5 Types of Buildings You Can Build Instead of Another Luxury Condo/Rental Building
Multifamily developers love luxury towers. But strong demand for cheaper alternatives make it a good time to consider other options.
In 2011, NYC’s Housing and Preservation Department (HPD) put out an RFP to develop a small, unloved lot wedged between anonymous towers-in-parks in the Kip’s Bay area of Manhattan. The RFP, dubbed adAPT NYC, was the Bloomberg administration’s exploration into seeing if micro-apartments were a viable solution for housing future New Yorkers. Unique to the proposal was an exemption from the then-minimum 400 square foot dwelling-unit size requirement.
AdAPT got an amazing response. Teams included major developers like Jonathan Rose Companies and Durst, as well as notable architects like Rogers Stirk Harbour, Grimshaw, and HWKN. The 33 entries received were three times as many entries as any other similar RFP had ever garnered.
Why the big deal about the tiny apartments?
For one, it was a good PR play. Bloomberg was smitten with the micro-apartment idea, especially as it related to PlaNYC, an initiative designed to anticipate the needs of the city in the year 2030. His interest lead him to promote the hell out of the project, and the winning building, Carmel Place, would (and did) receive outsized attention for this little, 50 unit building.
But the other reason for its popularity was the intent of the project.
Significant, innovative, important, useful — these are adjectives seldom used when describing luxury condos and rentals. But adAPT was all of these things.
Developers had the chance to offer a new product marketed to a growing and hungry demographic (33% of New York City households are single person, yet little housing caters to them). Architects were challenged to make something great within the small spatial and budgetary constraints the project imposed.
While luxury buildings aren’t going anywhere anytime soon, I believe there’s space for different types of buildings — like adAPT — that are designed for demographics other than two-income couples who can afford $10,000/month for a one bedroom apartment. And with softening luxury condo and rental markets,* and housing affordability infernos ablaze throughout the country, it’s a great time to consider building something new, different, and important. Here are a few ideas for inspiration.**
1. Micro-micro apartments
Carmel Place was cool, but it didn’t go far enough. At the end of the day, the developers ended up with $2,300 studios. That might not be a crazy amount for a studio in the area — particularly for new construction — but it’s still a lot of money for most.
The problem is you can only make units so cheap when you’re building them with accessible kitchens and bathrooms.
Seattle offers a more viable approach with tiny, bare-bones private rooms, small or shared bathrooms, and one full kitchen for every eight private rooms. Single people need their money way more than they need space.
Another idea from San Francisco developer Panoramic Interests is micro-apartment buildings made up of stackable modular prefab modules. Each module contains an apartment that comes fully furnished from the factory. Importantly, these units conform to intermodal shipping container size, allowing them to be manufactured and shipped anywhere in the world — thereby freeing them from the costs and availability of local labor. (Disclaimer: Panoramic is a former client of mine.)
2. Passive Houses
Passive House is an ultra-rigorous building efficiency certification. Originally from Europe, the standard is becoming more popular stateside. Passive House works by creating a near-perfect thermal envelope around a building through a combination of high performance insulation and windows (think of it like a thermos). All indoor airflow is managed by machines that keep air fresh and regulate temperature. Combined with passive heating and cooling design, and Passive House certified buildings will put the best LEED buildings to shame in terms of energy efficiency, health, and comfort.
Having the Passive House efficiency standard is like having a Patek Philippe watch — to most, it looks like a normal building/watch, but for the cognizanti, it denotes great taste and affluence.
There’s a Passive House building boom underway (a friend said there are 1,000 passive units in the works in NYC alone), but many projects are destined for luxury housing.
Far more interesting and important are Passive Houses for the masses like this 274-unit affordable building in East New York by Dattner (pictured). In addition to a variety of ultra-rigorous sustainability features, the building will include “satellite campus for CUNY Kingsborough Community College, a new performing arts center run by ARTS East New York, a new food manufacturing incubator, and a social services center run by the Cypress Hills Local Development Corporation,” according to Curbed.
3. Adaptive reuse office spaces
Zoning issues aside, one of the more exciting prospects in housing is adapting existing, underutilized commercial properties for residential purposes.
The DC area is a hotbed of activity for this sort of thing. Firms like e-lofts are taking languishing commercial properties and modifying them for residential use.
As the role of large office spaces is continually undercut by coworking, leaner workforces, and remote working, the inventory of unused office spaces will grow, potentially adding significant numbers of spaces ready for residential conversion.
4. Purpose-built coliving
Coliving operators like Common, Ollie, WeLive, and Starcity typically work by master-leasing a building from that building’s owner. They then manage, decorate, furnish, and add a bunch of layers that optimize the building for convenience and sharing.
But many of the coliving buildings to date have been retrofits of existing properties, or the coliving layer has been added onto new buildings not designed specifically for coliving. This has perverted the model to some extent: adding the coliving operational layer on top of conventionally designed units — while making it nominally more attractive — mostly serves to make the units extremely expensive.
The way to do coliving right is design purpose-built coliving buildings with small units and shared amenities. Ollies upcoming Northern Boulevard building should go a long way toward proving this notion (or disproving it).
Fourteen of the building’s 43 floors are built specifically to be used for coliving. Two and three bedroom suites lack living rooms, increasing bed density and rent roll. This loss of private shared space is offset by twenty-thousand square feet of amenity spaces shared by the entire building.
5. Urban Villages for families
Cohousing tends to be in the suburbs, largely because it’s tough to secure a number of adjoining homes in an urban, multifamily building.
Our Urban Village Cohousing out of Vancouver has a solution: collect a group of people who pre-purchase units from a developer during a building’s planning phase. While each unit is owned individually, the group would be able to influence the building’s design to include things like communal gardens and amenity spaces for things like child care. The developer could benefit by getting early revenue. Unlike coliving, which is squarely aimed at more transient millennial renters, OUVC units are owned and designed for the long haul. (At last check, OUVC found a developer.)
*For the sake of economy, I’m referring to luxury markets in NYC, but many of these trends apply to other cities such as SF, LA, Boston, and DC.
**Yeah, I know it’s not that simple. Your site and access to money are constrained by innumerable forces outside your control. I also get that you might be still making money building boring, luxury buildings (you probably wouldn’t be making them if you weren’t). And it’s impossible to cross shop luxury condo towers with converted office buildings…relax, it’s just a blog post.
