Sunday, November 16, 2014

How not to start a co-op: Gentrification at 1040 Folsom Street

One of the unfortunate side effects of the rising popularity of communal living among middle and upper income people is that certain types of housing, once thought to be gentrification-proof, are now on the front lines.

1040 Folsom Street in San Francisco is one such example.  Former a SRO (single room occupancy) residential hotel, the three story, 10,000 square foot building was gutted by a fire in 2011, displacing 90 residents.  The building, built in 1912, is subject to rent control regulations, which specifies that  displaced residents have the right to re-rent their rooms at the original price after repairs are made. 

The building owner instead master-leased the property to The Negev, a property management startup that converted the building into a high-end co-op targeted towards tech workers.  Rent was doubled from $634 to $1250 for a room.  The Negev also reduced the number of rooms to 40, using the additional space for bars, game rooms, theaters, and other recreational facilities. 

While The Negev attempted to buy out the former residents, not all of them took the $500 buyout offer.  The Negev proceeded to rent out the entire building anyway.  About a month after the new residents had moved in, some of the old residents noticed, and filed complaints and lawsuits

You can look up complaints via San Francisco's Property Information Map - just enter 1040 Folsom Street.

At this point, the situation looks bad all around - not only is the building essentially double-booked, but as the number of bedrooms has decreased, even if it were vacated, it would be impossible to rehouse all the old residents. 

Broader Implications
While The Negev and other similar tech co-ops have proven that there is a market for this kind of housing, the displacement of low-income residents is a bad way to do it, and likely to lead to a backlash.  Currently, SF has regulations that limit conversion of residential buildings to other uses, I can foresee regulations prohibiting the conversion of bedrooms into non-bedroom space.

McMansions - a potential alternative?
The size of 1040 Folsom is similar to about 2 or 3 McMansions.  These types of buildings are quite common throughout suburbia, and a precedent has been established via Cupertino's Rainbow Mansion, a 5,000 square foot house in Silicon Valley. 

The conversion of large houses to communal living is already common in immigrant-heavy neighborhoods of the South Bay (just look for streets where the number of parked cars approximate 5-10 per house).  However, as zoning currently makes this illegal, and immigrants lack political capital, this model has been kept under the radar.  Tech companies, on the other hand, may be more willing and able to take the risks required to disrupt suburbia in a more visible way. 

Saturday, September 20, 2014

One of my other projects, the High Speed Rail Board Game

Aside from researching cooperative housing, I've also made a series of rail maps, including the California Rail Map, the Northeast U.S. Rail Map, and the  U.S. High Speed Rail Map.  Based on the latter is the High Speed Rail Game, a fast, fun, and educational game for 2 to 6 players where players act as politicians and make deals to get their voters connected.

https://www.kickstarter.com/projects/1700980409/high-speed-rail-board-game

The game's designed to be simple to learn and play, and is fun for both housemates and experienced gamers. 
  • Only 1 page of rules.
  • Sets up in 1 minute: just shuffle the cards and go.
  • All math limited to single digit numbers.
  • Just four types of tiles.
I'm currently fundraising for a first print run on Kickstarter, you can get a hard copy for as low as $15, shipping included within the US.  Details are at https://www.kickstarter.com/projects/1700980409/high-speed-rail-board-game

Thursday, July 3, 2014

34 unit "CoLiving" on Octavia in SF

Build Inc has released plans for its proposed 34-unit CoLiving building on Octavia Boulevard in San Francisco. 

174 square foot Residential Suites
The project features 34 residential suites28 of them are 174 sf standard units and 6 are 273 sf wheelchair accessible units.  The regular units feature:
- a 10'x10' bedroom / living room
- a 9'x3' bathroom with storage above
- a 9' long kitchen

Rooftop and 5th floor common space
The site presently has a community garden, that will be relocated to the roof.   Just below it on  the 5th floor there will be two common areas (kitchen and dining on one side, living room on the other), each around 700 sf.  This is an unusual location for common space, as residents would not pass by the space on their way home.  However, the choice to locate it at the top floor does ensure more sunlight and closer access to the garden.  It will be interesting to see if residents end up using these 5th floor and roof spaces often, or if they just hang out in cafe and parklet on the ground level. 

By the numbers
- The site is 120' long and about 25' deep, for a total area of around 3000 square feet.
- The building appears to have a total of 15,000 square feet.  Of this, roughly 2,000 looks like retail and the other 13,000 residential. 
- The 34 units provide a total of 6,510 sf rentable space, which at the developer's estimated rent of $1,350 per unit per month, would bring in around $550,000 of rental income per year. As this is classified as group housing, no below market rate units are required.
- 34 residents makes a good community size, many successful communities are about this large.
- Private space is about 50% of total residential area.
- Bedrooms are about 26% of total residential area.  This is comparable to similarly sized Berkeley student co-ops, however, Build Inc's project has less common rooms and instead opts to provide each bedroom its own bath and kitchen.

Compared to a traditional apartment building
An identical site next door has a 22-unit apartment building proposed.   This one features 10 two-bedroom units (avg 600 sf) and 12 studios (avg. 271 sf), for a total of 32 bedrooms and 9,252 sf rentable space.
As such, the population density of Build Inc's CoLiving project will probably turn out to be similar to that of a traditional apartment building, and possibly less - because in SF, people will use living rooms as bedrooms.
- Assuming that studios will rent for $2000 and two-bedrooms for $3500, and 20% of the units are below market rate units that go for half price, the traditional apartment will bring in around $600,000 of rental income per year.  

Different, but not dramatically more profitable or denser
It appears that CoLiving as designed will have slightly less revenue than a traditional building, though the modular suites (to be built offsite) may bring enough time and cost savings to give it comparable profitability.  The need to provide all those bathrooms and kitchens eats up a lot of space. 

What's next?  10-bedroom full floor apartments?
While a departure from the typical apartment building with it's mix of one and two bedrooms, Build Inc's CoLiving fails to realize significant space efficiencies.  Understandably, professionals paying $1,350 a month probably don't want to share bathrooms with 34 people.  However, a smaller community size, of perhaps 10 people, might make it more palatable.

A 10-bedroom apartment could easily fit on this size of site, and would be more efficient than either the CoLiving or a traditional apartment as it would not need as many hallways on each floor.  The popularity of old Victorian houses for group living suggests this could be a future model. 

Wednesday, May 21, 2014

Are intentional communities the new exclusionary zoning?

In the 20th century, people who were racist or classist would write zoning laws to keep certain other people from moving into their neighborhood.  Civil rights legislation has struck down most race-based discrimination, at least on paper, though not entirely in practice.  However, zoning codes that mandate minimum lot sizes, maximum densities, or maximum number of occupants continue to exclude people on economic grounds. 

Shared housing in theory is a workaround, as a group living together has more buying power.  However, at least in the Bay Area, where even shared housing spots are in short supply, the application and interview process done by existing residents can make it even harder for people who are not of a certain social class or culture to get housing. 

Unlike an apartment building manager, who is bound by housing laws that apply when separate apartments or SRO's are leased, someone seeking roommates has much greater discretion to choose who they want to live with - understandably. 

Housing wanted / housing offered ads often will list things such as
- favorite bands
- where people work
- food preferences
- politics
- emotional traits

Sometimes it's just things such as "Likes quiet" or "No drugs" but occassionally it goes into territory such as "Positively directed" or "World shifters".  Some of the highest profile communities such as The Embassy or the Sandbox House have explicit goals to be not just a place to eat and sleep but also a collaborative space for people to share ideas. 

In San Francisco, there are about 2 residents per house or apartment.  Last year, however, the city gained 10,600 residents but only 1,900 apartments.  As most new apartments are 1 or 2 bedroom, most of this increase is being absorbed by people doubling or tripling up. 

Will applying for housing eventually be like applying for college?
There is a potential that even as shared housing advocates work to remove exclusionary zoning barriers, they will create new forms of exclusion based on their member application and interview process.  I only know of two cases where there is member intake free of judgement by existing residents.  One is the Berkeley Student Cooperative, which has over 1,200 members in 20 houses averaging 30-60 people in size.  The other was a punk house. 

I'm not sure what a solution to this might be, as in a small (under 10 people) community, each person is a critical part.  But maybe this is one of those housing problems that is really part of a bigger societal problem, in this case, a widening gap between social classes.

Wednesday, January 22, 2014

The 10,000-apartment tech campus: what if companies provided on-site housing?

what 10,000 apartments on the Google headquarters might look like

Tech workers' impact on housing prices is a hot-button issue in the Bay Area.  The issue stems from a shortage of housing in Silicon Valley, which was originally research labs and electronics factories.  Now, software is dominant, and a lot more programmers can fit in the same space.  In fact, many don't need a desk at all. 

This has upended the city planners' calculations for balancing workspace with housing. The Valley lacks housing, especially the hip, trendy type of urban housing that young programmers love.  Tech workers to move to San Francisco and Oakland, creating waves of gentrification.

Building more housing is seen as the only long term fix to the housing crisis.  How much housing would a major tech company need, and what would it look like?

Let's use Google as an example.  Google employs 10,000 at its Mountain View headquarters.  Surprisingly, that number of apartments can fit on the parking lots and open spaces of the suburban campus.  Most would be in towers of 30 to 50 floors, with the rest in lower blocks lining the site. 

note: this is an academic exercise and is not actually being proposed

While this level of development is not allowed under current zoning and would require new infrastructure to even be physically possible, the density is similar to the Rincon Hill in downtown San Francisco.  Such a concentration of people would also create the critical mass to attract the trendy services and amenities that currently only San Francisco offers.    

This study assumes regular apartments, with an average of 800 square feet per family of 2 (400 square feet per resident).  It also assumes very limited parking (presumably folks would walk to work and take the Google Bus elsewhere).  Co-op style housing typically can get down to 200 square feet per resident, roughly double the efficiency of apartments.  That would still be a lot of housing in one spot though.

While Google does not have any plans for on-site housing that I know about, they have made some small investments in housing in Mountain View, most recently a 51-unit apartment complex.  But perhaps one day, an real downtown will be the ultimate tech job amenity...

See more at https://sites.google.com/site/techcampushousing/


Thursday, December 12, 2013

Tech communities - the business case, and potential side effects

Recently, tech communities such as The Embassy Network have been getting lots of press attention.  These may well be some of the first instances of modern upscale communal living- a significant development, as it could be the first step of the mainstreaming of communal living.

Communal living and the innovation adoption lifecycle

The adoption of new ideas or products often begins with "innovators" - typically people who are young, well educated, wealthy, and willing to take risks.  These folks have the cash and the capacity for risk to handle the inevitable challenges and failures of testing out new ideas. 

Once something starts to catch on, a larger number of "early adopters", who might have less wealth to risk but more social connections, spread the word to the majority of the population.

chart from Wikipedia user Multichill

Tech communities - just for some, or the start of a trend?

Software engineers and other tech workers certainly fit the description of innovators.  However, for all the hubbub, it's important to note that they did not invent modern communal living.  Students, religious communities, immigrants, queer people, and punks have all formed self-governing residential communities.  A few factors that work in their favor include:
  • Limited economic resources - group living is intrinsically cheaper
  • Geographically concentrated employment - it's easier to live together if everyone has reasonable commutes.
  • Sense of greater purpose - can help promote unity
  • Mostly unmarried population
  • Discrimination by larger society - leads to seeking of safety in numbers


Limited economic resources Geographically concentrated employment Sense of greater purpose

Mostly unmarried population Discrimination by larger society
Students


x
x

x

x



Religious communities

x



x



x

Immigrants

x

x

x



x

Queer people

x





x

x

Punks

x



x

x

x

Tech Workers



x

x

x




Tech workers are unique in that they actually have abundant cash.  However, the tech community has a lot in common with college students, and crucially, many tech workers are recent grads.  The "sense of purpose" factor is also important - at tech communities I've visited, there were a lot of startup and founder types, and no so many rank-and-file coders from large companies.

Tech communities - the next sharing app?

Housing's capital-intensive nature has limited the formation of large scale communities.  However, here is where the tech industry's capital-light approach could come in.  Similar to how startups like AirBnB or Lyft provide large amounts of short-term housing or transportation without having to own any rooms or cars themselves, a communal living startup could get started by master leasing houses and entire floors of apartment buildings. 

Affordability and inclusivity?

If it does scale up, there are several social issues on the horizon.  Currently, except for the Berkeley Student Cooperative, every community (of all types, not just tech communities) I've encountered has an extensive and very competitive application and interview process where existing residents choose new ones.

However, our entire system of rent control and fair housing is based on the idea that individuals and families individually lease or buy apartments from developers and landlords in a purely business transaction.

Unlike other groups that currently live communally on a large scale, most tech workers don't have to personally deal with gentrification or housing discrimination, and may lack knowledge on the subtleties of these issues.  At one tech community I visited, the residents were all white or Asian, and there were no children or senior citizens.  Policy, either at the community or government level, will be needed to avoid entire neighborhoods from turning into equivalent of an exclusive college or social club.

Dunbar's number revisited - why 70-80 people is the max size for a community.

When the question of how big a community should be, a number sometimes given as a maximum is 150.  This is Dunbar's number, a suggested limit to the number of people with whom one can maintain stable social relationships. 

In practice, unless the community is very isolated, 70-80 people is a better limit.  Why?  In addition to live-in residents, a community will have peripheral members that hang out at the house, such as former housemates, boarders, and residents' friends and romantic partners.  These peripheral members effectively double the size of the community.

In the Berkeley student co-ops, houses with 50-70 residents often have the strongest house cultures, while the two houses with 120-150 people are so large that residents don't know all their housemates. This pattern also appears at the Austin co-ops, and may have been an issue at Pacifico in Davis as well. 

It is worth noting that Dunbar's number was originally derived from pre-industrial farming villages, where the community involved not just living together, but working together.  Members of such a 150-person community would not have outside jobs or social contacts outside of the 150.