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