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All Revved Up With Tiny Ideas
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*Above photo of Cottages at Vaughan, not a Danielian Associates project, is used by permission.  This article was written by Daniel P. Gehman based on his experience at the 2022 ULI Fall Meeting “New Housing Paradigm” Forum

I can’t recall a time when a ULI program simultaneously got my heart pumping and moved me emotionally to tears, but that’s exactly what happened during the New Housing Paradigms Forum on Tuesday afternoon at the ULI Fall Conference in Dallas. What an amazing group of passionate, purposeful, and deeply community-focused providers of unique forms of housing. I came away deeply inspired, pumped up, and eagerly seeking to become a part of this think tank with ULI.

While the general array of projects was targeted at the most entry-level end of the housing spectrum, the program included market-driven communities as well. A series of presenters ranged from providers of pre-fabricated kit-type “emergency” shelters and conventionally built for-sale tiny homes to non-subsidized “electively affordable” traditional walkup apartments. From a tiny home transitional housing community on a challenging site in Los Angeles (arguably the unsheltered capital of the country) to a minuscule petite home community in Atlanta, it was crazy satisfying to see projects brought to reality that can inform and inspire many followers who can collectively alter the dominant paradigm.

All the speakers had great content and wonderful ideas, but it was Pastor Wayne Walker of OurCalling in Dallas that held me riveted as he walked (charged?) through his proposed large village providing permanent housing plus all the desperately required services to care for the least of the least—our formerly unsheltered neighbors who are ill, feeble, aged, and mobility impaired. Wayne talks the talk like a street fighter and has definitely walked the walk—he was able to graphically and persuasively illustrate what unsheltered life is really like for those other than the “hip homeless,” and his group was willing to stand in the gap for them. It was amazing. When he finished his presentation, I wanted to stand up and shout “Amen!” and I now kind of regret I didn’t.

Before I could settle down much, Will Johnston from MicroLife Institute launched into his presentation. With passion and conviction to rival Wayne’s, Will took us on a journey through the development of a tiny home-for-sale community in Atlanta, where he has produced a handful of adorable five hundred-square-foot dwellings in a bungalow court arrangement. There were no subsidies at all in his project, and he provided below-market ownership opportunities for people inclined to pursue a simplified lifestyle in order to own some property that could help build wealth over time. It was so all engaging when Will concluded, I was so exhausted by this point in the day I practically needed a nap!

Following this series of awesome presentations, all participants engaged in a group “information harvest” of ideas related to specific questions, the focus of which emerged as:

“How can we carry this message to our own communities and really begin to move the needle in terms of what can be done? How can we impact our agencies and drive real reform of discriminatory regulations?”

The New Housing Paradigms Forum was a great afternoon of conversation, with voices from across the country weighing in. Collectively, we were all thinking (and saying) “We need a lot more of this.” Shoutouts to Amy King from Pallet, Dan Bodner from Quickhaven, Madeline Reedy from City Square, and Beth Silverman and Philip Payne from Lotus Campaign—all great people doing great work. Also, many thanks to the Forum Leadership: Tom Hester, Charly Ligety, and Dennis Steigerwalt. I’m already thinking about and looking forward to the ULI Spring Meeting in Toronto, and gathering again with this extraordinary group of people, and keeping the heat on these critical issues.

Noble Pursuits: Attainable Housing Without Subsidy
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*Original article was written by Daniel Gehman, AIA, LEED AP and published in Green Home Builder Magazine.

Production of dwellings whose rent or mortgage can be managed by individuals earning modest incomes is hardly a new idea, but in this present moment it has attained a new urgency. To fulfill this noble pursuit, it may sometimes be beneficial to get back to the basics and remind ourselves of what it takes to make it work.

A little over forty years ago, Danielian Associates ’ founder and chairman Arthur Danielian, who is himself a legend in the housing universe as well as an indefatigable mover and shaker, was a BIA board member on the Housing Committee. Relentlessly housing-oriented and mission-driven, he took it upon himself to lead a demonstration project which could deliver modest yet dignified homes to folks with moderate incomes who were otherwise shut out of the marketplace.

He did this by assembling a team of like-minded providers in design, engineering, and construction who worked together to analyze what unseen building costs could be practically avoided, and what living features were essential for dignity and comfort within the price point, and then pursue that with unflappable rigor. What resulted from this at-the-time heroic effort was the Benchmark Villas project in El Toro, California which provided dwelling opportunities for 124 families, which due to the extraordinary team effort, was delivered for significantly less than prevailing construction costs.

It is said, of course, that history repeats itself. Here we are today with unprecedented demand for both “Big ‘A’ Affordable” (subsidized) and “little ‘a’ attainable” (market driven) housing. Everyone seems to be talking about it, and, thankfully, some socially minded entrepreneurs are succeeding in doing something about it.

Here’s a big secret: the recipe for how to do it hasn’t much changed over four decades; the context in which it is being attempted has become considerably more challenging, due to continued stiffening of government fees and approval processes, the huge increase in land prices, plus an unprecedented explosion in the cost of materials due to pandemic-driven supply chain issues. If there’s a secret sauce to get these homes out of the ground, it is surely a combination of intention and discipline, along with a little touch of perspective shift and expectations management.

What does it take to squeeze costs out of new residential construction? There are many elements that comprise the answer, but they generally tend to operate under the guise of three guiding principles: to the greatest extent possible, everything should be simple, modest, and repetitive. For starters, the accommodations are more diminutive in size than “regular” market rate dwellings. As one developer describes their attainable brand, the community gives each resident “everything you need, and nothing you don’t.” This also typically means that project amenities are scaled back accordingly; there’s no room for an “arms race” here.

Next, the number of options within the design needs to be minimal—say limiting the number of both unit and building types to fewer than can be counted on one hand. Finally, the architectural shaping and skin of the buildings requires a tremendous amount of restraint to avoid the maximum number of cost-accretive elements. Naturally, this makes the architect’s task more challenging, but it is entirely possible to craft handsome if modest form and finish solutions that avoid the expensive bells and whistles associated with higher end dwellings. Think of it as the “little black dress” of architectural expressions. The real curb appeal (which can be assessed by the hordes of future residents in line to lease when the community opens) lies in the relatively lower rents or sales prices.

Repetition becomes a tremendous value not only in the simplification of the building designs, but in an overall development approach that begins to resemble a manufacturing paradigm. Once the formula for the community (units, buildings, construction details) are worked out, they can be locked in and ideally used over and over, so the production of new housing becomes its own assembly line.

The trick then is to scout for development sites which are about the right size and proportion to graciously accommodate the prototypical structures that have been developed, and even beta-tested through the first few actual construction processes. Once the delivery system is truly well-oiled, it should ideally lead to even greater efficiencies in the overall production of this much-needed housing.

It will be necessary along the way for the team to repeatedly explain itself to local jurisdictions, Design Review Committees, lenders, and communities resistant to change; robust outreach and advocacy for these projects becomes an essential component of the overall delivery strategy. It’s times like these when we really need the indomitable spirit of an Art Danielian, to keep us energized and attentive to the noble pursuit.

Bracing for SB9: What Will it Mean for Me?
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*Original article was written by Daniel Gehman, AIA, LEED AP and published in Builder and Developer Magazine.

One must hand it to the California State Legislature for its earnest attempts to pass laws that create exciting new opportunities for the production of housing, by right, within existing developed areas.  In 2016 the State passed a law to facilitate the production of Accessory Dwelling Units (ADUs) and went back for seconds in 2017 to enact additional legislation that removed significant inherent roadblocks that had stifled the hoped-for results of the original bill.  Following those amendments, the application of the law finally caught on.  In 2018 about 7,500 ADUs were completed in Los Angeles and in 2019, the number doubled to nearly 15,000.  This data confirms that it takes a while for the new legislation to filter down to the people who actually design, finance, and construct these dwellings, but once it has been figured out, the numbers climb dramatically.

SB 9 can be regarded as a follow-on to the ADU laws as a tool intended to produce more housing units, including ownership opportunities, for California’s desperately undersupplied communities.  Note that the new legislation does not go into effect until January 1, 2022. A caveat to comprehending this bill is that it will take a while for it to be understood broadly enough so that folks spring into action to take advantage of it.  It may end up being necessary for the state to enact even more legislation once again to remove the hurdles and roadblocks inherent in the law as currently written that stymy the production of the desired new units.

What will it allow today? 

I recently spoke at a meeting that was advertised with the headline “are you going to have a fourplex next to you?” To cut to the chase, the answer is unequivocally “No.”  This is at least in part true because the semantics of that headline are inaccurate.  A “fourplex,” by definition, is four conjoined units.  SB 9 doesn’t allow that.  It does allow up to four dwellings on a property that started as a single-family lot, but it must go through a couple of steps to get to the quad of units. Namely, it must be subdivided into two parcels, each one of which may be developed with a duplex and perhaps an ADU, if space allows.  This “lot split” is allowed under the law with only a “ministerial” approval, which means no public hearings.  This combination of lot split plus new construction is the only pathway to the production of four dwelling units on an existing single-family lot.

Will your neighbor’s property qualify for redevelopment of this nature? 

It depends.  The adjacent lot needs to be a minimum of 2,400 square feet for the lot split to even be undertaken. While it may be hypothetically possible to split it, it is not practical given the circulation and parking constraints of a site this size.  Also, the economics at this scale will likely not make sense. There is a certain parcel size required to make the lot split and resulting units viable, and it is much larger than the minimum the law allows.

Any existing single-family parcel with one residence could be remodeled (within certain proscriptions of the law) to add a second attached but fully autonomous dwelling of at least 800 square feet.  Because the lot hasn’t been split, either a Detached Accessory Dwelling Unit (DADU) or an attached Junior Accessory Dwelling Unit (JADU) could accompany this newly generated duplex, leading to a total of three residences on the property.  So, in response to the question posed by the headline quoted above, the answer is “No, but you could end up with as many as three units next door, or six if the lot is split.”

In addition to the practical limitations of lot size, SB 9 includes a menu of limitations that could prevent your neighbor from doing this.  If their home is in a coastal zone, high fire hazard area, historic district, or on farmland or other sensitive habitat, forget about using the law because it is forbidden.  Furthermore, their property needs to be located in a Census Bureau “urbanized area” zone.  That combination of factors removes about nineteen percent of California’s 7.5 million single family lots from eligibility.  Of those that remain, a multitude of factors influence whether the redevelopment of an existing single-family home to produce the additional units is financially feasible, and where there is not demonstrable financial feasibility, there is no investment.

Naturally there are questions and tensions that arise when single family residents are made aware of the provisions of the law, and the concerns are easy to comprehend.  There’s even a movement afoot to qualify a ballot measure that would essentially override SB 9 by returning land use decisions to the local level exclusively through a Constitutional Amendment.  Battle lines are being drawn for a skirmish over property rights across the state.  As we all wait for the beta applications of the law, watching the evolving controversy will be exciting, and we will continue to learn from and respond to it.

 

Affordable Housing Takeaways From Bisnow’s BMAC Event
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Big “A” or Little “A”?*

*”Big A Affordable” refers to projects that receive some form of subsidy. “Little a affordable” (or attainable) means a project that is entirely privately funded, but still delivers rents that work for moderate income earners.

It was truly an inspiration for me to moderate the Affordable Housing panel at Bisnow’s annual BMAC West event in Los Angeles on November 2. Three of the four panelists were developers and the fourth a banker. Why put a banker on an affordable housing panel? Anybody operating in this space knows how painfully complicated it can be to assemble the “capital stack” necessary to put the “affordable” into affordable housing, and it requires a financial partner with equal conviction. While we spent time lightly discussing the finance side of things, the panel got really compelling when the speakers stepped into the potentially emotionally charged arena of social impact investing and community building.

All of these individuals are extremely passionate about what they do, which is really a prerequisite mindset for either preserving or producing these communities that provide critical shelter for our neighbors who are less financially blessed. Some of the most powerful statements of the day came when I asked the speakers to share the counter-narratives they have crafted in response to the hostile negative feedback that springs from opposing voices in their public hearings, which often is built around some variant of “we don’t want those people living in our neighborhood,” because the affordable projects become “low-income slums,” (which is an actual quote from an anti-SB 9 flyer.) Answers to the question all involved explanations of the importance of social connection in creating relationships with other neighbors, and how this leads to a kind of “pride of place,” in which residents strive to take care of the property—both its people and its buildings.

This mutually caring behavior is reinforced by the developers through the provision of a host of supportive services for residents, such as after-school programs for children of two-working-parent families who might otherwise end up “latchkey kids.” In every answer, there was a strong case made for investing in the residents, to give them a “step up,” which is really investing in the greater community at the end of the day and ultimately, investing in ourselves. These attitudes and policies are reflective of a significant driving motivation built on an ethos of caring.

When we discuss subsidized (“Big A Affordable”) housing, it is important to understand that residents at many income levels, from extremely low to moderate, are eligible to live in these communities. These are our neighbors who teach our children, care for us at the local Urgent Care, fix our cars, defend us from criminals, put out fires, and serve us meals at our favorite restaurants. We want these people in our neighborhoods, and we’re not going to have them if we don’t produce dwellings that only require a manageable portion of their income to afford every month without going into “severe housing stress.” Don’t miss that when these residents are able to spend less on rent, they have more resources to buy food, clothing, and other necessities, which contributes to the overall economic health of the larger community.

My absolute favorite moment of the day came when panelist Michael Costa answered the question of why he does what he does and was moved nearly to tears in the process. “When I see the look on a young mom’s face when we turn over the keys to a place where she and her children can live in safety and security, and see the gratitude, it hits me right here,” he said, thumping his hand on his chest. It was a magic moment. I am super thankful for Mike, and also for Daryl Carter, Malcom Johnson, and Matt Haas for doing what they do to make the world a better place, one community at a time.

Outrageous Ideas for Market Driven Attainable Housing
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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.

                                                                        
Grey Is The New Green In Mixed-Use Infill
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Throughout California, and probably most of the country, underperforming regional malls and shopping centers are being surveyed for their redevelopment potential, particularly as they deteriorate into a distressed status. The critical element that makes these projects similar is that they take advantage of the real estate available on expansive existing fields of surface parking. This one aspect is the key ingredient in finding an existing retail/commercial center that will be a good candidate for redevelopment. As these “greyfields,” as they are often known, function like open land from a planning perspective, they are what makes the opportunities so attractive.

Redeveloping an aging or dying mall or shopping center is hardly a fresh idea, but it remains a good one. Today there are a number of significant such projects in the development pipeline, including Main Place Mall in Santa Ana, California, where a very ambitious program of hotels, offices, apartments, and other uses is proposed, or the former Laguna Hills Mall, also in California, where a similar blend of ingredients is anticipated. Placing denser housing on these properties makes complete sense because many of them are already near better performing commercial centers, and the resulting “village” should be able to provide some of the benefits of a traditional town center if it includes sufficient resident serving amenities, such as bars and restaurants, among other services. Constructing new housing on underused surface parking is just a good idea, almost no matter how you slice it.

The mall redevelopment projects cited here, in addition to many others, are substantial undertakings, but they’re not the only opportunities. There are many smaller retail centers on properties that are equally attractive due to their proximity to other shopping, jobs, and resident services that might be in easy walking distance or have convenient access to transit; not every redevelopment needs to focus on a seventy-acre regional mall in order to help whittle away at the seemingly intractable undersupply of housing. These locations have access to existing infrastructure and services, so arrive at the starting line with more going for them than a traditional green field. What is the obstacle to the widespread implementation of this strategy?

Perhaps the biggest problem with the wide-scale redevelopment of retail/commercial properties is what used to be known as the “fiscalization of land use.” That’s a fancy way to say it’s politically hard to change a use on a site from one which produces a generous income stream for the municipality to one that doesn’t—such as changing from a retail center, or worse yet, an outdated auto dealership, to multifamily housing, which generates far fewer dollars for the City coffers. This underlying dilemma is a consistent fly in the ointment of proposed commercial-to-residential or mixed-use redevelopments. Main Place, because of its sheer mass, was probably able to navigate that income stream quandary by including a ton of commercial space and hotel rooms, both of which generate cash flow. A cooperative approach is suggested here—that the developer and the City meet extremely early in the process to discuss the mix of uses that would not only provide the desired housing, but also include ingredients that could continue to generate tax and fee income, and hence make the project approvable.

Do we need new laws to help make the process easier? A California State Senator recently proposed a bill that would theoretically make it easier for developers to propose major makeovers to existing underperforming or dying malls and shopping centers, provided the final mix included some affordable housing. Seems to make sense, but it also came with a bunch of strings attached, which is a standard issue with many government-initiated “incentives.” At the end of the day, after all the community stakeholders had been satisfied, the underlying zoning requirements met, and the subs lined up to do the construction were receiving prevailing wages, the apparent benefits available felt overshadowed, outweighed by the other obligations.

It appears the projects mentioned above, in addition to some in the Bay Area, LA, and Inland Empire, accomplished their development objectives through the existing zone change and municipal review process. Main Place Mall, with its proposed program of 1,900 dwellings, 400 hotel keys, 750,000 square feet of office space, and nearly a million and a half square feet of commercial uses, was of such a mass that it needed to generate its own Specific Plan. While this thorough entitlement process can be a grind, in the end there tend to be fewer problematic add-on requirements, such as would come along with the supposedly helpful state law, and they can all be negotiated along the way.

While the proposed State law started with a good intention, it just got burdened by bureaucracy, and by the potential to tread on the sacred ground of loss of local control, which is one of the threats of the RHNA (Regional Housing Needs Assessment) process. How could municipalities possibly have their cake and eat it too with regard to these retail and commercial redevelopments? Creating an overlay zone that could be generously applied over existing commercial properties would accomplish a couple of things. First and foremost, if it were straightforward enough, it would provide that elusive assurance developers always seek—predictability. That is, the overlay zone would make it “by-right” to develop multifamily housing on a retail site, even if it includes guidelines and policies to encourage harmony with the existing community context. Perhaps if the project includes attainable housing, it becomes a ministerial review, which would be a tremendous time-saver. In other words, the cities and counties take from the State what it otherwise intends to impose on them, and just do it themselves. The combination of defined parameters of the overlay zone plus the ministerial review would have the guaranteed effect of expediting the delivery of desperately needed housing while enhancing the built environment, all under local control.

Finding the right density and product for a greyfield site of any size is key to success. The state law had a complicated formula for requiring certain minimum densities which were theoretically driven by the fabric of the surrounding context, with the intent of developing something not wildly out of proportion or character with its surroundings. While the search for the proper formula is driven by proximity, land values, and achievable rents, it is also generally true that the closer a property is to an urban core, the bigger the proposed buildings will be. Placing new apartment buildings around Main Place Mall while structuring thousands of parking spaces to compensate for those lost demands large buildings. However, in less urban or even suburban redevelopment opportunities—areas where projected rents are lower—it may be best to pursue less expensive, and hence less dense wood-framed dwelling units. I’ve seen instances where a site seemed to demand at least wrap density, but actually penciled better with a four-story town-over-flat scenario or even 3-story stacked flats. Creativity in imagining what solutions would best bring these smaller properties back to life is critical.

For the State to consider a tool to help achieve many of the goals discussed here is a very good thing. However, reclaiming control of the process for the local jurisdiction seems to be a more promising pathway, where the development team can work directly with City staff to achieve a win-win outcome. Thoughtful overlay zones that can be broadly applied across a City can help to resuscitate even the properties that are of a more modest scale.

                                                                        

How RHNA Will Impact Residential Development
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Above Image Shows An iDA Lab Low-Density Redevelopment Concept – 10 Homes On 2 Lots With A Community Room.

HINT: IT’S A WHOLE NEW WORLD

We, the residential development community at large, are entering an unprecedented season of public/private partnership with an unassailably noble goal of housing everybody in our beloved and beleaguered California. Forces of supply, demand, and policy are aligning at a moment in history when it could not be more sorely needed. At the center of this perfect storm? RHNA, the Regional Housing Needs Assessment.

The Regional Housing Needs Assessment is a tool used by the California State Department of Housing and Community Development to establish the quantity of additional housing units presumed to be needed throughout the state using the criteria of population, jobs base, transportation, and other factors. Numbers are established on a regional basis, and the local Council of Governments (COG) assigns a share to each city within the region. Cities respond by updating their Housing Element, a component of the city’s General Plan that demonstrates how sufficient potential building sites are available in the jurisdiction and zoned to accommodate the designated allotment of new homes, at a range of affordability levels. The current assessment, coming in the midst of an intractable housing crisis, allots a very high proportion of the total number to units affordable to extremely low- and very low-income households.

A housing element is updated about every 8 years. From the previous cycle to the current, the leap in required allotments was substantial for most municipalities, and many are reeling from the load they are being requested to carry. To put that into perspective, the updated RHNA number for SOUTHERN California is 1,342,827 new dwellings spread over 191 cities. On a practical level, it is necessary to produce 180,000 units annually in California to keep up with demand; since the financial crisis, the pace has been about 100,000 per year, so supply continues to fall behind. It would take nearly 170,000 unit deliveries per year over the cycle period to produce the assigned number.

Nearly 50 cities in the region have appealed to the State to challenge their allotments; almost all have been denied. In the previous RHNA cycle, only a tiny percentage of municipalities delivered on their numbers, and it is generally observed there was no real penalty for missing them. In the current cycle, that has changed; cities now face consequences from the State if they fail to produce, by the deadline in October, an updated Housing Element certifiable by the HCD. These consequences can include the changing of the City’s RHNA cycle from 8 years to 4, which would impose a horrendous workload on the Planning Department, or the imposition of moratoria on the issuing of ANY building permits, or even the mandated approval of proposed housing developments. In other words, California State law has grown teeth.

Demand for housing continually increases in California, even in spite of the State’s much-lamented recent net out-migration of households. It is difficult to ignore the underlying fundamentals of supply and demand, and the more than 40% of existing households who are “housing stressed,” devoting more than 35% of their monthly household income to cover their housing costs. These households comprise the majority of those leaving the state in search of more affordable living situations. Thus, the RHNA numbers emphasize the production of housing that will encourage more of these folks to stay.

As the demand for housing, particularly affordable housing grows continually, available land for housing development, of course, is decreasing. This imbalance sets up a fundamental tension for most cities, particularly those who already feel they are “built out.” In the City where I work, the RHNA requirement would demand enough dwelling units to accommodate over 20% of the existing population based on the City’s average household size. That is a major load, by anyone’s estimation. Of those, nearly half are earmarked to be affordable to households earning between 0 – 80% AMI.

Many Cities are holding public workshops to consider plausible alternative approaches to possibly reach these intimidating numbers. Unless a City happens to be surrounded by vast tracts of open land that are not already dedicated to public open space, and therefore inviolable, the search for developable parcels to hit the allotted numbers will be a scrappy affair. Thankfully, with the State’s new ADU law, there’s a resource hiding in plain sight, which is existing backyards of single family dwellings. That’s a start, and it’s a bonus that most accessory dwelling units, or “granny flats” tend to be more affordable than an apartment in a managed community with amenities. If there is any undeveloped land large enough to support a neighborhood of single family detached housing, then to improve it with a design that incorporates both an ADU and perhaps a Junior ADU on each lot would yield more than double the density for that neighborhood that one might normally expect from SFD tracts.

But ADUs, great as they are, will ultimately represent only the tiniest little trickle of production. It is obviously necessary to scout locations for multifamily projects at varying ranges of density, and that’s really where the rub is, as those properties are in extremely short supply; that is, at least under the current zoning. The State has recognized that developments up to 30 dwelling units per acre are considered affordable and can count toward the designated total. At a recent City Housing Element update workshop, I posed a question about the need for re-zoning and up-zoning of entire swaths of the City, particularly large lots, in order to reach the RHNA numbers. The response was quite encouraging; it was agreed that yes, in order to have a prayer at identifying sufficient sites with adequate capacity for new housing, it would be necessary to amend underlying zoning, either by overlay, such as a Conditional Use Permit (CUP), or by outright zone changes. If new zoning is proposed, it would also require an update of the City’s General Plan, so the assumptions made in the Housing Element could legally be supported and encouraged by City policy. It was evident the City was seeking help from its citizens to identify such potential sites, as they indicated that if a participant owned land that needed a re-zone, and they were considering housing, they should approach the planning staff with a proposal, which would be given serious consideration.

How awesome is that? I know the behavior of brokers and land acquisition people seeking to find deals; they drive by an underutilized site, in a good location, and wonder “Huh; could we make this work?” I believe the position of the City on this is that they will take any reasonably plausible lead that can be brought to their attention. When it is necessary to conjure 20,000+ new dwellings, no reasonable offer will be refused for consideration. Of course, there will still be an entitlement process required to make it possible, but we’re veterans of that process and used to it.

I deeply and sincerely hope this process will usher in a new season of profound cooperation between the Cities and the private developers who will actually produce the dwellings. Remember the City only has to identify the potential sites; they are still almost entirely dependent on the development community to deliver the new homes. In a sense, almost anyone can be a developer at some level, and all are needed—from the typical empty nester, high equity homeowner seeking to increase the value of their investment with an ADU to the large institutional organizations with the clout to produce hundreds of units at a time.

So keep your eyes open for awesome opportunities that didn’t exist yesterday! Working together we can accomplish the impossible.

                                                                        

Designing for Generation Z
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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.

Designed for Life: The Cyclic Nature of Housing Designs
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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!

Rooftop patio rendering

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.

                                                                        

Deep Satisfaction to the Mind
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*Original article was written by Daniel Gehman, AIA, LEED AP, for and published in the MFE 2020 Concept Community Report

As we endure this unprecedented global pandemic we have all been in a season of mental reframing—adjusting expectations, strategies, and anticipated outcomes. By the time you read this, I hope the dust will be settling on the qualities and characteristics of life that best provide meaning and definition. With everything still fluid as we struggle to arrive at the “new normal,” I want to seize the moment and suggest we consider altering our expectations of what is beautiful in housing. Gen Z is a generation coming of age and entering the household formation years having been branded not only by this crisis but possibly by their parents’ experience in the Great Recession. This generation has been described as motivated by a heightened sense of pragmatism coupled with “ethical consumption” and a search for “truth.” What will this mean when it comes to their choice in housing, especially from an aesthetics perspective?

Personal pragmatism in action can be characterized by a desire to balance one’s expenses, not over-reaching for either status or luxury before they can be afforded. Partnered with this mindset is often a conviction not to consume more than what is needed, but to understand, without pretense, exactly what it is they will be getting for their money.

When “beauty” and “housing” are mentioned together, most of our minds turn to cosmetic or distinctly surface is-sues. We know that “beauty is in the eye of the beholder,” but it has also been said that “beauty is only skin deep.” What if the holistic understanding of beauty was expanded beyond mere packaging?

Dictionary.com defines beauty as: “The quality present in a thing or person that gives intense pleasure or deep satisfaction to the mind, whether arising from sensory manifestations (as shape, color, sound, etc.), a meaningful design or pattern, or something else (as a personality in which high spiritual qualities are manifest).

“Beauty” in architecture is a wildly subjective topic. There are voices in our industry that pursue “harmony” or “compatibility” of a proposed structure within its given context as if it were the highest imaginable objective. This often gives rise to design solutions, in the quest for community/agency approvals, that unnecessarily complicate the envelope (through excessive ornamentation, geometric modulation, or both), increasing the cost of the building, which in turn raises the rent.

There is also a “keeping up with the Joneses” phenomenon in multifamily that suggests a project’s amenity offerings must be over the top in order to be competitive. But what if I don’t need or ever plan to enjoy a bowling lane or climbing wall? If I don’t use it, I still have to pay for it, along with everyone else in the community, and, again, the rent climbs.

What if we shifted the lens of our mental cameras to view the values of simplicity, commodity, functionality, and an agreeable atmosphere as beautiful? Over 2,000 years ago Vitruvius, the Roman architect, engineer, and soldier, argued for the beauty of simple but pure forms and pleasing proportionality, suggesting that abundant ornamentation was superfluous or even distracting. He also valued “functionality” (or “commodity”) along with strength and beauty. In fact, in his well-known statement of what defined quality building design, “commodity” precedes firmness or delight, so maybe he was on to something in his order-ing of priorities by putting usefulness upfront.

In a search for a home that fits, could focus on a dwelling that provides what one needs without pro-viding (and charging for) things one does not need be of high importance to a Gen Z? What if a developer, propelled by passion, intention, and discipline, deliberately chose to pursue functionality first, including only the most necessary components of functional, comfortable living to deliver homes in the most efficient manner that cost less to rent, accommodating many more households? What if being disciplined in every aspect of the community design and construction could allow this type of development to be done while still making a modest profit, without subsidy? Wouldn’t making housing for many more people pro-vide a deep satisfaction to the mind? What if all this disruption by the pandemic and its lingering impacts caused this kind of thinking to lead to a huge increase in the amount of housing being created that is attainable for many at manageable costs? Now that would be a thing of beauty.