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Everyone has an eye on the housing crisis, and an opinion to go with it.  At this moment there doesn’t appear to be any “magic bullet” solution to the problem, even though many are being proposed, including legislative initiatives imagined to streamline the approval process and open more existing properties to redevelopment with multifamily communities.  We’ve also been casting a watchful eye toward California cities as they update their Housing Elements to demonstrate how they will accommodate their Regional Housing Needs Assessment—the number of homes they are expected to produce over the next eight years.  Many of these efforts include overlay zones that make it easier to develop housing and mixed-use projects on underperforming retail sites, for example.  The keyword here is “easier.”

There are many fine non-profit developers who are producing housing for families at the lowest reaches of the income spectrum, using subsidies or tax credits to offset the cost of constructing the buildings so that the rents needed to cover operating expenses can be significantly below market.  These developers are doing wonderful work that is absolutely essential as a part of the overall housing food chain; however, it is really only addressing a small part.  There are a vast number of somewhat higher-wage earners who don’t qualify for subsidized housing, yet are greatly stressed by skyrocketing rents.  This “middle” market, which is bottomless, has been largely overlooked in recent construction cycles.  The number of units required to trim the housing deficit is at a scale that can only be satisfied with a market driven solution.

There is a change afoot.  A number of for-profit developers have begun to embrace a starkly different model for producing apartments that can hit the market at rents noticeably below prevailing, and future residents have been lining up around the block to lease them.  This is an excellent emerging trend, on which we would do well to double down.

To be successful in this endeavor, there are some key fundamentals to embrace.  Below are seven ideas to help boost the viability of these “market driven attainable solutions,” ranging from entry-level to brazen; some might even be considered outrageous.

1.  You may not need your father’s Oldsmobile:  the beginning of controversy here is to soberly assess that not all housing can or should be the same.  Different life stages and income levels require different solutions—sometimes radically different.  Consider personal transportation:  not everyone drives the same quality car, and no one would expect everyone to.  Some budgets can support a ten year old pre-owned sedan, others a modest economy car, and so on up the line to the stratospheric hypercars.  The same paradigm applies to housing, and right now a lot more used cars and econoboxes are needed than luxury image rides.  I’ve heard it said that no one is delivering “Class B” product because it doesn’t “pencil.”  Well, it certainly won’t if it is conceived with Class A appointments.  In other words, if someone needs to pay less, the way to get there is to give them less—like a simple, modest dwelling without many bells and whistles—the Spirit Airlines model of housing.  Maybe someone doesn’t really value solid surface counters, high end appliances, even in-unit laundry if it nudges the rent up beyond a comfort threshold.  If it costs less to build, it costs less to rent. 
2. Go where you’re wanted:  swimming upstream is expensive and time consuming.  It has already been suggested that easier agency approval processes can reduce the predevelopment time required for a project and get shovels in the ground faster, which is a project cost savings.  There’s a reason why communities in “high barriers to entry” markets are among the most expensive living options.  We need those projects, too, but they’re not going to work for vast numbers of people.  So, it is a reasonable suggestion to search for the municipalities which actually welcome multifamily communities that can accommodate more of their citizens at all income levels, and therefore simplify the approvals process for them, or even make them “by right” in certain radical cases.  Less red tape means less rent, pure and simple.  As a famous wise teacher once said, “It is hard to kick against the goads.”  So don’t.
3. Flaut convention:  try something different!  Two alternate dwelling paradigms have been gaining steam lately, and they’re really not new at all:  micro-units and co-living.  Tiny units are an attraction to people just starting out, usually single, who spend most of their non-working hours away from the place where they sleep and keep their clothes.  Micro-units nicely solve the fundamental issue of needing somewhere to crash at night, but at a price point that suits the wallet, allowing for enough “discretionary funds” to fuel one’s active social life.  Co-living is a modern renaissance of the ancient paradigm of the boarding house—one rents a room and shares the common social spaces with a handful of roommates.  It is just a tiny step up from dorm living but brings with it automatic access to camaraderie.  Many co-living communities have a themed focus, to appeal to a swath of residents in the same industry, or with common shared hobbies, for example.  And yes, renting a room is less than renting even a micro-unit in most cases.  Remember the car analogy from above; this is the used car element.
4. Don’t build bedrooms for cars:  structured parking of any form is extremely expensive.  Surface parking is an egregious waste of real estate.  Therefore, in addition to looking for municipalities who will approve a proposed project in a hurry, be on the outlook for transit-rich communities.  Owning a car is a unattainable luxury for many people, and they will choose to live in well-served places where they can enjoy the bump to their lifestyle they reap as a result of not paying $750 or more per month for a private vehicle.  Communities can invest in a few project-branded ride share vehicles residents can subscribe to; ride share apps are available for longer trips when absolutely required.  Clearly this is not for everyone, but it can be very meaningful for a large number of people.  And by not devoting precious site or expensive building area to car storage, the rent can be lower.
5. Let the neighborhood be the amenity:  not every residential community needs to be a luxurious resort.  Particularly in denser and more colorful urban/surban settings, the immediate vicinity of a community affords endless opportunities for recreation, services, and even exercise.  When your dwelling space is smaller, it follows that you just want to spend more of your leisure time outside of it.  Perhaps in a given community it is more about bike and walking trails than bars and shopping, but maybe it’s both.  Lavish amenities are sexy on the prospective tenant tour, but they also accumulate to the rent bottom line.
6. Give a hand up to the little guy:  the previous few points focused on generally larger, often more urban communities.  There’s also a wonderful opportunity for the production of attainable dwelling units on existing single and two-family lots.  Several states, including California, Minnesota, and Illinois, as well as many individual municipalities, have approved ordinances allowing Accessory Dwelling Units (ADUs) on existing properties leading to gently fuller neighborhoods.  Because their size is typically limited, they may or may not have parking, and they certainly aren’t amenitized, their rents are typically lower.  Plus, these properties can be developed by mom-and-pop scale owners in neighborhoods all over, and legally.  (I lived for a while in Santa Barbara, where the proliferation of illegal dwelling units were a bane to city government, but also notoriously difficult to enforce.)  A logical step up from the allowance of ADUs on existing sites is to just allow more units, period, on single family lots.  The Los Angeles Mayor’s office recently staged a design competition to harvest ideas for this type of slightly denser housing, which may actually lead to policy change that could help bring it about. The paradigms sought as solutions in the competition brief are not currently legal in California – how’s that for irony?
7. Allow on-site advertising:  told you this was going to get controversial.  We underwrite everything in this country through corporate sponsorships and advertising:  why should this principal not apply to housing?  There’s a property in downtown Los Angeles that boasts what I believe is the largest digital motion LED advertising wall in the Western U. S.   The revenue from this giant billboard, which also contributes, Times Square style, to the vibrancy of its neighborhood, helps the project to pencil.  There are examples of this all over the world, from Hollywood to Istanbul.  If there’s a billboard or fascia sign on my residential building, is that the worst thing in the world?  If the resident’s option is to allow the advertising or pay another $100 in rent, the choice is a no-brainer.

Creative, equitable thinking is what’s called for now.  Understanding there are many factors not considered in this argument but it is a start.  More and more developers are awakening to the appeal of producing new housing communities that accommodate, comfortably, scores of people who have been overlooked for a long time by the development community.  The zeitgeist of the current housing predicament demands that we, as an industry, “Hospice the Old Paradigm, and Midwife the New.”  Let’s house America.

                                                                        

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Developers everywhere today are searching for ways to lower construction costs for multifamily projects – not just to make them attainable for folks with lower incomes, most often it’s to make projects even pencil out.  Many have looked to off-site fabrication solutions, including volumetric modular and panelization in hopes of saving money, but in too many cases, that promise hasn’t been delivered upon.  What are the key things to consider in advance when contemplating a modular or prefabricated option?

First, it is necessary to dispel the myth that if your stick-designed project isn’t penciling, shifting to a modular solution will fix it.  That is absolutely not the case.  Whereas it is plausible to pull the plug on a modular design that isn’t achieving any one of many project objectives and revert to a stick frame with manageable amounts of pain, the reverse situation—ditching a conventional design in favor of modular, will be a disaster, because in virtually every case, all that was drawn in anticipation of a conventional solution will need to be jettisoned and re-conceived.

That said, there are situations in which modular may really be a preferred solution.  For example, if you manage to design a modular building you really like and construct it over and over again it gets better, faster, and hence more cost-efficient with every iteration.  In other words, to reap the benefits of an essentially mass-produced product, it is the best case to produce it in large numbers.  This is the reason you see so much current modular product going into low rise hotel properties where reliable repetition reigns supreme, and everything is done “by the book.”

I offer a fundamental encouragement to anyone considering a modular project:  conceive of it as modular or prefabricated from the very word “go.”  It helps to have a passionate advocate on the team.  Next, it is essential to be as informed as possible about what modular design “likes” in order to play to the strengths of the strategy.  In a word: discipline.  Successful modular undertakings have extraordinarily disciplined team members—principally with the developer, but extending throughout the design team, including the construction and marketing people!  Finally, it is important to get to know the presumed fabricator as early in the process as is humanly possible, because there are design and production nuances that vary from one shop to another, as well as which member of which team draws what in the construction documents.

Simplicity and repetition are the golden values in keeping a modular design on the straight and narrow.  Factory fabrication is necessarily a repetitive process—assembly lines thrive on continuing to crank out the same widget over and over again without interruption.  Think about the Model T—Ford’s strategy for mass production is what put that rather prosaic vehicle into the driveways of so many Americans.  What this means is the project design must be approached with the goal of having the absolute bare minimum number of unit types.  It may not be immediately apparent with this mindset that apartment plans are not mirrored in building plate layouts, but rather rotated.  Why?  Because that eliminates the need to prepare an entirely new set of jigs for a run of boxes with the guts flipped.  This simple rule of thumb for design planning is one of a myriad of guidelines, which, if rigorously held to without wavering will produce the optimum results.  With wood modular construction, I like to say the best strategy is to design for the minimum number of maximum sized boxes, which also get the most bang for the buck on the shipping expenses.  Steel modular is a bit different but the same simplicity rules govern.

From an aesthetic perspective, I like to say that modular buildings like to be “straight, flat, and rational,” meaning they won’t necessarily play nice with fussy forms or gratuitous façade manipulations.  In the language of Robert Venturi, these projects definitely want to be a “decorated shed” rather than a “Long Island Duck.”  This doesn’t mean ugly; simple geometric forms articulated with color and strategically placed “building jewelry” like eyebrows and awnings can provide a satisfying look while adhering to the rules.  Naturally, this may not fly in every jurisdiction or with every taste maker, but clean, modern lines are growing in popularity everywhere.

What does it take to be able to design within the parameters that enhance the chances of a competitive modular project?  I’ll say it again: discipline.  The team must be prepared to respond to questions that begin with “Wouldn’t it be nice if . . .” with firm resolve to the mission because they will almost always lead to bespoke solutions that frustrate the original intention of simplicity.  One or two little customizations along the way can usually be incorporated, but by about the time of the third one, I alert the team it’s time to pull the plug.  Also, production lines hate changes, so a firm resolve in decision making long before fabrication begins is vitally important; stopping a production line to make a change will squander the entire advantage of the process.

There’s a place for modular construction to really stand up as the preferred approach.  At this time when we need so much attainable housing to dig us out of a massive deficit, it is perfectly reasonable to contemplate a prefabricated solution, especially if you can settle on a desirable design that will be attractive in multiple markets where you can build it over and over again.  Culturally, markets with high barriers to entry, especially core coastal markets where land and labor costs are extraordinarily high may be the golden ticket for modular to deliver on the promise, helping to control expenses and shave time off the project delivery schedule.

Now here’s the kicker to this discussion.  Even where the basic economics and constraints might not support an off-site fabricated project, there are many fundamental attitudes and approaches in the modular and pre-fabrication world that can be appropriated for stick building, resulting in more efficient, less expensive products.  Simplicity, repetition, and an aversion to fussiness will always result in lower construction costs.  And who doesn’t want that?

                                                                        

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*Original article was written by Daniel Gehman, AIA, LEED AP and published in Builder and Developer.

It’s serendipity when disparate trends overlap in harmony.  Like the way social distancing and emphasis on small groups combine to suit Generation Z (“Zoomers”— considered those born in 1997 or after), who are coming of age in a strange season. Observe any clutch of early-twenty-somethings and you’ll assess they don’t so much as form households but posses — groups of friends assembled around common interests. While many of this demographic are still living with mom and dad, most will eventually leave the nest for a multifamily community, where they will remain until they partner up, reproduce, and move to the suburbs.

Yet whether at the ‘rents or in a community, their pack behavior characterizes them. While GenZ posses may debate “whose place to meet at tonight,” they will more likely find a third place — neither dwelling nor work site — to hang out. Prior to the pandemic, these locations were public — the gym, the bar, or the coffee shop. With stay at home, the third place needs to be more semi-private. In the multifamily world, whether urban or suburban, this influences the design of common areas.

One strategy to address this behavior is to dis-aggregate shared spaces so that rather than accommodate the multitudes, each can cater to modest-sized groups, with more and varied pockets of space, both indoors and outdoors — call them “posse pods.” If the gathering place straddles the boundary between inside and out, even better — today it’s still preferable to meet in fresh air. An operable wall or sectional glass garage door, plus furniture and equipment that can easily spill outside not only looks cool but is highly functional.

Boundaries between these spaces do not have to be stout physical barriers, as long as adequate social distancing is kept in mind. This applies equally to interior and exterior spaces; interior spaces can be separated by tall planters or decorative non-perforated screens. Within the spaces themselves, user-configurable elements (like furniture and operable walls) are a bonus.

Flexibility is key to the success of these pods — based on the habits of the residents.  For Generation Z, getting together may not always be purely about socializing — they may include intermittent working on the laptop/phone. Let’s call that “work-reation,” or moving seamlessly from work to play, mixing in enough personal interface to maintain a quality life balance. If they’re working remotely anyway, workspace is wherever they happen to be (provided there’s screaming fast wifi.)  To support that, they will also occasionally want spaces that support work functions in a more structured manner, such as a formal conference room (“Zoom room”).

Multiple pods in reasonable proximity allow random encounters among residents like the chance meetings that take place in a co-working environment. Social networking and professional networking become indistinguishable, and both pursuits are enhanced as a result.

While this strategy of space planning plays to the preferences of the Zoomers and supports their habits, it also encourages physical distancing and the avoidance of large groups of people, particularly indoors. Plus, to have a greater assortment of more varied chill areas will be appealing to a Generation Z when taking a virtual tour of the property.

When we emerge from the current dilemma, how much of this will still be applicable?  Popular trends discussed here are not likely to fall out of favor, even when the big group activities and tighter physical distancing are cool again; they’re just a good way to live.  Eventually there will be another generation yet to take the place of the Zoomers, but by then, it’ll be time to refresh our properties anyway.

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Like what we drive, where and how we live reflects our lifestyles and stages. The needs of each stage differ and require varied physical accommodations that are life stage appropriate. Individuals and households are in constant motion, moving from one stage to the next; some steps just last longer than others. This “circle of life” repeats itself with every successive generation such as Gens X, Y, and Z. About every 14-18 years the cycle begins again. Because cycles overlap, we always have all stages to comprehend and design for simultaneously.

Starting out with limited means, it may make perfect sense to dwell in a micro unit in an urban core, close to transit and the attractions that make this life stage so much fun. One might choose a suite in a themed urban co-living building, which in addition to its affordable rent, comes with built-in community. From here, life often leads one into a special relationship that progresses to a partnership, which forms a new household, often followed by offspring, which represent yet another kind of family unit. Ultimately the offspring leaves the nest, which one might hope, resulting in a new life stage which resembles a previous one, but with more resources! Many folks arrive at this mature stage, and, romancing the memories of a previous cosmopolitan life, downsize back to an urban loft. And so, the cycle repeats.

The nuances of how to appeal to each life stage adjust with changing times, and the evolution is subtle. To stay abreast of the morphing norms is the task of the residential designer, as augmented by marketing research and by paying critical attention to the broader culture. Designing in all housing genres simultaneously creates an imperative to not only stay abreast of the needs of the various life stages, but also to encourage cross pollination from one type to another, understanding the specific product distinctions.

Approximately 65% of Americans occupy single family houses; there are a billion variants of these homes, including size, appointments, and proximity to neighbors and a town center. A detached home is prized for its desirable qualities—it gets light from all sides, usually includes some kind of yard or other private outdoor open space and has a distinct sense of autonomy. As resources are more abundant, these properties become larger and farther apart. Projects on the high end of this spectrum stretch the design team to embrace the perks that luxury affords—which means spending a lot of time in possibility thinking, the inventions of which can be re-interpreted and applied to all types.

Recently we have seen the advent of smaller, more closely spaced single family homes, which appeal to first time buyers, especially when money is cheap and there’s a pandemic to escape. The production pace of this type of dwelling was blistering in 2020 and has accommodated many younger families searching for the sublime combination of ownership along with a yard for the puppy and kids. Forecasters are predicting the boom will continue at least through 2021. These houses, particularly if they are only two stories, are about the least expensive construction there is. Design thinking in this context is a vastly different enterprise than with luxury product—in these smaller, more value priced homes, everything must be considered with a great sensitivity to the bottom line, so simplicity and efficiency become very key drivers.

With the advent of Accessible Dwelling unit laws in California and other states, experimentation and invention in the single family space has really accelerated. Introducing a “granny flat” into a new build detached house doubles the density of the neighborhood, provides attainable housing opportunities, and creates a mini “circle of life” situation where the residents of the primary house and the ADU (assuming all are extended family members) may swap spaces over a long period of time. These new ground-up homes with built-in ADUs are a gateway to multifamily housing.

Multifamily communities, especially 2- and 3-story wood-framed walkup apartments, have been hot in the suburbs and exurbs, because they are the most affordable homes to construct, and the value of the underlying land is typically less. The fire has been fueled by the recent exodus from dense urban cores. As is the case with single family homes, there is a broad range of product types in this category, driven by the desires of target residents. Some people live in these properties for a very long time; others are merely passing through on their way to ownership of a single family home!

Because the amenities in a low-rise multifamily community are shared, great care must be taken by the design team to incorporate elements that specifically appeal to the anticipated residents. With the recent surge of working from home, and the ability to have an abundance of goods and services delivered directly to our dwelling, the traditional community clubhouse needed to be reconsidered. Today’s “resident services hub” reflects the “live/work/play” lifestyle of its residents by having at its core the spaces and services that support working from home—like an alternate place to work when one needs a break from her apartment or to gather with other WFH colleagues, and a place to enjoy with friends all the stuff that’s being delivered. Think about food and beverage trucks or traveling entertainment, all which would satisfy one’s needs.

The big dogs in multifamily properties are those with structured parking: “wraps,” podiums, and high rises. While these communities accommodate a much higher number of persons per net land area, they are the most expensive type to build and are typically located in proximity to an urban core, making the land base more expensive. As a result, they tend toward “luxury” product and command higher rents or sales prices in the event of condominiums. These communities are vertical in nature, with residents living much closer to one another, so random encounters and shared experiences become a desirable aspect of life, as do the thoughtfully planned common spaces in the building, which are evolving in the same way as the suburban “clubhouses”. Relationship of the property to its cultural context is also critically important because many residents spend more time outside their flats than in them, as they take full advantage of the perks their neighborhood offers. Because the cost of these projects is so high, efficiency in plan and skin is a perpetual driver of the design team’s solutions.

So many different conditions, yet with so many elements in common—all influencing one another! The driving intention for all residential design is to create as much comfort and value as possible for a resident relative to what she can afford. Designing tight spaces, such as the micro unit previously mentioned, refines the team’s ability to make the most strategic use of every available square inch of area, wasting nothing, which becomes a strategy applicable to the entire spectrum of homes. Imagining day to day experiences in the dense urban core is quite different than anticipating open space, trails, and rambling amenities in a suburban walk-up location or single family neighborhood, together with the shared spaces, both interior and exterior, that provide seamless transitions from one to the other. What is learned from one experience always helps lead and refine the others.

Today we find ourselves in the situation where the demand for housing has outpaced production for such an extended period of time, making the resultant deficit of homes feel nearly insurmountable. In this environment, it is simply necessary to have more housing, of all types, everywhere it can reasonably go. There is no one product that will on its own make a dent in the deficit; we need more of everything, and an industry energized to imaginatively and intentionally design and deliver it.

Danielian Associates has more than 50 years of residential experience, both domestic and international, that has covered the entire range of residential types from single family detached to high rise, plus the common spaces that support them. In all those years, and in all those products, we have learned the basics of the types, but even more importantly, to listen to our clients and understand which approaches work best for the project in mind.