The Life of NOAH: The Turbulent Tale of Naturally Occurring Affordable Housing

Seattle’s congregate housing, which flourished from 2009–2014, presents a compelling case study and valuable lessons in how to develop market rate affordable housing.

A long time ago (2009), in a city far, far away (Seattle), there lived a clever developer named Calhoun. Calhoun wanted to build something and noticed a zoning designation called “congregate housing.”

Congregate housing didn’t need to abide by the normal, costly building constraints of normal multifamily developments. Building units didn’t need to have full, ADA-compliant bathrooms and kitchens. They didn’t need large living spaces. In fact, congregate building units weren’t apartments at all. They were “sleeping rooms,” also known as micro-units. Micro-units were sub-200 square foot, private rooms with small bathrooms and kitchenettes. Every eight micro-units required one shared kitchen and some common space, but the overall square foot per bed was very modest.

The combination of small units, fewer full baths and kitchens, and no elevators (most were low and mid-rise) reduced construction costs and provided more rentable beds per buildable square foot. This made Calhoun very happy, and they started building lots of congregate buildings, dubbing them aPodments.*

But it wasn’t just Calhoun who was happy. Rents for a furnished micro-unit could be as low as $350, including utilities. The majority rented somewhere around $800.

Housing is typically made affordable by locating it in cheap, far-out locations. These locations necessitate long commutes, whose time burden helps perpetuate cycles of underemployment and poverty. But aPodments were centrally located along transit corridors.

The net result was convenient, clean, basic housing that was affordable for someone making $12–14/hour.

They were a hit, and soon other developers followed. By 2013, there were 2,802 micro-units in Seattle — many were congregate housing. Others were small efficiency dwelling units (SEDUs), a unit type that will be discussed momentarily.

Why Seattle’s micros were a big deal

Cost-burden, as it relates to housing, means that a household spends in excess of 30% their income on housing. Nationally, around 48% of American renters are cost-burdened. Seattle is a modest 41% for millennials, who make up the bulk of renters. Miami, at 64%, is the national champ.

Whether 40% or 60%, massive numbers of people are cost burdened with profound personal and global consequences. Some have speculated that a lack of affordable housing —largely stemming from land use restrictions — costs the U.S. economy around $1.5 trillion a year.

But too often, affordable housing is used interchangeably with subsidized housing. Subsidized affordable housing is great if you can get it, but in NYC, for example, there are 1,000 applicants for every affordable unit that comes online.

Then there is the source of the subsidies. Someone has to pay. Often, it’s the taxpayers directly in the form of vouchers or tax breaks to developers. Other times, the costs are pushed to market-rate rentals that share a building with inclusionary affordable units.

But Seattle micros had achieved the seemingly impossible feat of providing naturally occurring affordable housing (NOAH).

No, these micro-units weren’t for everyone. They were small and basic AF. But considering 58% of Seattle’s population is unmarried, and 11% are 18–24 (around 78,000 people), they had appeal for many.

What killed Seattle’s congregate housing?

From the beginning, the congregate housing faced opposition. Neighbors complained the congregate buildings had not undergone sufficient community board reviews. They said the micro-units were too small and unsafe for their occupants. They said the buildings didn’t have enough parking. They said the units would appeal to transients populations who’d compromise the character of good neighborhoods. None of these claims were backed by evidence. In short, neighbors said congregate buildings didn’t belong in their backyards.

In 2014, the outcry was codified with new land use restrictions. Seattle’s Department of Planning and Development passed regulation that pushed congregate housing out of residential neighborhoods into “Neighborhood Commercial Zones.” NCZs were mixed-use areas designated for heavy pedestrian traffic, where buildings had to be six stories or taller. This height necessitated elevators, which increased construction costs. Elevators also made the upper bedrooms wheelchair accessible, requiring larger, ADA-compliant units that reduced building density. These new restrictions completely changed the calculus of congregate housing development, and construction fell off a cliff.

Image via Sightline Institute

Under the new micro-zoning laws, low and midrise SEDU buildings were still permitted, and, as the above graph shows, SEDU permits jumped when congregate permits plummeted. SEDUs were better than nothing, but they were bigger and more expensive —generally, sized around 300 square feet and renting for $1,200 and more.

Seattle architect David Neiman estimates that 1,300 SEDU renters (the number of SEDU permits in 2015) pay an additional $253/month solely because of the larger size requirements versus congregate micro-units. This premium over a year is about the same amount as a year’s tuition at a local community college.

The Lesson

Given the unfortunate end of Seattle’s micro-units, it might be tough to derive any valuable lessons. But I visited Calhoun’s site and noticed that there are still rooms available in the tony Capitol Hill area starting at $790.00 in a building built in 2013. While Calhoun — or anyone else — might be hard pressed to build new buildings with units at this price, affordable units still exist from the era when they could.

So the lesson might be this: it’s better to ask forgiveness than permission. Look for zoning loopholes and exploit them before anyone notices. You might get stopped, but you might do some good along the way.

Many, many thanks to David Neiman of Neiman Taber Architects.

*The original aPodments were classified as “boarding houses,” though, according to Neiman, they had the functional value of congregate housing.