Design Review Update Will Make Housing More Expensive

The City is currently considering changes to the design review process. In short, creating a square footage threshold for design review is a good idea and something we’ve been asking for a long time. In fact, when the fight over microhousing was about whether it ought to go through design review, we argued that since the overall size of a project was the only actual “impact” on a neighborhood in terms of design, square footage made more sense that unit count. The City’s latest proposal makes this shift. But as you’ll see in our letter below, that’s about all that is encouraging here. This was put together with significant help from people who know how to build housing and design review process, especially David Neiman.

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June 12, 2017

Dear Mr. Podowski,

We appreciate the opportunity to share our thoughts on the proposed changes to the City’s design review process. It’s important to state up front that we feel that overall, the design review process has ceased to become, as stated on the City’s website, “one of the tools we use to create a better city,” but rather a costly and onerous process that raises the price of housing for consumers. Design review should add value to a project, but too often it adds time and costs while reducing the number of housing units created. We think the proposal needs significant changes to promote more housing production, not less.

The best part of the proposal is using square footage as the threshold for requiring design review. This will put all townhouse and row house projects on equal footing. But, it is critical to note, that while the thresholds for design review change to square footage, SEPA thresholds are still based on unit count, so the overlay of complexity and perverse incentive to reduce housing production and supply will continue.

There are a myriad of problems with the rest of the proposal.

The proposal creates a threshold for “project complexity” which would include those projects outside the Urban Centers or Urban Villages, zone edge conditions, or adjacent to single-family zones.  This complexity threshold would serve to increase the level of design review process required. Why would the City endeavor to enshrine single-family zones by making the process of building near them more expensive and complicated? This favors wealthier single-family home owners over new people who need more affordable multifamily housing.

Additionally, the proposal adds more public process prior to the Early Design Guidance (EDG) meeting.  This step is ill defined in the legislation and the design review process is already an extensive and staff intensive, facilitated community process; this is why there is little incentive now to go through all that process. It is unclear what this additional process would add other than costs, more documentation, and staff work from both the City and the producer. We suggest dispensing with it.

Here are our more specific concerns:

  • We question the wisdom of eliminating Streamlined Design Review (SDR) as an option since it is the one form of design review that actually works reasonably well with regard to housing production.  We should retain SDR and use it for the lowest category of review, and the threshold for that should be raised to 12,000 to 20,000 square feet. Opting in to SDR to get a little bit of design flexibility is a great option for many small projects. The step up from “no process” to “administrative design review” is punitive and would push good and innovative ideas to the back of the line, something SDR was created to avoid. Encouraging innovation is something that the Housing Affordability and Livability Agenda (HALA) Committee encouraged.
  • The thresholds haven’t been raised and in many cases they have been lowered.  The so-called, “hybrid” design review could in fact end up being worse that full design review. With this proposal, anything larger than 10,000 square feet will require a Type II designation that is exposes projects to an appeals process, a big disincentive.
  • As mentioned above, the complexity measure seems designed to protect the residents of single-family homes by enshrining that zone with special considerations, triggering more extensive reviews and an unlimited number of public meetings for projects adjacent or across the street from single-family. Again, the City is favoring stasis on behalf of people who already live here at the expense of new people who are trying to find housing.
  • Projects with 8 units that avoided design review under the old system will now likely be over 10,000 square feet, a threshold that will lead either to Administrative Design Review (ADR) or to the Hybrid system and at least $50,000 in additional expense, up to a year of timeline, and exposure to appeal under the Type II designation. Obviously, and when taken together with the complexity factor added by adjacency to single-family zones, this creates an incentive to create fewer numbers of units on a site.
  • For small apartment producers, those projects less than 20,000 square feet with a significant percentage of Small Efficiency Dwelling Units (SEDUs), would have typically been in ADR or SDR. Now SDR is unavailable, and they may end up in Hybrid design review that is not a benefit for housing production as we pointed out above.
  • The misalignment of SEPA and design review thresholds creates more potential for a Type II process, and that creates an incentive to under-build a site to avoid triggering more expense through a longer process, exactly the opposite of what the City should want.

We suggest thresholds for design review that will be beneficial and encourage more housing production.

  • Less than 12,000 square feet – no design review
  • 12,000 -20,000 – SDR
  • 20,000 – 40,000 – ADR
  • Greater than 40,000sf – Full design review; we don’t see the benefit in process improvement or costs savings with the Hybrid review over full design review.

This approach to thresholds would mean a 12,000 square foot project, most 8-unit townhouse and row house projects, out of the design review process completely.

The 20,000 square foot threshold will keep most small infill apartment projects in SDR, a process that has, as we pointed out, been working pretty well. And, finally, the 40,000 square foot threshold will keep most mid-scale apartment project in an administrative path, out of the public process.

What we’re suggesting is consistent with what people who build and finance housing know will improve overall housing production and provide more supply for burgeoning demand in our city. As city, together, we can make housing production a priority, consistent with the broader recommendations from the HALA Committee, especially Section IV of their recommendations, or we can continue to allow design review to slow and limit production that will contribute to increases in housing prices.

Sincerely,

Roger Valdez
Director

Making the Case for Density in Portland

We’re pleased to have Tim DuBois as a guest here to share his presentation and his experience taking on the task of explaining the benefits of density to his local neighborhood group. Tim got in touch back in March and in an email he said, “I am hoping to start a grassroots movement to end zoning in Portland. I am a board member for a neighborhood association here and am frustrated with the constant desire of residents putting up roadblocks to development that could possibly ease our housing crunch.” 

My neighborhood in Portland (Sellwood, Moreland also known as SMILE for Sellwood Moreland Improvement League) is a classic streetcar suburb filled mainly with small bungalows. If this neighborhood was dropped on the small town in Michigan I grew up in these houses would be close to $150,000. Yet here in Portland they are worth $500,000 or more. I see this as failure of land use policy.

Yet for current homeowners land use policy would not be called a failure but rather very beneficial. The convergence of this disconnect, my move to the world of urban planning, and a trip to Paris all told me I need to do something more active about the problems associated with our restrictive land use policies. I decided to present to my neighborhood. Fortunately our neighborhood association has monthly meetings and are open to differing opinions (also I am on the board). The President was more than happy to get me on the schedule and give me the appropriate time, for which I went over anyways.

Being able to have these conversations can be extremely helpful. I would encourage anyone to try and do a similar thing with their neighborhood group as I did. Although helping to change minds proved to be difficult, at the minimum they were very respectful and clearly appreciated my opinion. By the end you may feel the same rewarding feeling I did.

If you watch the video start at 1:30 and please be patient with me.

Herbold Throws Shade on Johnson’s “Mission Accomplished” Moment

You might remember that I wrote about Councilmember Rob Johnson’s Mission Accomplished moment a few weeks ago when he claimed that several developers had backtracked on their already approved projects in order to voluntarily participate in the Mandatory Inclusionary Zoning (MIZ). I pointed out that he simply made our case that if MIZ is so great, why is it mandatory. Just make it VIZ, Voluntary Inclusionary Zoning. Councilmember has shown why she is such a worth adversary by asking some even tougher questions.

The answer is that those projects haven’t made any commitment to participate, they simply included MIZ in their scenarios. And as I have pointed out (and pointed out to Herbold in her office a long time ago), Vulcan and big developers downtown negotiated a sweet deal in which they would pay just about what they would have paid for the existing incentive zoning scheme downtown. That is, whatever those developers would participate in is far less onerous that what everyone else in town has to deal with. Here’s an extensive quote from Herbold’s blog:

I asked for additional information about this interest of developers to opt in voluntarily to MHA in South Lake Union and Downtown and voluntarily contribute to affordable housing.   I learned that since the Downtown / SLU rezone ordinance only just became effective the actual outcome from the opt-in provision is still essentially unknown, and specifically:

  1. While some current applications without issued Master Use Permits (MUPs) have shown alternatives to the Design Review Board that incorporate the additional development capacity, none of the approximately 7 projects that could opt-in have gotten to the point of actually formalizing their commitment to opt-in by getting an approved MUP or MUP revision  that utilize the extra development capacity; and anecdotal stories statements of interest are not guarantees of future action.  But I do hope these developers do voluntarily opt in!

  2. The $25 million estimate assumes maximum build out of a site, again despite the fact that we have no specific information about MUPs approved for maximum build out. In other words, the numbers assume that a developer who might at some later date opt in will use all of the additional capacity granted through the Downtown  / SLU rezone ordinance.  That also might not be the case.  We simply do not know.

  3. Further, even if these 7 projects were to either receive MUP decisions under MHA or submit and receive new MUPs for maximum build out of these seven locations, the $25 million estimate does not derive from MHA obligations. The $25M figure is not the addition from the added MHA increment.  The total from the MHA increment would be between $2.6M and $9.1M, the existing incentive zoning program accounts for the rest.  Each of these projects already (without some future possible voluntary opt-in to MHA affordable housing requirements) would contribute between $16M and $22M under their current MUPs, depending on what’s eventually built.

 

HELP! We Need Somebody as Mayor that Will Prioritize Housing Production

The next Mayor of Seattle must pause and eventually end the disastrous policy of Mandatory Inclusionary Zoning (MIZ) and its expression in City policy in the Mandatory Housing Affordability (MHA). The policy will add cost to housing, slow its production, and pour money into an inefficient system of subsidized housing production through the non-profit housing industrial complex. But short of that, is there anything practical we can ask a Mayor to do that would improve housing production if they refuse to stop MIZ? I think there is. What Seattle’s next Mayor could do would be to follow the essence of some of the recommendations from the Housing Affordability and Livability Agenda (HALA) Committee (in particular, Section IV) to reduce costs through improving the permitting process.

I would call this initiative Housing Efficiency Leveraged for Production (HELP) since everyone seems to love acronyms. Housing efficiency in this context means identifying all the things both internal and external to the production of housing in Seattle that limit or add costs to its production, figuring out what those costs are, and then calculating the relationship those costs have on meeting demand. I have to emphasize I’m against setting quotas for production based on projections by planners. Instead, the City’s goal should be reducing barriers and letting demand drive production, not trying to perfectly match demand productions (which are always laughably perfectly round numbers like 6,000 units over 10 years).

The only candidate for Mayor who has ever run a city is Mike McGinn, and I’m sure he’d agree that it’s about more than making speeches. Making a difference means taking advantage of the things the City already has control of in regulation, and that depends on leadership. Here are the broad components of a HELP Program.

Horizontal – One of the biggest problems the City and any government have is coordination between departments. Breaking up the functions of government into different organizational structures makes sense. While this does help efficiency, it can also contribute to the formation of silos, when one department digs in and does what it is assigned to do without coordinating with other departments. Building housing doesn’t happen in the same way that departments are organized. For example, a water main ends up falling into the jurisdiction of both Seattle Public Utilities and the Seattle Department of Transportation.

Vertical – Leadership on housing means creating both clarity on the broader goals of the City when it comes to housing and the very specific and in-the-weeds (sometimes literally) decisions made by inspectors on site and people who review applications for and issues permits. Vertical integration in this context means allowing City employees to make on the spot decisions in favor of moving a project forward in spite of the rules. Too often enforcement of a rule or requirement or an interpretation of a rule or ordinance is subjective. If an employee isn’t empowered to abrogate that rule to move a project forward, then things get stuck.

Interactive – Very often City policy about and interpretation of very specific rules about drainage, paving, street trees, utility placement, and a wide array of other aspects of review and permitting can accumulate and add costs. And very often it is unclear why changes are made one way or another. One project might have to do a water main extension while another doesn’t and from the standpoint of the builder, the two projects look the same. Creating transparency about why the change is happening, allowing dialogue about how the goal – whether political or practical – might be met without slowing things down is essential.

Data – Usually the City is really bad about what data it uses and how it uses it if it uses it at all. Unfortunately on the ground decisions about implementation of a rule or the code is based on outliers and exceptions; one project manages to accomplish completion and rather than see that as a positive (a bunch of new housing units just became available!) the City views this as a “loop hole” that has to be closed. The City must look at the big picture, and allow innovation. When that happens in spite of the code, don’t make the code more stringent, back off the rules and let housing happen.

Narrative – The story here in Seattle is that we have a housing “crisis.” Fine. I have yet to find anyone that can tell me when the crisis began, how measure the crisis, and how we know what we’re doing has ended it. Whatever. If it’s a crisis then let’s act like it’s a crisis. When there are terrorist attacks or accidents and there is a call for donations of blood because there is short supply, the City Council doesn’t impose a per ounce tax on each donation and limit the number of ounces. It’s all hands (and arms) on deck to rapidly meet the demand for a resource.

Finally, there needs to be a high level person, accountable directly to the Mayor that can manage a HELP effort. It can’t be parceled out. Unless everyone, from Department directors to inspectors are measured by how easy they make it for housing production to happen, then people will do the logical thing, put their heads down, follow and enforce the letter of the rule and point to the other guy or to their supervisor or to the builder as the problem. A high level person who can work toward tangible and measurable production outcomes can hold everyone accountable and reward employees who help make housing happen.

Let’s look at an example. On the approved plans for a project, a utility pole is placed in a particular spot and that placement is approved by SDOT. Later, closer to completion, a City Light inspector determines that the placement doesn’t fit the letter of the rules for placement of a pole. The City Light and SDOT people get together with the builder and all determine, first, the placement is safe and won’t adversely impact electricity on the site and leaving it where it is will save lots of money have to underground or move the pole someplace else on the site. The decision is made to go forward with the placement.

These kinds of decisions are made dozens and dozens of times each day and we need to structure the City response so that the outcome of these decisions favors quick and affordable completion of the project. It’s a crisis after all!

 

The Black Hole: David Neiman on the Latest Changes to SEDUs

I know everyone is obsessing with James Comey right now, but here’s something that actually matters: what’s happening to smaller and more efficient apartments in Seattle because of regulation. Noted architect and Small Efficient Dwelling Unit (SEDU) advocate and expert has been warning the City about what their new rules are likely to do to SEDUS. The short answer is incentivize them to get bigger and more expensive for no real or good reason. The story is told in some correspondence between Neiman and the Director of Seattle’s Department of Construction and Inspections (SDCI). I think this will be far more interesting to you than James Comey. 

[May 13, 2007]

Nathan,

As you know, I have expressed concerns about Seattle’s microhousing policy and how SDCI’s recent adoption of the 70-7 rule for determining habitable area artificially inflates minimum unit sizes, making our housing larger, less affordable, and less plentiful.  This draft re-write of the directors rule for SEDUs DR 9-2017 is a small improvement over the previous version, but fails to provide the flexibility needed for architects to design SEDU’s of the size intended by the land use code (as small as 220sf). This policy issue aside, there is a larger, more fundamental code interpretation problem with this director’s rule that needs to be addressed before issuing a final version.

While DR 9-2017 offers SEDU’s a little flexibility with regard to the 70-7 rule, there is no such flexibility given to other unit types.  SEDU’s have a maximum size of 320sf, but under the 70-7 rule many studio apartments will be challenged to achieve a 220sf living room in less than 360-370sf.  Combination of the 70-7 rule and DR 9-2017 creates a situation where many studios between the size of 320-370sf are simply not legal – too small to be a studio and too large to be a SEDU. This is an absurd outcome, where SDCI’s interpretation of a code section intended to protect the public from (supposed) ill effects of living in too-small housing leads to an outcome where a larger unit is illegal but a smaller unit is allowed.

This is not a trivial flaw.  For a real life example, see the plans for Plymouth Housing’s recently opened Sylvia Odom’s Place<http://web6.seattle.gov/dpd/eplan/GetDocument.aspx?id=143549&src=WorkingDocs&n=Approved%20Plan%20Set>.  About half of the units in this project are studios in the 340sf range. They are too big to be SEDUs, but the living room areas that comply with the 70-7 rule are only about 180sf (40sf short of the 220 sf requirement).

This isn’t a hard problem to fix, but it will require that SDCI and CCAB grapple with the fact that the 70-7 rule is overly conservative, inconsistent with what has been allowed in the past, and damaging to the city’s affordability goals and the HALA agenda.

To fix the problem, we need to expand the exception to the 70-7 rule created for SEDU’s in DR 9-2017 so that it applies to the measurement of habitable area in general, not just the habitable area within SEDU’s.  DR 9-2017 allows 20% of the required living room area to be smaller than 7′ wide.  If this 20% allowance was expanded to be a general rule, applicable to all minimum room areas in all unit types (not just SEDU’s), this would create a reasonable allowance for nooks & crannies that are typical in all unit types while still maintaining a requirement for a larger contiguous room consistent with SDCI’s goals. For example:

Unit Type            Living Rm Area req’d                      Area >7′ req’d                   Area < 7′ allowed
SEDU                     150sf                                                     120sf                                       30sf
Studio                    220sf                                                     176sf                                       44sf
1 Bedroom             120sf                                                      96sf                                        24sf

The solution above would be consistent with the CCAB’s rationale in creating DR 9-2017 while addressing its most egregious flaw.  I implore you to give this matter the attention it deserves.

Regards,

David Neiman
Principal, Neiman Taber Architects, PLLC

[June 6, 2017]

Hi David—sorry for the delay in response.  A lot is happening at SDCI.

Before I respond in full, I don’t exactly understand your issue with studios, specifically Sylvia Odom’s Place. Are you trying to qualify all studios as SEDU’s in order to take advantage of the different thresholds for SEPA and design review and in limited areas the parking requirement?

Nathan Torgelson
Director

[June, 6, 2017]

Nathan,

I can appreciate this may not be a top-of-the-agenda item, so thanks for getting back to me.

To answer your question: No, I am not trying to qualify all studios as SEDUs to avoid a land use process threshold. I am trying to resolve a problem in the way SDCI is interpreting and measuring minimum room sizes in dwelling units that creates a class of units between 320-370sf (or larger in some instances) that are simply illegal.  To help explain, I have attached a pdf that shows a plan of Slyvia Odom’s place, along with some calculations of the unit size and the living room size for some of the typical units.  Blow-ups details of those areas are pasted into the email below. This is a problem that we are running up against in all of our new projects that contain studio apartments.

The unit sizes shown are all larger than the 320sf maximum allowable size for a Small Efficiency Dwelling Unit (SEDU), so they would be classified as an Efficiency Dwelling Unit (EDU). An efficiency dwelling unit (also known as a studio) requires a minimum 220sf living room.  Because of the way the new 70-7 rule excludes all room areas less than 7’ dimension from the living room area count, the living rooms of these studios are too small be considered a legal dwelling unit.

These units fall into the “black hole” I have described – too large to be a SEDU and too small to be a studio. We have projects that are running up against this problem & I have no way to proceed with the design of the project on a rational basis. Should I assume that SDCI is going to enforce the code this way & create a unit size between 320-370sf that is simply illegal? Or should I assume that SDCI will apply the dimensional flexibility for SEDUs outlined in DR 9-2017 to other unit types?

Projects like the Sylvia Odom [see below] could be “fixed” by widening the corridors to pull space out of the units to reclassify them as SEDUS. This would have the ironic effect of forcing applicants to reduce the size of their unit living rooms, an odd outcome given that the whole issue is driven by SDCI’s code interpretation aimed at ensuring that unit sizes do not become too small.  Alternatively, the problem could be solved by reducing the unit count in order to make the units larger, resulting in housing that is more expensive and less plentiful, contrary to the city’s HALA agenda.

Does this explanation help?

-DEN