How Seattle Un-Killed Microhousing

 

Today, Liz and I had the unique opportunity to visit the mayor's office for the signing ceremony of new legislation complying with House Bill 1998. This landmark bill requires cities to permit co-living (also known as congregate housing or microhousing) in any zone where multifamily housing is allowed.

This moment marked the closing of a narrative arc that began in 2014, when anti-microhousing rules first entered the land use code. Over the years, anti-microhousing sentiment gave birth to increasingly restrictive code interpretations, director’s rules, and agency policies. What started as a steady stream of microhousing development dwindled to a trickle and, eventually, to nothing at all.

For the past decade, I’ve spent countless hours on this issue—writing articles, developing projects, giving tours to public officials, strategizing with councilmembers and the mayor's staff, debating with the building department, and making my case to the construction code advisory board. In all that time, I didn’t move the needle even a fraction. I often felt we were winning the argument on merit, but it seemed clear that no one was willing to spend an ounce of political capital to reverse the damage already done.

This year, everything changed. With the passage of HB 1998, the Washington State Legislature bypassed city-level resistance entirely, mandating that cities allow co-living in any zone permitting multifamily housing of six or more units. In one sweeping move, Seattle’s microhousing ban was not only undone—it was effectively nullified for every city in the state.

This outcome didn’t happen by magic. It was the result of work by many dedicated individuals. The policy wizards at the Sightline Institute crafted the legislation, built coalitions, and rallied sponsors. Representative Mia Gregerson and Senator Jesse Salomon championed the bill, lending their names and political capital to its success.

The tours we gave to officials like Mia and Jesse played a role by demonstrating how co-living buildings could be both affordable and desirable places to live. Liz Pisciotta from our office designed the interiors that humanized these spaces, making them warm, inviting, and approachable. Her work undoubtedly helped seal the deal.

Development partners and clients like Ezra and Selome Teshome, Brad Padden, Dave and Sara Sharkey, Charlie Waterman, and Ken Tousley also deserve recognition. Their belief in our vision helped us create projects that demonstrated what co-living could achieve.

And no list of credits would be complete without recognizing Roger Valdez. Roger was the pioneering advocate—the Ur-advocate—of microhousing. He laid the foundations of the economic and moral case for microhousing that brought us to this moment. He did so long before it was popular, and often in the face of overwhelming opposition. By the time the rest of us were getting suited up, Roger had already been in the arena for years.

Roger wasn’t one to prioritize politeness or winning friends, and people like that don’t often get invited to shake the mayor’s hand. But make no mistake—Roger deserves a tremendous amount of recognition and credit for getting us to this season.

Speaking of hard truths…

While this legislative victory is significant, the path forward remains challenging. Over the past decade, Seattle missed the chance to build thousands of microhousing units during an economic upcycle. Now, although the zoning obstacles have been removed, the broader economic and regulatory environment makes development almost impossible.

For one, skyrocketing costs are a major barrier. The recent leap forward in energy code requirements has added about $25,000 to the cost of building each new unit. For standard apartments costing $250,000 per unit, that’s a 10% increase—painful but manageable. But for microhousing, where units are budgeted at $100,000, it’s a 25% cost hike. That would make most projects financially unviable or would raise the rents to a point where it no longer serves its essential function -- housing that is affordable to minimum wage workers.

Then there’s the multifamily tax exemption (MFTE) program, a program that is an essential tool for workforce housing development, but which has long been hostile to microhousing. The latest proposed update outright excludes buildings with units under 400 square feet from eligibility. This is untenable, as nearly every microhousing project we’ve developed in the past decade has relied on MFTE for financial feasibility.

The broader rental market has also become increasingly troublesome. Enhanced tenant rights and anti-eviction measures, while well-intentioned, have made it difficult for landlords to operate sustainably. Some renters now correctly perceive that paying rent is somewhat optional, leading to a huge spike in delinquency rates. Microhousing operators have been hit especially hard. Every operator I know has stories of tenants living rent-free for years due to backed-up courts, stringent eviction laws, and aggressive legal tactics employed by tenant advocacy groups.

These changes have fundamentally broken the business model for renting to low-income tenants. Banks and investors have noticed. Without a fairer balance between landlord and tenant rights, it will be challenging to convince investors and lenders that development of new microhousing can be a viable business.

All that aside…it was a good day. Today, we’ll celebrate. Tomorrow, we’ll get back to pushing that rock up the hill…

Helping Explore Seattle Social Housing

Earlier this year we reached out to House our Neighbors to answer an open call for architects to help explore the development possibilities of vacant land owned by the city to illustrate how they might be developed by the newly formed Seattle Social Housing Developer.

House Our Neighbors recently launched a new website to show off that work. To learn more please visit: https://www.houseourneighbors.org/envisioning-social-housing

This work is also featured in an article in The Urbanist that talks about the upcoming proposition to fund the SSHD, which will be on the ballot in February 2025. It's definitely worth a read: https://www.theurbanist.org/2024/11/14/seattle-architects-unveil-designs-for-social-housing/

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.