2019 AIA Housing Forum Presentation - The Roost: Micro Housing, Community and Cultural Space

The summer we were honored to be given a showcase at the 2019 AIA Housing forum to present The Roost: Micro Housing, Community, and Cultural Space. We gave a 30 minute presentation about the project including some background behind the project, the challenges inherent in designing for small spaces, and the tensions inherent in playing the dual role of architect / developer.

Video of the presentation (and of the other presentations given at the forum) is available at the AEC Knowledge website

https://aecknowledge.com/courses/140

Housing Choices for Everyone

This summer The Master Builder's Association invited me in for an interview to talk about The Roost for a video series called Housing Choices for Everyone. It is aimed at educating the public about the changing landscape of urban housing and the new housing types that help serve the needs of ordinary people. Its a brilliant project and I'm really proud to have been asked to participate.

Ben Leiataua, the resident featured in the video, is one of the many artists who make their home at The Roost. Ben spent many years working as the marketing director for a casino before deciding to change direction and lean into the craft of singing and acting more fully. The Roost provides him with a modest home in the city from which to pursue his art in the company of other people who share his passions and interests. Ben's work is in Seattle, but before he moved to the Roost he was living in Auburn, where he had been commuting 60 miles a day in order to find affordable rent. Ben's story is fairly typical in that respect. Over 75% of our residents moved to The Roost from distant neighborhoods or exurbs around Seattle.

Later this fall we will publish a series of stories from The Roost, introducing some of our residents, and telling their "housing story". The goal is to put a human face on the answer to the question "who lives in micro-housing". Coming soon to a blog near you.

https://www.youtube.com/watch?v=n6fWvtvz5NE

Seattle Microhousing "Fix" Eliminates 830 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 12% 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 Market Rate Units	SEDU MFTE Units	Total
Unit Count	160	23	1,077	33	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 $253 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).
• 731 units of 55% AMI are not created (affordable to someone making $34k/yr).

Multiplied over ten years, this represents the loss of 8,300 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.

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.

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 (23^rd & 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.

Tiny Houses vs Permanent Housing

Tiny Houses and Tent Cities are in the news this week.  Councilmember Sally Bagshaw has called for a massive expansion of temporary encampments throughout the city.  Meanwhile, a consultant hired by the Mayor has declared this strategy a distraction, one that dissipates our energies and drains resources from the task of building permanent housing facilities that can support a Housing First approach.

Last month our office entered a tiny house design competition in Chicago.  The competition brief called for a 10-12 tiny house village for homeless youth, built on a large city owned lot, with a budget of $60,000 per unit.  Our entry was a  micro-housing apartment, delivering 3x the amount of housing on less land at the same cost per unit.  You don’t win many design competitions by disputing the premise. We entered it to make the point that cities have huge housing needs and very expensive land; that they need housing solutions that can scale to the size of the problem and make the most effective use of scare resources.  Donated land, non-profit services, volunteer hours…these are all finite assets.  We do ourselves no favor when we fail to use them efficiently.

A tiny house village can provide temporary shelter as a hardened, secure alternative to a tent, but that is about as far as it goes.  Beyond that we need permanent housing.  One of the reasons our firm has jumped in with both feet into microhousing is that we see it can serve a huge range of housing needs at the affordable end of the housing spectrum.  Seattle used to have thousands of units of SRO housing that served the affordable end of the housing market.  In the 1970’s we shut most of these down out of safety concerns, but we have replaced them with nothing. It’s about time for us to get started.

Housing Affordability, Supply, and Quality. Is Seattle's Lowrise Code Helping or Hurting?

 

Anyone who has ever been trapped in a corner with me at a cocktail party can tell you that I spent a good deal of time helping to shape the 2011 update to the lowrise zoning code.  The new code has radically changed the work of our office for the better.  We have been able to design projects with higher design quality, more density, better affordability, in a wide variety of formats that serve niches ranging from micro-housing apartments to high-end ownership townhomes.

That said, one of the goals of our office is to innovate new ideas that are replicable. We don't just want to design pretty unicorns - we are trying to develop archetypes that other architects, builders and developers see as useful models for their own work. I sat down a few weeks ago to write an article about our Marion Green project and the other Terrace Courtyard projects we have designed with the goal of promoting the idea to others.  I showed the article to my friend Alan Durning over at Sightline.  He expressed some interest but was more curious to learn about the townhouse market as a whole, and how our work compared to the other kinds of housing being produced.

This led me to do a deep dive into the city records, looking at the last 5 years of building permits since the new code went into effect.  After a great deal of sorting, filtering, and brute force downloading, I compiled data that shows the amount and type of housing we are producing in our lowrise zones.  I was surprised to discover how much we are distorting the type, quality, and density of our ownership housing via our regulatory rules. 

Thanks to Dan Bertolet from Sightline who took my ramblings and turned them into cogent reporting, no small feat when trying to make land use policy into something readable. You can see the whole article over at the Sightline blog:

http://www.sightline.org/2016/02/24/a-good-way-to-make-housing-scarcer-and-more-expensive/

HALA MF8: Remove Recently Created Barriers to the Creation of Congregate Microhousing.

Ethan Phelps Goodman wrote a piece over at the Urbanist this week confirming the trend on microhousing that I wrote about last year:  Since passage of restrictive new legislation in late 2014, development of small housing units has continued, but production has shifted over from congregate housing into a Small Efficiency Dwelling Unit (SEDU) format that produces larger units with correspondingly higher rents.

The HALA committee saw the preliminary data on this trend and responded by including a goal in the report for the city council to revisit the new zoning rules that have radically reduced the production of congregate housing.

Congregate housing development is widely recognized as the least expensive form of housing that the market can produce. Rents typically range from $700 to $1000.  For projects that participate in the MFTE program, 25% of the units are locked in at $628 rent, including utilities. As a point of reference, $720/month* is affordable rent for someone making $15/hr minimum wage.

Before the 2014 rules curtailed the production of congregate housing, Seattle was producing over 1000 units per year, all of it affordable at 40%-65% AMI. Since the new rules came into effect, production has slowed to a trickle. Neiman Taber currently has four congregate housing projects in the building permit review process, which represents the entire current production for the whole city.

Seattle is embarking on a major initiative to try to enact a Mandatory Inclusionary Housing (MIH) program and the city-wide upzones that go along with it. This process will entail years of public hearings along with the customary resistance and rending of garments from neighborhood and homeowner groups. Politically, it is a huge lift, one of the more ambitious changes that the city has ever contemplated.

If we manage to pass the MIH program into law, it aims to produce 600 units per year of 60% AMI housing. By contrast, congregate micro-housing could produce almost twice that number of units, at deeper levels of affordability, with no public subsidy whatsoever, and all we need to do to achieve it is to remove the handcuffs.

* The definition of affordable is when housing cost is less than 30% of household income. $15 per hour x 1920 hours per year x 30% ÷12 months = $720/month.

Forget reinventing...How about re-legalizing Microhousing?

Casey Jaywork from the Seattle Weekly wrote a great article last week describing how Seattle has all but banned the production of congregate micro-housing and has refused to take up the HALA committee recommendation to revisit this policy. The article features a discussion of our Yobi Apartments project and how last year's micro-housing legislation has made it all but impossible to develop more projects like the Yobi.

The article used data from a DPD housing report that captured production through May of 2015.  I took that report and updated it to the current day, filling in some missing projects and adding in all of the 2015 pipeline. Here's what I found:

Annual Totals	Congregate Units	SEDUs
2010	79	0
2011	168	0
2012	755	32
2013	1804	82
2014	1203	251
2015	124	902

One surprise: Virtually all of the new congregate housing projects are coming out of our office.  This has nothing to do with us capturing market share; our workflow on congregate housing projects has been fairly stable. Rather, it is a reflection of the rest of the market being driven away from congregate micro-housing and shifting their efforts over to SEDU production.