America Needs Small Apartment Buildings. Nobody Builds Them

[M II A II R II K]

America Needs Small Apartment Buildings. Nobody Builds Them


March 30, 2017

By Patrick Clark

Read More: https://www.bloomberg.com/news/artic...dy-builds-them

PDF Paper: http://www.enterprisecommunity.org/d...5303&nid=19423

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Small buildings are a good way to add density without compromising the character of quiet, single-family districts. They also provide a convenient way for older homeowners to downsize without leaving their neighborhoods. But the best reason is that smaller apartment buildings are often cheaper for renters.

- According to new research from Enterprise Community Partners, an affordable housing nonprofit, and the University of Southern California, apartment buildings with between two and nine units offer the lowest prices available to U.S. renters. --- The paper categorizes buildings with between two and 49 apartments as “small and medium multifamily housing”—a grouping that makes up 54 percent of the U.S. rental stock. As noted, America isn’t building as much of this kind of housing as it used to. Small- and medium-size apartment complexes account for a quarter of existing units built in the 1970s and 1980s, according to the report. Since 1990, though, the category has accounted for just 15 percent of new housing stock.

- There are a few reasons for that shift, according to Andrew Jakabovics, vice president for policy development at Enterprise Community Partners and one of the authors of the paper. --- Zoning rules have developed to favor single-family construction, making it harder to win approval for larger projects. There are regulatory costs to building multifamily housing, and developers that go through all the trouble to win approvals want to build more than just a few apartments. In general, there are economies of scale in operating larger complexes. If two units are vacant in an 8-unit building, the landlord is missing out on a quarter of her potential income. In a 100-apartment high-rise, a couple of vacancies are less of a big thing.

- Those operating efficiencies also make lenders look more favorably on larger apartments, Jakabovics said. It’s a virtuous circle for ever-bigger residential developments, though not so much for smaller ones. Seeing why builders have abandoned the small apartment complex is easier than figuring out how to rekindle interest in the concept. Rewriting zoning codes to favor the missing middle would be a good start, Jakabovics said. The flip side is that if builders don’t develop more small- and medium-sized buildings, an important source of unsubsidized, affordable housing may dry up. Rental units tend to get cheaper as they age. The trend in recent decades toward single-family homes and high-rise apartment buildings means that there are fewer smaller apartment buildings to age into affordability.

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[ChargerCarl]

Upzone single family neighborhoods.

[the urban politician]

In Chicago there are tons of small apartment buildings that are nonconforming to their current zoning. But when you try to get permits to fix them up, the burden is on you to prove that the number of apartments are legal. If the zoning supervisor is having a bad day and decides to be an asshat, you're out of luck and you have to eliminate apartments. All this while the city's population is stagnant or declining. Makes no sense

[pdxtex]

Originally Posted by the urban politician

In Chicago there are tons of small apartment buildings that are nonconforming to their current zoning. But when you try to get permits to fix them up, the burden is on you to prove that the number of apartments are legal. If the zoning supervisor is having a bad day and decides to be an asshat, you're out of luck and you have to eliminate apartments. All this while the city's population is stagnant or declining. Makes no sense

eliminate? as in tear down??

[mrsmartman]

Small apartments tend to be historical tenements which have become obsolete over the years. Very often, the existence of ventilation shafts are required by law to protect the tenants.

[ChargerCarl]

Originally Posted by mrsmartman

Small apartments tend to be historical tenements which have become obsolete over the years. Very often, the existence of ventilation shafts are required by law to protect the tenants.

Maybe in New York City, not in LA.

Then again you might be trolling. I have no idea with you.

[M II A II R II K]

No one has to mak modifications to townhouses that are rented off to multiple tenants

[the urban politician]

Originally Posted by mrsmartman

Small apartments tend to be historical tenements which have become obsolete over the years. Very often, the existence of ventilation shafts are required by law to protect the tenants.

Are you kidding me? I feel like this post was written in 1934

[the urban politician]

Originally Posted by pdxtex

eliminate? as in tear down??

No, as in convert to a lower density structure, sometimes even a SFH.

I'm running into that issue right now

[Pedestrian]

In San Francisco there was a whole subsector of the market called "Richmond Specials" being built by a homegrown cabal of SF-born/bred builders on infill lots. Seems like these folks were most active during the dot-com heyday around the turn of the millennium.

But there's a much bigger sector of what is locally called "flats" that are essentially Victorian or Edwardian (usually) 2 or 3-story homes that have been subdivided into rental units, one per floor and possibly one in the basement for a total of 3-4 per building.

Here are examples. Note the 2 doorways in each building where originally there would certainly have been one large entrance door. Sometimes the doors visible between units will lead to a smaller lower level unit and often the garage will have been converted into living space for such a unit.


https://www.google.com/search?q=SF+M...8Imin2vrRns_M:

Trust me when I say these are not "tenements"--many people prefer them to other types of living units. Most have 2 or more bedrooms and rent for upwards of $3000/month.

[10023]

The ADA and other rules make this almost impossible.

For example I'm sure the SF flats shown above would be illegal to build from scratch today, without the pre-existing historic structure.

[eschaton]

While Pittsburgh's new apartment structures are mostly on the big size, there are some smaller ones I am aware of

12-unit finished last year.
15-unit finished last year.
15-unit finished in 2013.
12-unit finished last year.

I don't regularly track apartment buildings which have less than 10 units, because it's too much work. Very little is being built in terms of new buildings between 4-10 units, but Pittsburgh has a lot of existing buildings in this range - mostly due to subdivided grand old houses, as during the late 19th/early 20th century Pittsburgh was a rowhouse city. New 2-3 unit structures are still being built, but these are mostly as part of mixed-income projects in formerly blighted neighborhoods.

[hipster duck]

America needs small apartments? If only real estate wasn't immobile, you guys could trade with us.

[sbarn]

Originally Posted by 10023

The ADA and other rules make this almost impossible.

For example I'm sure the SF flats shown above would be illegal to build from scratch today, without the pre-existing historic structure.

ADA requirements make small developments tricky but not impossible. Typically in smaller developments only one unit needs to be accessible (required number based on percentage of units with a minimum of one). In a small development with no elevator, if you have a ground floor accessible unit, this requirement has been satisfied.

Small infill developments are actually very common in New York, but they typically fly under the radar. A few examples:

[xzmattzx]

They're building tons (relatively speaking) of small 3- and 4-story apartment buildings in Newark, Delaware. There's a housing shortage for college students and single-family homes aren't doing the job.

[scalziand]

Boston is building a decent number of small number of apartment unit infills too. ArchBoston even has a dedicated thread for all the small infill developments.
South Boston Infill and Small Projects

[mhays]

The ADA has a cutoff. I don't know where it is, but the examples used as exceptions seem to be around six units.

In my area we have a lot of buildings in the 20-50-unit range that do have elevators but often have little or no parking. Not as many that I recall that are much smaller unless they have separate entries and don't need elevators.

[mrsmartman]

Originally Posted by sbarn

ADA requirements make small developments tricky but not impossible. Typically in smaller developments only one unit needs to be accessible (required number based on percentage of units with a minimum of one). In a small development with no elevator, if you have a ground floor accessible unit, this requirement has been satisfied.

Are the ground floor accessible units required to be residential? Are these buildings typically built for sale?

[Pedestrian]

Originally Posted by mrsmartman

Are the ground floor accessible units required to be residential? Are these buildings typically built for sale?

I would say most of the buildings of that size that have recently been built in SF have been for-sale condos, not rental units which is why I didn't post any examples. The trouble is that the new construction rental world is now the province of giant companies like the big REITs such as Avalon Bay and Equity Residential that just aren't interested in buildings with under 30 or even 50 units. And the individual landlords (or family businesses) that own most smaller buildings can't really do new construction.

[eschaton]

I think it's important to note where small apartment units are built in the U.S. context - essentially only where there's a relatively small parcel of land in an area which is zoned to allow for multifamily housing. Typically that means either replacing scattered vacant lots in a formerly semi-blighted area which has gentrified, or replacing the odd low-slung commercial building or parking lot within a traditional commercial corridor.

You typically don't see them, however, being built where there is say a full block of developable space available. If zoning allows, developers will build as densely as the market can allow, which could mean anything from a stick construction lowrise apartments to a steel-framed highrise - either way, you're looking at a building which has 100 units at minimum. On the other hand, they cannot be built as infill within areas zoned for single-family housing. Thus mini-apartments occupy a certain niche, and once the old, moderate density neighborhoods have been fully built out there's relatively little room for them.