Housing Affordability: Using the Buildings You’ve Got

Residents of cities like New York are familiar with the flexibility of interior spaces. Townhouses built for the rich become working class apartments when a neighborhood loses its luster, or even single-room occupancies. Units in tenements get combined into larger apartments. More recently, and less fortunately, apartments have been getting turned back into townhouses in places like the Upper West Side.

Early residents of LA would have recognized the same patterns. Bunker Hill began as grand Victorian mansions and ended with the mansions carved up into low-cost lodging houses, before the whole area was demolished in an urban renewal scheme. Recent experience in LA is largely limited to the adaptive reuse ordinance (ARO), which resulted in the beneficial conversion of many vacant commercial buildings downtown to residential use. The ARO should be commended and expanded, but the need for it is indicative of how little appreciation we have for how cities once developed.

Residential zoning in LA, like most California cities, separates single-family residences and multi-family buildings, whose density is in turn regulated by a minimum lot area per dwelling unit. Zones are also controlled by a maximum floor-to-area (FAR, floor space of the dwelling units to area of the lot). For example, in LA, the primary single family zone is R1, and two of the main multi-family zones, R3 and R4, require 800 SF and 400 SF of lot area per dwelling unit, respectively. In Glendale, R1 is the most common single-family zone, and there are four main multi-family zones, R-3050, R-2250, R-1650, and R-1250, with the number indicating the required lot area.

Since the demand for housing is high, and many areas have been downzoned, many buildings already have the maximum number of units allowed by the zoning, if not more. In addition, some cities have minimum square footages for apartments, and few buildings have excess parking spaces beyond what’s required by high parking minimums.

As a result, one of the most cost-effective ways of increasing housing supply – remodeling existing buildings to increase the number of units or convert underused spaces into apartments – practically never happens. This is unfortunate, because you really can’t build new housing units at lower costs. The owner already owns the land, and the building is already there; financing costs for both may have already been fully paid off. All you have to do is remodel the interior.

Compare the strict controls of California to Japanese zoning. Japan has exclusively low-rise residential zones, where FAR is 0.3-0.5 and height limits are also not drastically different than in California’s R1 zones. However, unlike California, Japan does not prohibit multi-family development in these zones, and it doesn’t have minimum unit sizes or lot areas. The result is a healthy mix of housing options for people from all walks of life, from students to families to retirees.

We can see a mix of housing options in some places in California; for example, last week’s look at West Wilson Ave in Glendale shows that a mix of housing types can work just as well in California as elsewhere. It’s no coincidence that, if you spend some time walking on W Wilson, you’ll see everyone from retired couples to families with kids, singles to extended families.

Regrettably, LA’s mixed housing neighborhoods are going to be coming under increasing pressure from rising rents. Last week, we mentioned the possibility of a small SFR with a few ADUs being torn down and replaced with a smaller number of larger housing units. But we could also see existing duplexes converted into single-family homes, just like New York’s apartments being turned back into row houses.

Solving LA’s housing crisis is going to require a lot of new construction. But every solution that could help should be on the table. That means we should consider using existing buildings to their best potential too, by giving people the flexibility to create more housing units in existing structures. Zoning changes to allow more units in existing buildings could be designed to serve other goals as well.

For example, the LA region has many older apartment buildings that do not meet current requirements for seismic design. Allowing the building to be remodeled to increase the number of units could be tied to a requirement for seismic retrofitting. Increasing the number of units would help owners cover the cost of retrofits, reducing the need for cash-strapped cities to try to provide tax subsidies. Another option would be to require a few of the new units to be deeded affordable.

LA needs a housing boom, but that doesn’t just mean new construction. Existing buildings can help contribute to meeting our housing needs, and provide some of the best opportunities for affordable units.

‘Round Glendale: West Wilson Ave

Our inaugural look at development patterns in Glendale starts with W Wilson Ave, which runs from Brand Blvd, Glendale’s main street, to San Fernando Rd, which forms the border with Los Angeles and has a decidedly more industrial aesthetic.

For readers outside SoCal, Brand Blvd is Glendale’s main commercial street, home to everything from Glendale’s small skyscraper district to car dealerships to Rick Caruso’s wildly successful Americana at Brand, along with a wide variety of local businesses. Glendale’s early planners put a stunning view of the Verdugo Mountains to the north, and later planners in Los Angeles anchored the view to the south with the Library Tower. Brand serves as the west-east dividing line in the city, and it’s here we’ll start our journey down W Wilson Ave – down indeed, as this entire part of Glendale slopes gently west towards the LA River.

Downtown Glendale

Well, we’ll almost start at Brand. I’m going to cheat, and start one block east at Maryland, in order to offer up a couple more buildings. First up is the Maryland Hotel, one of only a few pre-war (World War 2, that is) multifamily buildings we’ll see. How do we know it’s pre-war? Fire escapes and no parking!

Kitty corner to that is a construction site, future home of the Laemmle Lofts – a mixed-use development of 42 apartments, a restaurant, and a 5-screen movie theater.

Across from that on the south side, there’s a one-story commercial building housing some restaurants and medical offices.

This side of the block has a nice mid-block pedestrian court leading to The Exchange, one of the oldest developments of the “new” downtown.

On the northeast corner of Brand and Wilson, there’s a Jewelry Mart in an older one-story commercial building, fitting since Glendale is the Jewel City.

There’s another set of older one-story buildings across Brand, on the north side of Wilson, with small retail spaces that are the perfect fit for local and niche businesses. Los Angeles in general has a wealth of this type of space; let’s hope the commercial construction market picks up so that rents don’t start to rise too much.

The building at far right is currently vacant; it used to be a Staples but apparently before that it was a Woolworth’s.

On the south side of Wilson, stretching from Brand to Orange, is a big, bold symbol of the new downtown Glendale: The Brand Apartments.

There’s a lot to talk about here, so let’s take a closer look. First off, let me say that I love this building. I think it looks great. Since it’s got frontage on Brand, which is by far Glendale’s highest-demand retail street, the retail filled up almost instantly with a Chipotle and a Tender Greens. They may not be your cup of tea but established brands that can pay higher rents are what you’re gonna get in new retail more often than not. The mix of businesses in the older building across the street is a reminder of the importance of having some old buildings. Of course, let’s not forget that if you don’t have any new buildings today, you won’t have any old buildings tomorrow.

Here’s a shot of The Brand showing its neighbor to the south, the 20-story Glendale City Center office building. I’m told the zoning at The Brand would have allowed for another 20-story building, but the market for high-rise residential just isn’t there.

Here it is looking southeast back towards Brand.

The next block west is the second part of the same development, and again, I think they did a fantastic job.

The horizontal elements break up the façade nicely, the vertical stone-faced element is a beautiful accent, and the orange support is a nod to the first building that ties things together without being repetitive. The orange accents are also a nod to Orange St, which runs between the two buildings, and now has one of the more urban vistas in Glendale.

Note how the second floor is cantilevered out over the sidewalk, with the balconies projecting further. Here’s another shot showing the second building doing that.

A reliable source tells me that the edge of the second floor projection is at the property line. I like the effect; it creates a wider sidewalk at street level, but doesn’t make the street room feel any wider, so it still feels like a downtown.

The north side of the street here is another block of small, older one-story commercial buildings, home to a mix of small restaurants and retail.

A Big 5, super convenient if you’re in need of outdoor supplies, takes us to Central on the south side, with the north side being a parking lot.

The northwest corner of Wilson and Central is another strip mall, while the southwest corner is currently under construction with another mixed-use development.

Development in this area is governed by the Glendale Downtown Specific Plan, designed to encourage mixed-use development – the “18-hour city” as official plans call it. The zoning for this area is shown below.

The zoning regulations of interest to readers are summarized below:

Note that the zones with the highest density, DSP/BC-B and DSP/BC-C, are occupied by The Brand apartments and Glendale City Center, but there’s a lot of area with 4-6 stories by right still available. Parking requirements are one spot for singles and 1-bedroom units, two spots for all others, and one guest spot for every 10 units for projects of 10 or more units. This probably sounds like a lot to many readers, though it’s less than required elsewhere.

Vineyard – Central to Columbus

Past here, we’re out of the Downtown Glendale Specific Plan and into West Glendale, or Vineyard if you want to get particular about it, and development changes to smaller scale, all residential buildings. If you haven’t already, you’ll want to open up Google Earth and turn on 3D buildings so you can see what’s really going on; it’s totally impossible to figure it out from the street! Development here offers a lot of inspiration for how to densify existing single-family neighborhoods, but wily West Wilson hides a lot of its tricks from view.

First up, this handsome pre-war apartment block called Canterbury Court. Note its size relative to its neighbor! The Tudor-ish façade is interesting too, since that style enjoyed a renaissance during the 1980s apartment boom, as we’ll see later. The age of many buildings on Wilson is missing in this handy database, but it does have data for Canterbury Court – 1928.

The first building on the south side of the street is this single-family house, with an accessory dwelling unit (ADU) behind it not shown.

West of that is our first trick building. From the street, it looks like a simple fourplex, with numbering (330, 330 ½, 332, 332 ½) that evokes prewar patterns.

Check it out in Google Earth, though, and this fourplex has a hidden ADU building (can we call it a rear house!?) that looks like it has another four units! This unimposing lot appears to be developed at close to dingbat density.

On the north side, we have three larger 1980s apartment blocks (the underground parking is a dead giveaway as to the era of construction).

This one is harder to place (it’s 1975), but I really like the twin chimneys and peaked roof.

Back to the south side, we’ve got a classic dingbat (1961) and a building that I’m guessing is from the 1980s just because it looks like boatloads of unprofitable condos built around Lake Tahoe at the same time (and indeed, it’s 1987).

The next building west puts on the front of a single-family residence (SFR), but it’s got an ADU out back and it’s actually a duplex itself.

Moving back to the north side, we’ve got an SFR and a dingbat, built in 1962.

Well, at least that’s what we have in front! The dingbat’s got a rear house that appears to be two more units, and the SFR has an ADU building.

West of that, there are three buildings that genuinely appear to be SFRs.

Back to the south side again, there’s another classic dingbat, and an older SFR.

We’ve then got another dingbat with a rear house (built 1963) just peeking out into view.

A newer single-lot apartment building (built 2005) and two large dingbat-like buildings (1986 and missing) take us to the corner of Columbus on the south side.

On the north side, three SFRs take us to Columbus. The first has a couple units over a carport in the back, and the second has a single ADU. The houses all date to the 1910s and 1920s.

Vineyard – Columbus to Pacific

This block starts with a bang, with dueling dingbats on the corners, both built in 1963.

After that, on the north, we have an SFR with a four-unit rear house behind it, and a large 1984 building.

On the south side, we have a single SFR (just visible on the left), and an SFR with a multi-unit ADU behind it.

This is one of the trickiest blocks on W Wilson; housing units are everywhere – blink and you’ll miss them. Fortunately we have an alley between Wilson and Broadway to help us get a little better view on the south side. The next two buildings on the south side are what looks like an SFR and, um, what?

Maybe we can get a better view from the back.

Yep, that’s three cottages with a two-unit rear house over a carport. And surprise: totally invisible from Wilson, there are two little buildings behind the SFR

Next up is another larger structure, dating to 1991, the very tail end of the 1980s boom.

This is followed by another SFR with a four-unit rear house.

Note that there is a wide variety of shapes and sizes, but the size isn’t necessarily a good proxy for number of units! In fact, the adjacent building to the west is a newer project, taking up 4 lots, but appearing to only have 18 units (4.5 units per lot, the maximum allowed by the current zoning). They’re certainly larger units, but on a dwelling unit basis, this building is less dense.

Back on the north side, we have two SFRs, but they both have ADUs, hidden but for the subtle house number that can be seen at the edge of the yellow house.

There are also two SFRs across the street on the south side, and the one on the right looks to be the only unit on the lot. The one on the left has a second house in the back, hidden from view on Wilson.

There are two more SFRs to the west on the south side, with the left one harboring a four-unit rear house, and the right one harboring a small parking lot for, um, what? The buildings across the alley?

The north side of the street is much more straight-forward: several 1980s apartment buildings and then two SFRs to take us to the corner of Pacific. The apartment building on the right is from 2002.

 

The south side finishes up with two SFRs that, of course, have ADUs out of sight. They’re actually big enough to be called houses in their own right.

Vineyard – Pacific to Concord

Ok, ready to push through the last block? Well, plus a little coda, and a zoning discussion?

As we’ll see, the further we get from downtown Glendale, the less dense the development gets. The southwest corner of Pacific and Wilson is the last big pre-war multi-family building we’ll see. The architecture, lack of parking, and numbering scheme (500, 500 ½, 502, 502 ½) are the giveaway.

Next, there’s a few SFRs; the one on the left has an ADU in the back. With only a few exceptions, the SFRs on this block date to the early 1920s.

The north side of the block starts out with SFRs as well; I think the center one in the first picture has an ADU but it’s hard to tell from the street. The house in the center of the second picture definitely does, but it’s not easy to see. The one on the right in the last picture also has an ADU, which can be seen in Google Earth.

On the south side, we have the first large apartment building on the block, taking up two lots. This building was built in 1979, before any downzoning, at the head end of the 1980s boom.

Two true SFRs with no ADUs on the south side take us to Kenilworth Ave, a small local street.

Next, on the north side, we have a single SFR, followed by a large 1985 apartment building that takes up four lots and appears to have about 20 units. The landscaping on the street makes it almost impossible to see all four buildings at once.

On the south side, there’s a 1987 building and a 1963 building, both typical for their time.

This is followed by a small SFR set so far back on the lot that one might conclude this was originally an ADU to a dearly departed main dwelling. However, if that’s the case, the original house has been gone since at least 1989, Google’s oldest aerial image for the region. The sign out front announces a proposed triplex on the site, the greatest number of units allowed by the current zoning.

Next to that is a 1980s-looking building that shows how much more density was previously allowed.

Back on the north side, there’s an SFR with an ADU peeking out; in Google Earth, it looks like the rear building actually has two units.

The next house west straight up has a second house in the back yard.

On the south side, there are two handsome SFRs; at left, an ADU can be seen, and there is a third unit totally hidden from view.

Next to that is a large apartment block on two lots – two buildings, not identical but fraternal twins, dating to 1983 and 1985.

Further down, a classic modern stucco apartment house from 1963 (hey, didn’t we see you on dingbats dingbats dingbats?) and a Tudor-ish 1974 building on four lots.

Across from that, on the north side, are several SFRs; all but one have ADUs, but you’ll have to look in Google Earth to see them.

The north side of the block continues to stretch west with SFRs; some have ADUs, while others are actually duplexes, a type we haven’t yet seen much of on Wilson.

You’ll really have to look closely in Google Earth and Street View to try to see what’s what. Here’s a few where you can catch a glimpse of the ADU.

Here’s one of the more obvious duplexes.

Rounding out the residential units on the south side, we have an SFR (with an ADU not shown) and a dingbat with a rear house.

There’s a large one-lot 1973 building and then two true SFRs without ADUs.

The south side then goes industrial, with some single story office/warehouse type buildings.

Vineyard – Concord to San Fernando

The last little block takes us down to San Fernando Rd, which runs next to the Metrolink tracks that form the boundary with Los Angeles. This block is made up of one-story industrial uses.

At the corner of San Fernando, there’s a small local hangout.

Vineyard – Zoning

Zoning west of Central is covered by Glendale’s general zoning plan.

From east to west, the blocks of W Wilson are zoned R-1250, R-1650, R-2250, and IMU. The R zones are residential multi-family zones, where the number indicates the required lot area in square feet per unit. IMU is industrial/commercial mixed use. Parking requirements are 2 spots per unit, except 2.5 spots for 3-bedroom units and 3 spots for 4-bedroom units.

Thus, the permitted residential density on W Wilson steps down as you head west towards San Fernando Rd. Lots on the north side of Wilson appear to be about 50’ x 140’ lot, which translates to 5, 4, and 3 units per lot; on the south side, lots appear to be about 50’ x 175’, which translates to 7, 5, and 3 units per lot.

Which Way, W Wilson?

West Wilson Ave presents an interesting variety of residential housing types, from single-family houses to large apartment buildings, backyard cottages to dingbats with rear houses. In these few blocks, it captures both the opportunities and challenges for housing in greater LA in general.

The housing types of W Wilson point the way forward for natural growth of less dense neighborhoods, such as centrally located single-family areas. These options – ADUs, rear houses, small apartment buildings – are some of the best ways to improve housing affordability. They’re lower cost to construct, and don’t result in the loss of a lot of existing units. They allow for an evolution of building types rather than a sudden change. There are still development opportunities on Wilson; you could buy one of the remaining SFRs and built townhouses or put up some ADUs in the back. We would do well to allow other neighborhoods to grow the way Wilson did.

On the other hand, this area was clearly downzoned in the 1980s. There are lots occupied by SFRs where you can only build 3 or 4 units, despite the adjacent lots having 7 to 10 units. If housing prices in LA continue to rise, there will be pressure to redevelop lots that are currently occupied by a SFR and a few ADUs. Under the current zoning, we won’t end up with more housing units, just larger, newer, more expensive units. In some cases, redevelopment might result in a net reduction of units. It shouldn’t be a radical idea that new development be permitted to be at least as dense as its neighbors. Would a few 5-story buildings really make a big difference in how the street feels?

The foot of Wilson Ave, along with San Fernando Rd itself, is worth looking at in more detail, in a future post. For now, development patterns on Wilson Ave stand as proof that we do know how to do mixed-use projects and residential density in the LA region, when we let ourselves do them.

Dingbat Renaissance

Note: for ease of understanding, all costs, prices, rents, and so on are presented in 2014 dollars, adjusted from 1964 dollars per the BLS inflation calculator.

Discussions on affordable housing in Los Angeles, and California in general, often include debate on how to maintain existing affordable housing stock. These buildings, constructed mainly in the 1950s and 1960s, are referred to as dingbats. They are invariably low-rise wood-frame and stucco construction, though there’s some variability in scale, from the classic single-lot six-unit dingbat to larger buildings constructed on several assembled single-family lots.

While there’s a lot of interest in preserving the affordable housing units in these buildings, there’s a curious lack of interest in how dingbats came to exist. Despite the fact that many were speculative, they were purpose-built affordable housing, and they were built in mass for decades. It stands to reason that a city facing a huge shortage of affordable housing should want to understand how the dingbats were built, and if we might build large amounts of affordable housing by the same process today.

Fortunately, the dingbats are not a mystery. In The Low-Rise Speculative Apartment, published in 1964, Wallace Francis Smith offers a detailed analysis of the dingbat construction boom then taking place in Oakland. Presciently, Smith concluded that dingbats were serving a useful function in society, and that their construction ought to be encouraged. As we will see, the opposite happened, but to start, let’s consider the factors that, per Smith, enabled construction of dingbats:

• Savings looking for investment, and thus lending institutions with excess lending capacity.
• Investors looking to buy small residential properties upon completion.
• Depreciation tax incentives that made the properties attractive investments for high-income individuals, even if the nominal net cash flow from operations was very small.
• Low cost of land per dwelling unit (du), median $10,700.
• Low cost of construction per du, median $47,185.
• Short duration of construction, median 7-9 months but as little as 3 months.
• Zoning that allowed single-family residences (SFRs) to be replaced by dingbat apartment construction.

Parking requirements, as enacted by Oakland in 1961, were determined to increase construction costs, but not to the extent that they stopped construction altogether. Rather, marginal projects (which logically include the most affordable dwelling units) became impossible to build profitably.

These conditions produced a large quantity of affordable units. One bedroom units, averaging 635 SF, rented for an average of $820/month. Two bedroom units, averaging 835 SF, rented for an average $1,055/month. You can scarcely rent something in the oldest buildings in the cheapest neighborhoods in LA today, let alone new construction.

Dingbat Factors Today

Ok, all of that is great for people in 1964. What about 2014? Could the same combination of factors allow for a boom in affordable housing construction in Los Angeles today?

The first three factors relate to availability of financing and willing investors. This is not the area of expertise for this blog, but lending capacity does not seem to be an issue. Neither does the ability to find investors; consider the current level of foreign interest in owning real estate in US cities. Tax structures relating to depreciation are not something that can be addressed at the city level, and would require federal action.

The next three factors concern the costs of planning, permitting, and building the project. Cost of land per dwelling unit was very low for the dingbats. Assuming R4 zoning, which allows 12 du on a 5,000 SF lot, you’d have to be able to buy such a lot for $125,000 to get similar land costs per unit. You simply cannot find buildable lots that cheaply in LA today.

Construction costs were also very low, with the figures above equating to about $75/SF for building a dingbat. This is not out of line for construction of SFRs today; you can buy new SFR construction for as little as $85/SF in places like Adelanto. Perhaps it’s possible to see classic dingbats as big SFRs. On the other hand, dingbat construction is universally considered to be low quality, good enough only to meet the building codes of the time, lacking in amenities like, say, soundproofing between apartments. In addition, changes in seismic building codes in response to the 1970 Sylmar earthquake and the 1994 Northridge earthquake have undoubtedly increased construction costs for structures with open stories on the ground floor, like the classic dingbat carport. Today’s multifamily construction costs are much higher, often over $200/SF.

Duration of construction indirectly impacts construction costs, because carrying costs are increased when the duration of construction is longer. Much construction, including many of the original dingbats, is financed by a construction loan, which is paid off and replaced by a permanent loan when the building is complete (or when the speculative builder sells the completed building to an investor). Construction loans usually have higher interest rates than permanent loans. The faster construction can be completed, the faster the building can be put into revenue use and the construction loan retired. The city can reduce duration of construction by facilitating permitting and working to schedule building inspections so that they minimize downtime on the jobsite.

Lastly, there’s the need for zoning that allows dingbat construction. In LA, this generally means R3 or R4, which allow 6 du and 12 du on a typical 5,000 SF (50’ by 100’) lot, with R3 corresponding to the classic image of a dingbat. R5 zoning allows 25 du on such a lot, but this can’t practically be accomplished with wood-frame construction given setback, height, and floor-to-area (FAR) zoning requirements. Since 1970, zoning changes have significantly reduced the amount of R3 and R4 zoned land, especially in areas like the Westside. While small apartment buildings are still built in neighborhoods like Palms, in most places, they are precluded by zoning.

Parking requirements are part of zoning; in LA, zoning stipulates 1 spot per studio, 1.5 spots per 1 bedroom apartment, and 2 spots per 2+ bedroom apartment. As we shall see shortly, they have a major impact on the cost and feasibility of small apartment building construction, particularly on small lots.

Let a Thousand Dingbats Bloom

Given these parameters, let’s try to make dingbat construction work today, and see what cost inputs we might be able to change.

Dingbat, 1964

Now, what do good engineers do before performing tests? They calibrate their equipment! So first, here’s a shot at analysis of dingbat construction in 1964.

The columns on the left present a breakdown of total costs and costs per unit. “Soft costs” refers to things like design and permitting; other cost categories are hopefully self-explanatory. At center, you can see we are assuming a classic 6-unit dingbat, the typical 635 SF 1-BR apartment size, and construction costs of $75/SF. “Efficiency” refers to the ratio of usable apartment space to total building size, which includes unproductive areas like stairwells. At right are assumptions for several cost categories: soft costs are assumed to be 10% of construction, marketing 1% of construction, carrying costs 8% of land plus demolition plus construction, and profit 6% of land plus demolition plus construction.

To convert this to a monthly rent, we first calculate a monthly mortgage payment by taking the cost per unit and amortizing it out over 30 years, at an assumed loan rate of 6%. Since rents must also cover building operating costs and unit vacancies between tenants, we divide the mortgage payment by 70% and then 95%, thereby accounting for 5% vacancy and operating costs equal to 30% of gross rents. Operating costs of 30% are a little on the lean side for LA apartment buildings, but not unreasonable.

And, voila! We get a monthly rent in the vicinity of the rents reported by Smith in 1964. Note two things here. First, a rough guess of monthly rent is about 0.90% of total costs. This is a little higher than some other estimates I found (0.75% to 0.80%), but let’s err on the side of caution. (If you assume an equity investment of 20%, you could cover the mortgage and operating costs with monthly rent of 0.73%.) Second, we can assess the contribution of each cost category to monthly rent. As you’d expect, construction costs dominate, followed by land costs.

Palms West, 2014

Back to the present. What would a small development look like on the Westside? Fire up ZIMAS and look to the north and west of Palms, and you’ll see large areas in yellow, which indicates R1 single-family zoning.

Looking at some of the less expensive areas, you can find an SFR in for something like $800,000. Let’s assume it’s upzoned to R3, which would allow six units. I know a lot of readers don’t like bundled parking, but for the sake of argument, assume it’s hard to sell condos in these neighborhoods without parking. Since they’re primarily single-family, there’s not a lot in walking distance and it might be a hike to decent transit. Yes, condos. Not your parents’ dingbats, but when you’re paying that much for land, it’s probably the way to go. Here’s one possible configuration, meeting city parking and setback requirements.

Four stories, parking on the ground level, and two units per floor above that. I assumed elevators would be required for all buildings. This gives you as simple a design as possible for the podium, which would probably have to be concrete. Costs are presented below.

Soft costs were increased to 15%, to account for increased permitting and design costs, and marketing to 8%. Construction costs were assumed to be $225/SF, a rough estimate based on a variety of sources for podium type construction. Could you sell these generously sized 1-BR condos for about $525,000 on the Westside today? I think so.

Here’s another option for Westside development, with a three-story building that has four small units and two large units. I bumped construction costs up to $250/SF to account for the higher proportion of concrete.

For this option, I split all costs except construction equally among the units. This gives some units just under $400,000. Distributing costs differently would decrease the price for the small units, but increase it for the large ones.

Vermont Knolls, 2014

Fine, you say, but wasn’t the point of this post to look at affordable housing? Let’s take this model to Vermont Knolls, a part of South LA bounded by the 110, Normandie, Manchester, and Florence. Some areas are zoned R3, but most are zoned for less density (RD, R2, or R1). Here, the cost of a single-family lot is something like $300,000.

To drive down the cost of land per unit, let’s assume it’s upzoned to R4, which again allows 12 du on a normal lot. Here, we can really see the impact of parking requirements. Even if all 12 units are nominally studios, the zoning requires 12 parking spaces, which would be nearly impossible to configure on a 5,000 SF lot with only 50’ of street frontage. Let’s assume the city eliminates parking requirements; we’ll still throw in a few parking spaces out front – they’re nearly free and would generate some additional revenue.

Three stories, four apartments each floor. Construction costs were assumed to be $140/SF, on the low end of what I’ve seen for low-rise construction in LA. Soft costs were dropped back to 10%, on the assumptions that design costs would be reduced by working from a cookie cutter plan and that the city would facilitate permitting and inspection. Marketing was dropped to 1%; affordable apartments rent themselves.

Hitting rents under $1,300/month is a big deal. Why? Well, if we raise the minimum wage to $13/hr, a full-time minimum wage worker would make about $26,000/year. A two-worker household would earn about $52,000/year. Using the 30% of income standard, a brand new $1,300/month apartment is affordable for such a household. If construction costs could be driven down more, all the better; for example, at $100/SF, the rent would be about $1,000/month.

Here’s another option, going with four stories and a mix of studio/1BR (ground floor), 2BR (floors 2-3), and small 3BR apartments (floor 4). Costs were apportioned the same way as the Westside plan.

I’m not sure if these larger size apartments would be competitive with existing rental stock. Again, driving construction costs down would make a big difference; at $100/SF, the 1BRs would be about $1,000/month, the 2BRs around $1,200/month, and the 3BRs $1,550/month.

ADU Sidebar

What’s even more affordable than dingbats? Accessory dwelling units. These can be very basic one-story wood-frame projects. If the property owner does the development, there’s no land or demolition cost, and we can safely assume true SFR construction costs, say $80/SF. For a 700 SF ADU, we get the following costs.

Importance of Single Lot Projects

Readers have probably noticed that all the development concepts in this post are based on single lot projects. Lot assembly greatly facilitates things; for example, by putting two lots together, you eliminate the lost space of the side setbacks between them, which lets you offer larger apartments. This will also drive down costs per square foot, because larger apartments usually include more cheaply built living space, rather than more expensive kitchen and bathroom space.

However, I think the ability to profitably develop a single lot is crucial, because it eliminates the potential for adjacent owners to hold out for huge payouts. Indeed, as Smith notes, most of the original dingbats were built without even considering lot assembly, which was deemed to add too much time to the process. If a single lot can be developed profitably, it’s mutually beneficial if adjoining owners decide to consolidate and develop a larger building. This also eliminates the need for city planning agencies to go down into the weeds and use eminent domain to assemble lots large enough to be feasible. The city could facilitate single lot projects by reducing or eliminating parking requirements and reducing setbacks.

Be Proactive, Not Reactive

An approach to affordable housing that strives to enable market-rate construction of projects like these all over the city is a more proactive policy. Trying to save existing affordable units, while necessary in the short run due to California’s terrible housing situation, can only slow down, but never reverse, the worsening affordability problem. Note that projects like the Westside condo examples presented are critical to this approach to housing, because they alleviate market demand for upscale neighborhoods. If development is strangled on the Westside, gentrification elsewhere is almost inevitable.

This approach isn’t available to every city. LA is large city, and have a variety of neighborhoods, including some where land costs are not prohibitively high. This may not be true for a place like San Francisco, where it seems improbable that $1,500/month 2BRs could be built in the city under current conditions. Because counties and municipalities are smaller in the Bay Area, there will likely need to be more cooperation between jurisdictions.

In LA, though, we should be able to permit and encourage construction of a variety of housing. We ought to do so while we have the chance.

This post owes a debt of gratitude to this post on costs in SF by Mark Hogan, and helpful interaction from @markasaurus, @eparillon, and @mottsmith on Twitter.

*Smith gives $44,315 as the permit construction cost. In Appendix A, this is estimated to represent 82% of total development costs, which included lending and marketing costs. Actual construction costs were estimated as 87.31% of total development costs. Therefore, I assumed actual construction cost per unit was 0.8731 * ($44,315 / 0.82) = $47,185.

Four LA-Native Housing Types that are Ready to go to Work Solving Our Affordable Housing Problem

LA needs a housing boom. Not just in downtown or Hollywood or Santa Monica, but everywhere. From Reseda to Harbor Gateway, Palms to Fontana, Bellflower to Mar Vista. It can’t be just a few enormous projects; we need thousands and thousands of small projects all of the region. To paraphrase Mao, let a thousand dingbats bloom, let a thousand accessory dwelling units contend.

In that spirit, here’s four housing types already found all over LA that are good to go. All we gotta do is let them do their thing.

Dingbats

We sort of have to start here, don’t we? The dingbat is probably the definitive LA apartment type. Reviled by architecture critics and urbanists for their style, doubted by structural engineers for their seismic stability, lived in by hundreds of thousands for their undeniable functionality and cost effectiveness.

On the style count, well, everyone can’t be as beautiful as Andres Duany. If you care about architecture, worry about making sure that architectural variety and experimentation aren’t being sacrificed at the altar of neighborhood character. Most of us can’t afford Hermès, but we’ll happily take Forever XXI.

On the seismic count, the problem with dingbats is the open nature of the first level caused by parking bays. (In engineering parlance, it’s a soft story because it has much less shear strength than the solid-wall apartments above.) This can be fixed pretty easily by (1) reducing parking requirements and eliminating the problem in the first place and (2) engineering better connections between the steel supports and the wood above. It’s a trivial problem – really.

Where should they be built? Just about anywhere in LA County. In the City of LA, the sweet spot for dingbats is probably neighborhoods that are currently zoned for minimal multiple-family (RD or R2) where dingbats could probably be built under R3 or R4.

Attached Apartments

Regardless of the zoning code’s approval or lack thereof, accessory dwelling units and attached apartments abound across the city. It’s a win-win-win: the region gets a bunch of apartments supervised by someone who’s bound to really give a crap about the impact of their tenants (i.e. an on-site owner), owners get some bonus income from renting the units, and renters get, you know, a place to call their own.

You see these here and there in places like Palms and Torrance, sometimes even purpose-built as SFRs with apartments in back. In a few places, like Hawthorne, you see them all over the place. It’s a really natural addition to neighborhoods.

Where should they be built? Any single-family neighborhood that hasn’t seen an increase in supply in about 50 years. In the City of LA, this is everything R1 and below.

Cudahy Lots

Way back at the turn of the last century, LA was seeing a large number of immigrants from the Midwest, looking for better weather and better work. Michael Cudahy enticed a bunch of them to buy long, skinny lots (50’-100’ wide by 600’-800’ long) in his eponymous city, with the idea being that you could build a house and have a huge back yard for a garden or orchard.

As the population of LA County boomed, these lots were redeveloped into apartment complexes that are sort of like the megafauna of railroad flats.

The resulting urban form looks like low-rise suburbia, but creates surprisingly high densities: Cudahy is the second-densest city in California (after Maywood).

In addition to their namesake city, Cudahy lot redevelopments can be found in places like El Monte. Historically, these redevelopments have been mostly 1-2 story low-rise, but there should be no harm in letting them go to 3-4 stories and do apartments.

Where should they be built? Any place that has the requisite lot type. This includes Sylmar, Avocado Heights, Fontana, several parts of San Bernardino, Jurupa Valley, parts of the Antelope Valley, and the remaining lots in Cudahy and El Monte.

Podiums

You know podiums – they’re those mid-rises with up to 7 stories of wood-frame construction sitting on top of a story or two of concrete base. The height limitations are due to seismic code and fire code requirements, which in LA essentially mandate steel and concrete construction for anything over 75’ tall.

Podiums often draw a lot of architectural criticism (first law of affordable housing – the more reviled it is, the better the job it’s doing at being affordable, right down to the ultimate rural affordable housing, the universally despised trailer park). As I’ve said before, this blog isn’t in the business of worrying about architecture. Podiums are great as a building form, and like any, they can be executed well or not so well.

In the scheme of housing, podiums are the last gasp of cost-effective wood-frame construction before you’re forced to incur the costs of steel and concrete frames. The first three options in this post can be constructed for around $60-$100 per square foot. With podiums, cost rise up to around $200/SF, so they’ll always be more expensive to build. The trade-off is usually taking a smaller unit, and perhaps being able to save on transportation. Of course, after the building capital costs have been paid off and the units start to filter, rents can fall in older buildings.

High-rises cost considerably more, around $400-$500/SF, which is why affordable housing solutions that depend on them are a bad idea when there’s enough room for the four cheaper options presented here. High-rises still play an important role, though, because they satisfy luxury demand and prevent it from bidding up prices for low-rise and mid-rise construction. That’s why we should allow construction of (unsubsidized) market-rate high-rises.

Fortunately, LA is a huge region, and we have plenty of space to grow. We can build all the housing we need without needing high-rises for a long, long time.

Where should they be built? Anywhere on the Westside, much of Southbay, parts of the Valley, the San Gabriel Valley, San Bernardino, and Riverside.

Do the Math

Recent estimates have put LA County’s deficit of affordable housing units at about 500,000. Population growth probably requires somewhere around 30,000 units per year, so let’s round that up to 50,000 per year (on the assumption that more affordable housing would increase population growth).

So, if we could build 100,000 housing units per year for the next 10 years, we’d be getting back on track. That may seem like a daunting task, but if you break it down, I think it’s achievable. Maybe it looks something like this, every year:

• 10,000 SFRs (basically Antelope Valley & Santa Clarita)
• 20,000 ADUs
• 30,000 dingbat units (or 3,750 8-unit buildings per year)
• 35,000 podium units (or 350 100-unit buildings per year)
• 5,000 Cudahy lot units (or 333 15-unit buildings per year)

Aren’t these numbers a little audacious? Not really. This boils down to building 27 SFRs and 55 ADUs per day, along with about 10 dingbats, 1 podium, and 1 Cudahy lot redevelopment. This amount of construction might be a little jarring at first, just because we’ve adjusted to a slow growth level of construction. But technically, it’s trivial – does anyone really think it’s hard to find the capital, materials, and labor to build one podium per day? These targets are the equivalent of building about 275 housing units per day.

Realistically, you probably wouldn’t even have to hit those targets, because market-rate high-rises, non-profit developers, and institutional builders (like universities) will also be building units.

As with any product, the way you reduce costs is by standardizing the plans and the procedures for putting them together. In some future posts, we’ll take a look at how that can be done in the case of these housing types.