How can we build cheaper urban housing?

Richardson Housing by David Baker Architects

Richardson Housing by David Baker Architects

There were a number of suggestions from readers, via both the blog comments and Twitter, on how we could build cheaper multifamily housing. Here are a few ideas with my thoughts:

  1. Prefabrication – Most large projects already take advantage of this to some degree. Many contractors pre-frame wood walls in a factory and crane them in to place on site, and things like roof trusses are typically factory made as well. These things can improve the project schedule, which saves money. Prefabricating entire units is possible too- Zeta Communities is a local company that is doing exactly that. They build entire rooms in a factory and crane them into place on site. SmartSpace in SoMA took advantage of this system and is being called the “first prefab micro housing project in the US.” Still, this is a system that only works on particular sites. It limits design freedom on difficult sites which can often result in fitting fewer units on a constrained parcel. It is often easier to use these systems on small sites, but I don’t think it’s going to reduce construction cost enough to make a huge difference.
  2. New Construction Technology – Cross Laminated Timber could reduce costs and construction time. Basically, it’s huge sheets of laminated wood that are cut out in a factory and assembled on site. This technology has already been in use in Europe for a few years and is coming to North America via Canadian manufacturers. Check out Murray Grove in London by Waugh Thistleton Architects.
  3. Smaller Units – San Francisco recently legalized a trial period for microunits, which are apartments that are smaller that what was previously allowed in city regulations. My example in the previous post was an 800 square foot apartment, which is an average size, but you could go a lot smaller (I’ve lived in a place that was a LOT smaller than that myself). Cost per square foot goes up as size goes down- it’s a result of having more bathrooms and kitchens in the same building, but it does create cheaper apartments. I personally don’t think there should be a legal minimum size for residences as long as there are no safety issues- if somebody wants to rent it, that’s their decision. For a lot of people, living in a very small apartment alone is preferable to having roommates.
  4. SROs -Martha Bridegam and I had a chat about these on twitter. There used to be a lot of Single Room Occupancy hotels in San Francisco. There still are some in the Mission and in the Tenderloin (with a sprinkling elsewhere) but they are traditionally where single people people at the lower end of the economic spectrum were able to afford to live. They provided a huge source of affordable housing and kept many people off the streets, and the remaining ones still fill this role. Unfortunately, many of these units were removed from the city when they were declared to be blight during the Urban Renewal era. Yerba Buena gardens stands where many low-income people used to live (they were clustered between the old train depot and Market Street in SoMA). UC Berkeley professor Paul Groth wrote a book titled Living Downtown that I recommend reading that discusses the history of this type of housing. Providing incentives for developers to build modern SRO-type housing in San Francisco (yes, even with shared bathrooms) might be a good way to create non-luxury housing that lower income people and young people on limited budgets would be able to afford. These type of buildings, built without parking and near transit, could be a good way to provide more market-rate affordable housing. I know some people object to this type of development, but it is very similar to a roommate situation and could be equally affordable. It also would not put people renting rooms at the whims of the master tenant, which is often a bad situation.
  5. No/Limited Parking – San Francisco already has just about the most progressive planning code in the US when it comes to parking. It already sets parking maximums that are below 1:1 (i.e. one space per unit) as opposed to most cities that have parking minimums. It also now requires unbundled parking so people buying a condo unit can decide whether or not to purchase a space, which can reduce the cost of buying significantly. Parking spaces cost A LOT. Tens of thousands of dollars each to build, and they are doubly expensive if they are built underground because the cost of building a basement in an urban area is astronomical (most new residential buildings in SF do not have basements unless there is an underground garage). Identifying areas to zone for “no parking” might be a good option for creating more affordable housing, although neighborhood groups are very likely to oppose this. Developers often are forced to add additional parking during the planning process to appease neighbors.
  6. Increasing Height Limits to Increase Density - height limits are set for every part of a city. This is in the planning code and is available online in most places (San Francisco has lots of online maps). Even slightly taller buildings would allow for more density – there are parts of the city where a few more feet would mean one extra floor. This would be a good way to create more units without changing neighborhoods drastically. However, land is usually priced based on how many units fit within the zoning. If parcels are upzoned, expect the price to increase as well. Generally, the increased density still outweighs the penalty of the slightly higher land cost.
  7. Find Other Ways to Fund Subsidized Affordable Housing - the current method of funding BMR units per project puts a big cost burden on the selling price of new units, and is a disincentive to building housing when the market is less-than-booming. There are not many other ways to fund development though, so I’m not sure what this would look like- I would love to hear ideas. With the death of the Redevelopment Agencies at the hands of Governor Brown, California is not handing out money for housing.  Prop C, which passed in 2012, created a fund for affordable housing last year but it isn’t funded yet. Currently the affordable housing requirement for new construction is the biggest source of affordable units.

Please leave your thoughts in the comments.

9 thoughts on “How can we build cheaper urban housing?”

  1. All good thoughts. Two more ideas to throw out there:
    1. Special development zones, where the city agrees to simplify or expedite the planning process to encourage housing creation.
    2. Offering low-cost financing directly to builders on condition that they sell units at or below a certain multiple of cost.

  2. thanks for your interesting and productive thinking on this issue. I would suggest some additional approaches, which might be considered radical but I think could play a role in the picture:

    1) intermediate-term building, i.e. temporary.
    2) Mobile or “agile” housing.
    3) Reallocating land from current uses, particularly from vehicle & parking use.

    I have a project I call “houselet” or “Startup House” to prototype mobile microunits that may fit on standard parking units. Park of the motivation is the observation that even in such fiercely regulated and land-use-contentious places as San Francisco, huge areas of public land are basically being given away for private enclosure as parking. As Shoup’s “The High Cost of Free Parking” argues, our cities are in effect structured around parking practices, with resulting remarkable misallocations of space and resources.

    While a long-term rethinking of such land uses is clearly under way, I’m interested in the potential of interventions such as “Startup House” to accelerate new thinking & practices and solve immediate problems like tech-worker housing.

    Among the precedents I’d cite are post-emergency situations, in which large numbers of low-cost units are often created, such as after San Francisco’s 1906 earthquake. I’d suggest the current rapid escapalation in SF housing prices is likewise a large-scale civic crisis — although one of highly disparate impact, e.g. to current residents/landowners vs. to future residents & non-owners. Considered as a crisis or extraordinary situation, it might warrant extraordinary intermediate-term measures.

    I also find it interesting and opportune that major tech employers like Facebook and Google, as well as Stanford, are now highly concerned about housing and traffic-impact issues. So part of the Startup House idea is to propose mobile micro-units as flexible live/work-space units for the high-growth, high-mobility needs of such organizations.

    I am currently researching many precedents and current practices related to this, and considering various avenues by which to pursue it. For example, a “houselet” international design contest sponsored by SF Mayor’s Office of Innovation (winner and me get a space to live on!); a demonstration unit for Google or Facebook or Twitter campuses; and building and living in my own prototype unit, in Palo Alto or SF. More info: “Parking Houses: modular housing to fit on city parking spaces” http://tjm.org/2012/08/30/parking-houses-modular-housing-to-fit-on-city-parking-spaces/ (August 2012).

    thanks for opening the discussion. Onwards & upwards (& smallwards)!
    Tim


    Tim McCormick
    Palo Alto, California
    http://www.tjm.org @tmccormick

  3. Let’s think about how could we get much closer to 100% affordable… ignoring for the moment that this is politically impossible given the political climate in City Hall:

    1) The biggest factor in price is the hard cost per unit, which you estimated at $240k. How much lower could we get by sticking to 4 stories/no parking, removing need for elevators? How much less if we elminate HVAC (rarely needed in SF)?

    2) To ameliorate the $100k+ land cost, how could we get that land into a community land trust?

    3) Regarding neighborhood opposition, I’d guess there would be less if units were 100% affordable, and parking concerns would be less on sites like 16th/Mission w/ great transit.

    4) Most of the other points you make about streamlining the permit process, eliminating the BMR fee if we build 100% affordable, are good things to consider.

    JMC, tweeting for @sfgreenparty

  4. Hi JMC,

    1. You can’t eliminate elevators per the California Building Code. Most of the building would not be accessible to people with disabilities if you did that. You also need to provide heating per the building code, many new buildings (even many high end ones) do not have air conditioning here unless it is part of a ventilation system that is required by code (there are code requirements based on local air quality etc). Many of the hard costs are locked in based on state regulations.

    2. I don’t know- the land is under private ownership for most parcels and the city would have to buy it. If, for example, the City was able to get the 280 freeway removed there might be an opportunity for a land trust in that location. However, the infrastructure fees in locations like that would be huge.

    3. You’re probably right but people object to projects for all sorts of reasons, not just affordability. Views, density, construction noise- you name it, someone will object. Typically, neighbors ask for more parking (not less). This other project in the Mission shows the typical response to not having “enough” parking: http://sf.streetsblog.org/2013/10/23/potrero-hill-nimbys-lead-supes-to-grapple-with-the-minimum-parking-myth/

    I am definitely in favor of less/ no parking too. San Francisco is very progressive on parking policy compared to most places though- we have parking maximums instead of minimums and parking has to be unbundled from units in new housing.

  5. the trouble is the capitalist system,as soon as a labor or material saving system comes along,somebody jacks up the price to make a killing and we are back to square one!

  6. Mark
    Your calculations of cost for producing a 800-s.f. housing unit are revealing (previous blog post), and clearly demonstrate that even at most stripped down expenses and minimum developer and equity-investor IRRs, typical market rate housing in SF simply can’t be made affordable to middle-income residents.
    However, you still then advocate for de-regulation as the primary “solutions” for the structural unaffordability of SF real estate — streamlining the public process for entitlements, eliminating the share of responsibility for affordable housing on developers, upzoning without extracting public benefits. These proposals may be beneficial for market rate developers, but they will do nothing to increase affordable housing or housing affordability.
    The way we produce affordable housing in this high-priced real estate town is through locally funded housing development for low and very-low income residents and through developer requirements to contribute middle-income “inclusionary” housing in their market-rate projects. That’s pretty much it. The irony is that the beautiful picture at the top of this blog post is of Richardson Apartments which is a 100% affordable project by Community Housing Partnership that serves formerly homeless residents. I’m glad you are proud to display such an attractive and successful housing project, but using that image to headline an article arguing for de-regulation and incentives to build more market-rate housing is, at minimum, an odd juxtaposition.
    You are also incorrect in statement that “the affordable housing requirement for new construction is the biggest source of affordable units.” The inclusionary requirement is but a portion of local resources for affordable housing, and moreover and most importantly, the inclusionary requirement on market rate projects is intended to compel developers to build the units on-site as mixed-income housing, it is not at all intended as an in-lieu fee program (unfortunately that is how developers treat it–just another check to write to the City rather than seeing their role in being able to actually produce affordable units for middle income people).
    It is great that you have creative ideas for market rate housing–prefab, construction technology, small units, zero-parking, etc. Architects are the creative thinkers about the built environment and typologies of housing. But it is a different agenda when these interesting ideas masquerade as “solutions” for affordable housing needs. These are simply new ideas for market rate housing, and market rate housing is very expensive both to build (as you have demonstrated) and to buy/rent. It is unfortunate that you see the need to challenge and undermine current public policy in laying out your ideas for how market rate developers can build cheaper urban housing.
    Regards,
    Peter

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