one. In the few years it took for Betula to go from the sketchpad to finished construction, new regulations have added so much cost and diminished so much value that the developer of Betula (Ben Maritz) estimated that if he tried to build a similar project today, he would not be able to get the project financed and built unless the rents increased to about $2000 per month.

The final stop on the tour was 500 Broadway, a brand-new congregate housing project located at Broadway and Jefferson, designed by Neiman Taber. The 2014 microhousing code revisions banned congregate housing from low-rise zones but permitted them in limited areas, such as NC3 zones where intensive development might provoke fewer complaints from constituents. 500 Broadway is an example of what happens to congregate housing when you try to build it in these areas of the city.

500 Broadway is an 8-story building, a height that necessitates an elevator. Once you introduce an elevator, accessibility codes trigger a requirement for all units to be accessible. That means larger doors, larger maneuvering spaces, larger bathrooms, and lots of special details throughout the unit. In rough terms, it means that the units get about 20% larger than they would otherwise, increasing costs, and often adding the square footage in the bathroom and other areas that are less than ideal for a small unit used by an able-bodied person. The height of 500 Broadway also requires more expensive concrete construction, which adds significant cost. Bicycle rooms are required to have about three times the amount of storage than building managers see utilized, so essentially, they are bicycle rack storage rooms. This is unfortunate because these spaces could be optimized to provide other amenities, such as a music practice room, an exercise room, or even another unit. We are proud of 500 Broadway, which occupies a prominent corner on First Hill. The building is clad in gorgeous manganese iron spot brick and Oko skin panels imported from Germany. Were these natural design choices for an affordable housing project? Perhaps not, but they were the way to get the project accepted by the design review board.

The basic market-rate units at 500 Broadway rent for about $1200-$1300 per month. To achieve a deeper level of affordability, Housing Diversity Corp., the project developer, struck a deal with the non-profit Enterprise Community Partners to become a partner in the project to lock in affordable rents. The subsidized units start at $1050 per month (50% AMI), which is a great deal to live in a beautiful new project like 500 Broadway with premium finishes, generous shared amenities, and killer views of the skyline. However, we also need to realize that, in just a few short years, we are in the frustrating position where bringing significant subsidies to the table still isn't enough to achieve the level of affordability that a project like The Helen or a townhouse pod building could achieve just through its simplicity.

As we hit the different stops on our tour, I and the other tour guides made sure to drive home a long list of issues that drive up the cost of microhousing. A sample of some key points:  

·       The update to the energy code introduced in 2021 has added about $20,000 of cost per unit — units which cost only $120,000 each to build. This summer will bring a new energy code that will increase costs more. As a firm, we are concerned about sustainability, in fact smaller, denser units are already much more efficient per user than larger units. Unit and user density should be taken into account in the energy code and the code should focus on the energy use per occupant.

·       Due to stricter requirements, many waste rooms now require waste chutes, compactors, and two-story tall internal truck loading docks. Smaller projects cannot absorb these costs and often lose meaningful amounts of housing to oversized waste facilities.

·      New pedestrian zone requirements add expensive oversized canopies and create empty commercial storefronts which are too deep, large, and expensive for small shop owners to lease.

·       Street rental fees to construct projects have ballooned from five figures to six figures.

·       The scope creep of street frontage improvements have piled lots of new costs to projects, often to replace improvements that were perfectly fine in the first place. In addition to the cost of the improvements, the cost of permitting the work is sometimes as expensive as the work itself.

·       It’s a positive thing that we are phasing out fossil fuels but now projects that previously didn’t need in-building transformer vaults require them.

·       Individual projects pay for million-dollar upgrades to aging utility mains, often well beyond the site extents.

·       Congregate buildings are required to provide 15% of the room areas as common space, which makes for a nice building, but these spaces are a luxury that shouldn't be required for basic housing.

·       Subsidized affordable housing are currently exempt from design review. The city should extend this exemption to housing projects that choose the performance MHA path.

·       Congregate housing should be allowed in low-rise zoning. This would provide a lower barrier to entry for multifamily developers and offer more affordable housing in more areas.

What most impressed me about the tour was the in-between times of the day — the conversations in the van or questions in the hallway — curiosity and support coming out of institutions that have previously been openly hostile to microhousing. There was a hopeful spirit of collaboration and excitement.
 
An oft-quoted estimate by the Puget Sound Regional Council is that we'll need to produce 800,000 new homes in the Seattle metro area by 2050. By that measure, we're falling behind year after year. As a city, we have regulated our way into a corner where we can no longer produce the housing we need at prices that the people who most need it can afford. The shortfall has gotten bad enough that the City's top leadership are finally paying attention and that's what this tour was all about. To hit that target and ensure that future Seattle will be a city that has a place for everyone, this is an all-hands-on-deck moment. Certainly, we will need publicly subsidized housing but we will also need market-rate solutions and public/private collaborations if we hope to dig ourselves out of this predicament. We will need to be creative and collaborative.
 
I'm typically a realist — there's a glass and there's water in it. Here’s how the glass currently looks: in the ten years since the term "housing affordability crisis" has been buzzing around Seattle, City leaders have generated policy after policy that has addressed the concerns of individual agencies and constituents in ways that have made all housing more expensive, often disproportionately affecting Seattleites who can afford it the least. This tour, however, made me cautiously optimistic that Seattle can produce effective housing policy and, once again, be a leader in microhousing.
 
-Liz