Archive for the ‘Zoning’ Category

How Grand is the Bargain?

Monday, October 19th, 2015

It’s great that a “grand bargain” on housing affordability is being discussed via the Mayor’s Housing Affordability and Livability Agenda (HALA) action plan. People are talking to each other, and the result might be relatively balanced. But we could do so much more!

For starters, we need WAY more focus on holding back development costs. Designated-affordable housing is important, but most renters and new buyers depend on market rates. HALA seems to recognize cost control only in small ways, and only to offset additive costs. It largely skips the big stuff. We’re risking a sizeable reduction in development volume as the market reacts to higher costs, which will mean higher rents.

We’ve already cut way back on micro units, applied design review to more projects, piled on the height bonus fees, limited above-grade garages (not complaining on that one), and enabled a lengthy entitlements/permitting backlog. Sidewalk protections (a good idea in theory) will add more cost by substantially impacting site logistics. Electeds appear shaky on accessory units and other flexible zoning in single family neighborhoods. We’re discussing moderate upzones but those won’t keep up with demand, so land prices will probably keep rising. We’re discussing expansion of the multifamily tax exemption but only for affordable units. Permitting might be streamlined a little.

Cabrini First Hill Apartments is a six-story complex for very low-income seniors. Photo courtesy of LIHI.
Cabrini First Hill Apartments is a six-story complex for very low-income seniors sponsored by the international Missionary Sisters of the Sacred Heart (Cabrini Sisters). Photo courtesy of LIHI.

A lot of truths in this debate seem to be ignored, unknown, or mistrusted because the most knowledgeable people might benefit from lower costs (developers, contractors) or higher costs (landlords, homeowners). People are therefore acting against their own interests, their city’s, and their constituent demographics’. But here goes.

Land prices won’t come down due to linkage fees. Some councilmembers have actually said the huge fees would be offset by cheaper land. But what landowner would see values plummet and decide to sell? Values will recover as rents go up and few properties are on the market, so owners will just need to wait, and not long.

Land is already scarce in areas that allow density and have demand. Prices reflect this. Theoretically we have room for many more years of growth, but many “buildable” sites aren’t on the market. Broader upzones would help address this – some combination of height, accessory units, and moderate additions to areas that allow multifamily. More than the small upzones in the plan.

Bonuses have to be compelling to be used. City leaders like to decide what a benefit is worth (for example alley vacations or bonus FAR), then charge an equivalent in fees, amenities, etc. At the political level, this allows them to be seen sticking it to developers. But they might not grasp the cost/effort/risk of pursuing the benefit. So we get debacles like the Hedreen hotel, where the City threw away 150 units of affordable housing for political reasons and by overvaluing its alley. And we get woodframes in highrise zones unless the market is truly booming.

Development costs affect the volume of construction – it’s obvious to most DJC readers but apparently debatable to others! Some people believe that any added cost or hurdle will have no affect on the amount of housing built, because profits are huge they say. Let’s break that into subsections:

Profits aren’t necessarily huge, or profits. Some developers get rich, but some lose their whole investments too (yeah but 2010 was so long ago!). It takes a huge investment to even consider building something, let alone pull the trigger. Some people will always begrudge developers for making money (or for giving people a place to live?), but it’s understandable why they’d only build if the potential profit was enough to risk a loss.

Financing goes where the money is. Developers need equity and loan partners. This money goes where the fundamentals look best. You might want big corporations to accept lower profitability and higher risk of loss, but that’s not going to happen, even if you stomp your feet. A big chunk of development backing comes from cuddly sectors like like pension funds; can we agree that those should stay solvent?

We’re piling on those costs. Linkage fees, height fees, parking below grade, 18 months of process and holding costs, sales tax, energy code upgrades, and so on, all well meaning but math is math.

We’re going to affect the ENTIRE rental market, not just the new stuff. When demand outpaces supply, even that non-updated 1965 masterpiece will be expensive. Keep supply going and it should be much cheaper.

There’s no simple answer, a point we all seem to agree upon. But speaking generally, let’s do things that hold pricing back on market rate while also increasing production of subsidized units.

Let’s expand the subsidized elements, but do so without adding to the costs of market rate housing. A larger housing levy is a great start, and spreads cost to all of us rather than disincentivizing new housing. So does the multifamily tax exemption. But let’s also pay attention to market rates. We can add capacity for free by upzoning and not attaching penalties, reducing land cost per unit. We can let micros do their magic. Accessory units can help both the new residents and the landlords. Yes, even if some of that doesn’t look enough like “sticking it to developers!”

Seattle might keep going

Monday, April 27th, 2015

The duration and intensity of the Downtown Seattle development boom is getting a little surprising, beyond even my optimistic guesses from a few years ago. This isn’t just another Seattle-type boom. But here’s the kicker: things seem poised to keep going.

That’s saying something. Between offices, housing, and transportation, this is clearly the busiest we’ve ever been. And we’re four years into it, vs. the typical hard stop far short of that.

The current wave is over 7,000,000 square feet of office and 15,000 housing units by my napkin count, if you gerrymander things up Dexter and Pike/Pine a little, including projects that are at least in active site prep. For offices I believe it’s a record for greater Downtown. For housing it’s a modern-day record by a factor of two.

So why the optimism?

First is tech. Amazon is obvious. But there’s also a pretty stunning wave of national or global tech companies setting up or expanding tech offices in greater Downtown. These companies need talent, and the word is out about Seattle. Even if one of our giants stumbles, is there any doubt that other firms would swoop in to hire waves of their people? This is giving developers the confidence to pursue additional projects at a high rate.

Second is a continued inflow of other companies into Downtown from around the region, for example Weyerhauser and MulvannyG2, as well as Expedia though it’s more distant. Companies value Seattle locations for stated reasons like recruitment, business synergies, public transit, and lunch options. Other local nodes are doing a good job of developing downtown-type amenities and synergies, but greater Downtown Seattle has a strong pull right now. (Bellevue will be fine of course; Downtown Tacoma, Downtown Everett, Kirkland, and others are doing a lot of great things too.)

There will be headwinds, like traffic. As the workforce grows, it’s clear that driving can’t grow much with it because there’s no space. Transit will need to improve a lot. Thankfully every new apartment helps reduce the number of inbound commuters.

On that note, housing will keep booming. New office buildings mean a lot more potential Downtown residents, both directly and indirectly. As more office workers compete for the same street, freeway, and transit space, the idea of a six-block walk to work becomes more attractive for longtime workers too, all the more so as district after district adds more residential mass and related services. Some point out that 25-year-old urbanites often become 30-year-olds with kids that want houses, but good news…today’s 20-year-olds will replace them. And how about baby boomers becoming empty-nesters?

Now about condos. Apartment pessimists often point out that renters might start buying in large numbers, sometimes implying that they’ll start picking houses. But many love urban living, roads aren’t getting any easier, and houses and house-ready properties aren’t cheap. If people start buying, many will choose condos. The old presale-based financing method isn’t viable yet, but equity-rich developers can still get loans, so condos are already coming back. We’re at the very beginning of what could be another wave, minus some of the feeding frenzy or zero-down formats that contributed to the bubble and bust.

The current wave of Asian (often Chinese) residents and investors will help our construction volume substantially, as Seattle becomes more of a global destination. Our prices are half of those in Vancouver or San Francisco, and should remain far lower because we can add supply relatively easily. Further, this is helping our status as a business and tourism center across the board, for example by bringing in more tech workers.

Hotels are also just starting. So far the new inventory only deals with 2014’s overly-high occupancy rate, not future growth. Seattle is becoming a bigger tourist destination, including stunning growth in overseas airline traffic last year and so far this year. We plan to build a second convention center (aka the “addition”). Our growing office base brings visitors as well as relocations and interns who live in hotels for weeks or months. Who knows where our hotel demand will go from here, but “up significantly” seems like a good guess.

Biotechs are talking about a lack of space again, particularly with the old Amgen campus off the table. Hospitals have slowed their construction programs after the last wave, but new significant construction is anticipated again at Virginia Mason, Swedish, and Harborview, including medical offices.

The convention center, a new ferry terminal, and post-viaduct streets and public space projects are all a couple years out. Imagine having those to soften any downturn.

Here’s another reason: we might not have a national crisis or massive overbuilding. People love to quote 1982, 1990, 2001, and 2008 like we’re automatically headed for their equivalent. The first dramatically overbuilt hotels and condos, the second did the same for offices in part because of the CAP initiative that curtailed further development, the third involved both a tech bubble and 9/11, and the fourth involved the mortgage crisis and a narrowly-averted depression. We could have another crisis, like Amazon or the global economy crumbling, but nothing looks imminent. As some point we’ll overbuild in key subsectors, but we have a good chance of avoiding the “brick wall.”

Of course all of that is independent of potential problems like the big fees the City might implement, a lack of construction workers, cost escalation if it exceeds market rents, higher interest rates, and so on. Challenges can happen on many fronts.

So caution, always. But so far so good.

My Micro NY is made of prefab modular

Monday, February 23rd, 2015

Brookyn firm nArchitects has designed New York’s first micro-apartment complex. The project, called My Micro NY, is made of prefabricated modular units that will be stacked into place this spring and go on the market this summer. The 55 units are 260 to 360 square feet, with rents expected to be $2,000 to $3,000.
For this, renters get kitchenettes, high ceilings, big windows, sliding glass doors, and Juliet balconies along with common spaces and access to storage units.
This is according to a recent story in The New York Times, which says the project is being watched by housing advocates and developers because of its modular construction and because it could mean cheaper housing options in the city where in 2013 about half of all residents were single. A total of 22 of the My Micro NY units will be designated as affordable housing.
The article mentions Seattle as a leader in the micro-apartment movement, and points to the city’s aPodments.

This shows how My Micro NY units are put in place. Images courtesy of nArchitects.
How would you and your stuff fit?
Living in 260 to 360 square feet.

Microhousing: good or bad?

Wednesday, October 22nd, 2014

How Small Are They?

Microhousing: good or bad?

Did you know Seattle is the pioneer in microhousing – that is apartments with an average size of 150 square feet?  An article in Politico says this is because of our real estate boom, with a growing population of millennials, permissive city codes. Because of those permissive codes, Seattle’s microhousing units have the smallest square footage in the country.

Not everyone loves seeing these microhousing units popping up in their neighborhoods, tucked in between single-family housing.  What looks like a townhouse with eight small apartments could actually contain 64 units.

As reported in the DJC, Seattle City Council approved new regulations requiring micro units have a minimum of 220 square feet, two sinks and a food preparation area that includes “a cooking appliance.”

Sightline Daily blog says the city’s going backwards with these new regulations. Sightline Executive Director Alan Durning asks, why do we need two sinks in a 220 square foot apartment?

What do you think?



Will Council Raise Rents for Everyone?

Thursday, September 18th, 2014

It’s a repeated movie scene: soccer player dribbles down the field, overcoming all opposition and ignoring the shouting onlookers….and scores in the wrong goal.

City Council members say they want Seattle to be affordable, but the Land Use Committee is blindly heading the wrong way. They’re going to increase residential and commercial rents via massive development fees and new restrictions on the best way the market can provide cheap housing.

“Massive” is the right term. Basically, all multifamily and commercial developments would be subject to fees ranging from $7 to $22 per square foot (or alternatively $5 to $16), depending on neighborhood. Averaging out the higher version, that might be a 5% increase in development cost. Or development onsite, which tends to be much more expensive. The fees would apply to the whole building, vs. the current method of fees only above the old height limits. Houses would have no fees of course.

Micro project on East John, by DPD

The result is obvious. Higher rents won’t apply to just new buildings, but to every person or company that rents in Seattle. In a growing city, rents tend to follow replacement cost, plus a premium if vacancies get too tight. Replacement cost for all types of space would go much higher, even with a likely dampening of land prices. The fees would reduce construction until demand pushed rents up enough, then we’d start building again. It would be another “great reset” to higher rents. Some people counter that incomes are flat, but that’s not very relevant; in high-demand cities, people tend to pay a larger percentage of their income. The question of “what will the market bear” for a necessary product is based on customers’ pain thresholds, and prices rise until enough people let go.

Fee proponents seem to think the projects will keep flowing and costs don’t translate to prices. This is pure ignorance. Even without fees, the average project is on the edge of happening or not happening even in the weeks before it breaks ground. What will interest rates be? Will the market soften in the next two years? Is someone at DPD going to require an expensive change? Will the equity partner take the leap necessary to build offices on spec? We contractors hear about many projects that never even make the DJC because the pro forma doesn’t work. Once projects are public, or even permitted, a great many still never happen. There’s good reason behind that, and not just that returns might be disappointing – sometimes developers and financiers lose their shirts, as many did a few years ago.

Owners of existing buildings and homes would celebrate the fees of course (seriously, does the Land Use Committee know this?). Less competition means higher rents and higher building values. My condo would be worth more too. Commercial building investors love to buy buildings in areas with “high barriers to entry” for this reason.

So, rents would go up substantially for 130,000 renting households in Seattle (my guesstimate) and any business that rents space. That’s quite a price for a relatively small number of subsidized units.

We can do much better. There are methods that don’t restrict housing supply or punish companies for locating in Seattle. The existing housing levy is part of that; can it be expanded? How about making it easier for homeowners to build accessory units? How about micros? Or expanding the zones where townhouses can be built, even a little? Each can help fill part of the affordability gap for different types of people.

But most of those things are too scary for the Land Use Committee. The loudest voters want free, empty parking in front of their houses, and no “renters” (sometimes a euphemism) living nearby. Now micros, despite their popularity, have been slapped down already, and the Committee (motto: “You’re out of LUC”) wants to all but destroy the model entirely, with added parking, sinks, square footage, and entitlement process.

Some of that is understandable in the context of negotiating tradeoffs, like parking in certain zones, or even the design review process that adds costs, duration, and uncertainty to every project in Seattle. Other parts make no sense at all. Who does it help to outlaw the smallest micros, which are basically the size of a dorm room, minus the snoring roommate? If someone can afford 150 square feet but not 220, it’s off to the friend’s couch? (PS, as a donor to some of our outstanding nonprofits, I’d like to see money spread further with smaller units, like micro sizes for single people and micro+bedroom for families, with a focus on temporary rather than lifetime housing.)

About micro prices: Some say $700 isn’t really affordable (I’ve heard numbers from $600 to $1,000 for bigger units). It’s not low enough for everyone, and many people aren’t suited for micros. But it’s definitely a gap in our housing supply, and these units are popular. It’s notable that rents often include utilities, internet, and significant shared space. And don’t forget that the market is otherwise averaging over $1,400 for apartments. All things considered, $700 is a great price to live in a core Seattle neighborhood.

Hopefully the LUC and full council will listen to people beyond its own echo chamber and the consultants who want us to emulate the nation’s most expensive cities. The Mayor has shown signs of being reasonable. Let’s not look back on 2014 as the year we flubbed ourselves into higher rents for all.

IZ and Inclusion: Time to Find Better Ideas

Wednesday, August 20th, 2014
Alcyone Apartments in South Lake Union. Photo by author.

Recently the Capitol Hill Housing Improvement Program (CHHIP) decided they are no longer endorsing incentive and inclusionary policy to create affordable housing. Is it possible that even non-profit housing agencies are seeing the light on these bad policies?

Over the course of the first half of this year we’ve spent a lot of time informing the press and public why Incentive Zoning (IZ) and inclusionary zoning are tools that won’t work and the problem they are intended to fix is one we don’t have.

Here’s a summary.

Incentive Zoning

Wrong Tool

Wrong Problem

  • There is no housing crisis for people earning 60 to 80 percent of Area Median Income
  • The real problem is for people who are poor, earning 50 percent or less of Area Median income and families

Inclusionary Zoning

Wrong Tool

Wrong Problem

The evidence against the continued use of Incentive Zoning is overwhelming; it is a policy that will neither lower prices nor help poor people. Instead it adds costs and risks to market rate housing that is currently meeting the demand for housing for people earning 60 to 80 percent Area Median Income.

It’s time to stop and come up with a better analysis of our housing challenge as we plan for coming growth. Smart Growth Seattle has gathered 250 signers for our petition calling for a comprehensive housing plan.

Let’s stop policies that would reverse microhousing development, building in our low-rise zones, and increases in fees on new growth and let’s come up with a plan!


Can growth reduce traffic?

Thursday, July 3rd, 2014
Via6, photo by Tim Rice

Often we look at development and wonder what will happen to traffic. This comes up a lot regarding greater Downtown Seattle, particularly the fast-growing northern portions. Actually, the truth might be pretty good.

The reasons are primarily these: 1. Congestion is mostly about peak times, and some buildings’ users spread their travel throughout the day rather than concentrating at rush hour. 2. A large percentage of growth does not add trips, but rather makes them shorter.

Category 1 includes hotels (a big growth area) as well as colleges, hospitals, retail, and art/tourist attractions. While these have peak times, they mostly spread activity throughout the day and night. Even at hospitals, only portions of the staff work bank hours, and few patients arrive at 8:00 am. Hotel guests arrive all day and evening, stay multiple nights while getting around mostly on foot, then leave throughout the morning. Destination retail is often busiest on weekends. Concerts are mostly at night. College students and faculty keep varying class hours. All of these uses avoid making rush hour much worse, while also activating our parks, spreading their lunch dollars to the slower times, and so on.

Housing falls heavily into Category 2. Greater Downtown residents are often greater Downtown workers. They’d already be traveling to these jobs daily, but living nearby means they can walk, use transit, bike, or drive a short distance instead of a long one. Working residents of the three major Downtown zip codes commuted on foot at rates of 47.6% for 98104, 34.1% for 98101, and 32.3% for 98121 in 2012 per They drove alone (often a much shorter distance) only 22.0%, 21.0% and 38.1% of the time. The gap between those figures was mostly transit, which is also much more convenient when you’re downtown. Working at home is also a major category. Expanding to the north, the 98109 area includes South Lake Union but also half of Queen Anne Hill, so its 13.7% walk and 47.6% drive alone rates are less relevant; perhaps SLU’s numbers are more like 98121’s.

Of course, those figures include people who commute to jobs far away from Downtown, who must represent a big chunk of the drivers and transit riders. The pedestrian numbers should be much higher if you only count those who also work Downtown. As for outbound commutes, these are added trips, but might peak a little earlier than inbound commutes (like 7:00-7:30 instead of 7:30-8:00?), and use the less-congested half of Downtown streets. In any case, it seems likely that most new Downtown residents also work here, so there should be a net reduction in traffic.

Many residents are in Category 1 as well, largely traveling outside commute times. This would include many retirees and students without jobs, who are apparently not counted in the commute statistics. These people seem likely to have low driving rates as well. Category 1 would also apply to many workers with non-traditional hours.

This is all relevant to transportation to and from greater Downtown as well. Turning thousands of 20-mile drives into two-mile drives and half-mile walks must be really helpful. If the current greater Downtown housing boom is around 11,500 units including tendrils up Dexter and Pike/Pine (my guesstimate), how many fewer inbound commutes might that represent, and and how many tax dollars might we avoid in future road projects, let alone less-jammed public transit? Between that savings, construction-related sales taxes, and new tax base upon completion, it’s a wonder we charge development fees rather than incentivizing new housing along with nice thank-you letters.

Offices (as well as laboratories) are the other big category of growth, and of course they contribute to rush hours. But our region needs their economic engine. That engine is best served by allowing companies to locate where workers want to work and companies can be near each other. Locating downtown means they’re transit-accessible and many employees can walk, meaning fewer cars on the road overall. They key is to balance office growth with housing growth. It would help if some companies changed their start times a little, much like the construction industry already has.

The concept of living Downtown is supported by demand. Apartments keep getting built because they keep filling up, at good prices. Maybe people like those leisurely walks to work, and choosing from the Downtown smorgasbord on the way home. Maybe they like walking out their doors on weekends and already being somewhere.

It works in other places too. Want less traffic in Redmond? Keep adding housing in that nice downtown area (seriously, take a look) as well as around Microsoft. Downtown Tacoma? Same thing. Everybody wins.

Should you mix affordable and upscale housing?

Wednesday, October 16th, 2013
Outdoor seating and landscaped areas would surround the ground floor of the R.C. Hedreen Co. project. Image courtesyof LMN Architects

Should “affordable” housing be mixed with high-income housing within the same building? That’s the subject of a short video by the Council on Tall Buildings and Urban Habitat at

Addressing the question are Nigel Biggs of CBRE, Harry Handelsman of Manhattan Loft Corp., Christoph Ingenhoven of ingenhoven architects, Ian Simpson of Ian Simpson Architects, and Rafael Viñoly of Rafael Viñoly Architects. The video is part of a monthly series by the CTBUH.

In Seattle, R.C. Hedreen Co. has proposed including affordable units in a project that will not have upscale apartments or condos, but will have a hotel.
The project is a 40-story convention hotel complex at Ninth and Stewart that will have a five-story podium with a 35-story, 1,680-room hotel on the south end and 154 units of housing on the north end, reserved for people making 80 percent or less of area median income. Hedreen is building the north end units to get higher density through a city incentive program.

“Vanity Height” added to more skyscrapers

Thursday, September 5th, 2013

The Council on Tall Buildings and Urban Habitat has looked at the increasing trend towards extreme spires and other extensions of supertall (300-meter-plus) buildings that do not enclose usable space, and created a new term to describe this – Vanity Height, the distance between a skyscraper’s highest occupiable floor and its architectural top, as determined by CTBUH Height Criteria.

Burj Al Arab in Dubai, United Arab Emirates. Photo by Nicolas Lannuzel

Here are some key findings of the study:
• At 244 meters, the vanity height of the Burj Khalifa, Dubai, UAE, could be a skyscraper on its own – in fact, it would be Europe’s 11th-tallest building.
• The Burj Al-Arab, Dubai, UAE, has the greatest vanity ratio of any supertall building – 124 (39 percent) of its 321 meters is devoted to non-occupiable space above the highest occupiable floor.
• Without their vanity height, 44 (61 percent) of the world’s 72 supertalls would measure less than 300 meters – thus losing their supertall status.
• United Arab Emirates clocks in as the nation with the most “vain” supertall buildings, with an average vanity height of 19 percent.
• New York City, USA has two of the tallest 10 vanity heights, and is set to gain a third with the completion of One World Trade Center in 2014.
• According to CTBUH Height Criteria regarding telecommunications towers, a 50 percent vanity height would deem any structure a “non-building.”
• The “vainest” building overall in the CTBUH database, although not a supertall, is the Ukraina Hotel in Moscow, Russia – 42 percent of its 206-meter height is non-occupiable.

Two steps back on affordability?

Wednesday, April 24th, 2013

If Seattle aligns on anything, it’s affordable housing. We pass our levies by wide margins, and seem to agree that our city should be available for all income levels, whether for empathy, worker availability, or other reasons. We might also agree that the SHA and non-profits do a good job leveraging our money, and the levies aren’t enough.

Triad Capital Partners project on Capitol Hill. Rendering courtesy of grouparchitect.
Beyond that things get sketchy. In classic Seattle fashion we mix steps forward with steps back. The council is working on two major issues currently – regulation for micro housing projects, and the South Lake Union rezone. In both cases we risk shooting our feet.

The South Lake Union rezone, which got committee approval this week, involves fees of $21.68 to $29.27 per square foot (plus inflation) for space above the original height limits. Let’s look at that. Ideally a tax system should put less burden on things you want to encourage, and more burden on the rest. So where do we put the maximum burden? On new construction projects, and the homes and jobs they’ll contain. On the housing side we’re addressing affordability by directly making this housing more expensive for most people, and disincentivizing new supply, which is our greatest weapon to avoid San Francisco’s fate. On the commercial side, we’re disincentivizing the job creation that supports our overall tax base, and the job centralization that’s crucial to maximize walkability and leverage public transportation. We also risk pushing construction outside the neighborhood, perhaps to other municipalities, losing that sales tax revenue.

Outside the A/E/C/RE industry, people seem to think the added heights are an easy windfall, and sometimes they are. But going tall also has downsides – substantially higher cost per square foot (even before the fees), more space to fill, longer construction duration, etc. On top of that the fees add perhaps 6-8% to total development cost above the old height limit. Taking advantage of the new heights therefore assumes high-rents, and requires a bigger bet. The math will work in some cases, such as a big eager tenant wanting to expand across the street, or apartments with permanent water views. Other projects will likely find that six stories with woodframe pencils more easily, and limits risk. Maybe this is why developers continue to advance new plans to build lowrises in South Lake Union.

So what’s a better solution? If we can expand the housing levy, let’s do that. The voters will support it. And maybe we should be less reticent with one-off deals like Vulcan’s Valley Street swap, or similar versions. And then there are micro units.

Miraculously, a chunk of the affordability puzzle is taking care of itself. Micro units of various types are proliferating and filling up with renters eager to pay rates otherwise unheard of for centrally-located homes in good repair. This includes typical units that are simply very small, as well as the “rooming house” concept, where one “unit” might include eight bedrooms rented separately, with a shared kitchen to augment in-room kitchenettes.

Typically, rooming houses stay below a certain unit count to avoid the design review process and fit perhaps 40 homes into what would otherwise be a fraction of that, in multifamily zones. They often take advantage of what has been called a loophole, but it’s also an essential part of building at the most affordable rents. Seattle’s process costs a lot of money, with design review being part of that. First there’s the added time between tying up land and breaking ground, which involves carrying costs in the tens of thousands of dollars. Second, process means uncertainty about going forward at all, in part due to reduced flexibility in market timing. Third, design review means a choppier, less efficient design process, with higher fees. Of course with more units, the land cost is spread among more homes. Much of this relates directly to development cost. The rest affects cost indirectly – if we reduce supply, we cause scarcity, which will cause higher rents.

Basic unit sizes might become a debate topic. Homes are often in the 200 square foot range (similar to a typical hotel room), and some down to 100 square feet or so. But why is that controversial? Wealthy suburbs have often mandated square footage minimums to keep the poor folks out and protect property values. Many people seem offended at the idea that some renters would live in places they themselves wouldn’t. But surely Seattle isn’t an exclusionary, authoritarian city in those ways. Others talk about humane living conditions, forgetting that $10 per hour might otherwise mean mom’s basement, three roommates, and/or spending two hours a day commuting. Still others complain that their public street parking will get tougher, as the new buildings generally have little or no parking. The last point is at least understandable human nature, though the existing residents have no more claim than anyone else. What’s left? Is there a valid reason to not allow even a 200 square foot home, or even 100 square feet? Why aren’t we celebrating these as a choice for people to live independently, and with less energy and stuff?

(Disclosure: I work for a contractor that builds highrises, but have no connections to the micro trend.)