Urbanization Coming To A Suburb Near You

BY CHERYL LOTZ
Palmer, Groth & Pietka

As recently as 10 years ago, you could buy a new, decent-sized house on a quarter-acre lot for a reasonable price in the Seattle area. Those halcyon days are gone forever. Today, if you have $150,000 or less to spend, you will probably have to drop most of King County and add Monroe or Spanaway to your locational shopping list.

If you want to live in King County, your options are limited. You can buy a condo, a fixer-upper, a pinchy little house, or you can become an urban pioneer in a less desirable neighborhood.

When the Legislature passed the Growth Management Act, few people considered how it would affect housing in our region. The urban growth areas provide a fixed supply of buildable land to accommodate a steadily growing population. The obvious result is higher land prices which, in turn, leads to increased density. But what form will this increased density take?

One way is the traditional multifamily approach: pile units on top of one another. The other approach is to cram them together horizontally. The best example of this can be found in the row house neighborhoods of Eastern cities. Seattle and its suburbs

Renton worked with Northwest Commercial and Mithun Partners to create zoning ordinances that would allow higher density detached housing at the Village on Union, as a transition between single and multi-family areas.

have virtually no row houses -- but they're going to.

The "pile 'em high" approach is best exemplified locally in the condominium market. Condominiums have been popular with buyers who base their choice on lifestyle. Condos require less upkeep than a traditional home, but with the trade-off of less space. Units are typically arranged in stacked flats or row townhouses. Also, most condominiums have been built in urban (or urbanizing) areas close to shopping and work. The typical Eastside condominium is priced between $90,000 and $165,000.

Condominiums are popular, but so far, their appeal has been limited mainly to singles, professionals and retirees. Few families buy them. Instead, they have voted with their feet, showing a willingness to commute long distances in order to live in a new detached home.

A small, but growing number of families are buying older in-city homes, which can offer more interesting architecture and a more stimulating neighborhood setting. The trade-off is fewer bathrooms, tiny kitchens, antiquated wiring, clogged plumbing and, yes, no yard.

The other approach is to crowd houses closer together. This was widespread in central-city neighborhoods of 50-100 years ago, but has only just begun to happen in suburbia.

New housing is being built on smaller and smaller lots. Unheard of in the suburbs until recently, 5,000- to 6,000-square-foot lots are becoming the norm rather than the exception. To add insult to injury, these smaller lots are as expensive as 10,000-square-foot lots were five years ago. Small lots mean smaller houses.

According to Dennis Thorton with John Buchan Homes, something has to be sacrificed to keep housing affordable. The yard is first to go. Second is the size of the house. New housing under $300,000 is evolving into a hybrid between attached and detached, sort of a fusion of condos and single-family homes.

Many of us grew up in small houses with one bath and tiny bedrooms shared by two or three kids. Today, these same houses are occupied by one or two people. Families with children now expect at least two baths, one bedroom for each child, family rooms, rec rooms, great rooms, a three-car garage and so on.

Malden Court on Capitol Hill quietly fits condos into a single family neighborhood.

The builder's dilemma is to provide housing that has the look and feel of a detached single-family home at a condominium price. While some believe this is the marketing equivalent of turning a pig's ear into a silk purse, some innovative design work is being done.

For example, Intracorp, one of the Northwest's largest multi-family builders, will experiment with a new concept in high density housing -- the detached condominium -- at its River Trails townhouse community in Redmond. The next phase of River Trails will have clusters of seven detached condominiums arranged around a courtyard.

Each cluster will have its own entrance and garages will not be visible from the street. Units will vary from 1,600 to 1,800 square feet with expected prices in the low $200,000s. While the units will be larger than what has been offered in previous phases, project manager Liz Soldano expects that the buyer profile will still consist of singles and childless couples.

Another example is the largest high-density project currently being developed on the Eastside, Port Blakely's Grand Ridge master-planned community just outside Issaquah. Grand Ridge will ultimately contain 3,250 dwelling units, split more or less evenly between single- and multi-family housing. Construction has begun on the first division. Grand Ridge has a dense residential plan. A majority of the lots will be smaller than 5,000 square feet and multi-family densities will range from 12 to 40 units per acre.

Port Blakely has designed a community concept that reflects traditional Seattle neighborhoods with narrow streets in a grid pattern, alleys and design standards that call for a variety of facades and roof-lines. Builders will be discouraged from constructing the usual suburban home with a three-car garage dominating the front of the house. The small lot size dictates that many of the single-family homes be duplexes.

Of significant importance is the requirement that 30 percent of the housing at Grand Ridge must fall within King County's three-tier affordable housing guidelines. While the low-income portion will likely be rental, a significant number of homes will be priced between $200,000 and $300,000.

A harbinger of things to come is planned for that bastion of the detached single-family home, the Inglewood Hill area of the Sammamish Plateau.

Weidner Investments plans to build a 110-unit rowhouse project called Highland Parc which is aimed at families. These duplex townhouses will include features popular with families such as family and bonus rooms. Garages will be tucked out sight. Units will have front porches and gabled roofs and will be priced between $150,000 and $200,000, dramatically undercutting single-family houses.

According to Bill Kreager of Mithun Architects, the designers of Highland Parc and other innovative multi-family projects, the future is with high density housing. The big question: will families respond?

Dennis Thorton summed up current housing trends: buyers will pay the same price and get progressively less product. While Buchan is best known for its generously-sized "Bellevue Chateau" homes, Thorton estimates 40 percent to 50 percent of Buchan's product in the next several years will be attached. Much of this higher-density housing will mimic, as much as possible, the traditional detached single-family home.

The hard fact, therefore, is while families currently may not want to consider townhomes or duplex housing, there may be few reasonably priced alternatives available.

Our current strong economy will lead to a large influx of new residents and a significant run-up in home prices. Last year, local economists Dick Conway and Doug Pedersen projected that home prices could rise 30 percent over the next three years because of an imbalance between supply and demand. This projection could be conservative -- during the two most recent booms, home prices doubled.

The Constitution says that we can't stop people from moving here. So we try as best we can to accommodate the influx of newcomers while preserving the quality of life we have come to cherish. This region made a choice during the last economic boom and that choice was to "manage" growth. The Growth Management Act is the legalistic manifestation of that choice. We must live with that choice, which means that we must learn to live with less. Less land. Less house.

In the final analysis, it is the buyer who will determine whether small houses on small lots will be successful. The battle between economics (which favor small, closely packed houses) and buyer expectations (which favor large, widely spaced houses) will be played out in the coming years. If the people of this region are committed to the principle of "managed" growth, then higher density will win out.

Cheryl Lotz is a commercial real estate appraiser with Palmer, Groth & Pietka, Inc. in Seattle. She has been appraising condominiums and high density housing since 1988.