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.   

400-person group housing complex planned in San Francisco

In the last couple years, "micro-apartments", otherwise known as small studio apartments of around 300 square feet, have been proposed and built in San Francisco.  In contrast, a typical small 1-bedroom apartment comes in at about 500-600 square feet and a 2-bedroom apartment is around 800 square feet. 

Now, developer Build Inc. is proposing a 400 person group housing complex at 1532 Harrison Street in the South of Market area of San Francisco.  The facility layout is as follows:

- 1 or 2 beds in a bedroom suite.  Each bedroom suite is like a hotel room, but has a mini-kitchen.  The ktichen is a big deal, more on why further down.
- 9 bedroom suites in a "house". (9-18 people per house)
- 10 "houses" in each building. (90-180 people per building)
- 3 buildings (Total of 235-470 people).

Below is an image of a typical "house" from SocketSite. 

A few thoughts on the economics of this project:

- This building is significantly wider than your typical apartment building.  Building codes require windows in bedrooms and living rooms.  This is significant as often the number of rooms in a building is not limited by the size of the land, but the width of the land.  

Interestingly, the wide floorplate of this kind of group housing layout is very similar to that of mid-20th century glass box office towers.  

- Group housing such as 1532 Harrison virtually eliminates corridors, which cost money to build but can't be sold/rented.

- The real biggie is parking.  Outside of downtown, San Francisco zoning usually requires one parking space per apartment, but requires none for group housing.  This is a San Francisco only thing - in places like Oakland and Berkeley, every two bedrooms in a group housing building requires a parking space.  Parking spaces take up 300 square feet each - the same size as a studio apartment, but a parking space only rents for $200-400 a month, while a studio apartment can go for $2000.
Under SF zoning, 1532 Harrison isn't group housing though, as SF zoning defines dwelling units as "A room or suite of two or more rooms that is designed for, or is occupied by, one family doing its own cooking therein and having only one kitchen".  Those mini-kitchens, though small, are still kitchens.  So this is really a building of studio apartments.  Nonetheless, it is still an unusual building, and as such, Build Inc. has had to apply for a conditional use permit in order to not provide parking.  (edit 12/8/13: parking appears not to be require for this area).

Operational issues, or why kitchens are critical:

- No information so far on how 1532 Harrison will be operated.  Will rooms be leased/sold individually, or will each of the 9-room "houses" be leased/sold to a group?  Since each bedroom suite has its own mini-kitchen, under fair housing regulations, each is its own housing unit.  Unlike 9 people sharing a large single family house, residents of one of these 9-room "houses" would not be able to evict someone in their house if they didn't like them.  The big shared living room and kitchen would effectively be treated as an apartment building community room and lobby, even though in reality the role would be different.

- The big difference between this and the classic residential hotel is the division of the building into "houses" of 9 bedroom suites.  This creates communities of manageable size within the larger community.

Kitchens, Parking, and Resident Selection - a summary for most parts of San Francisco:

Individual mini-kitchens + large shared kitchen

• 1 parking space required per kitchen. (there's some philosophical epiphany here...)
• Anyone can move into a bedroom suite.

Shared Kitchen Only

• No parking required in San Francisco.
• Residents sharing the kitchen have some discretion over who else lives in a bedroom that is connected to their kitchen.

 Given the controversy surrounding these types of buildings, it will be interesting to see if 1532 Harrison is able to get the conditional use permit for not having parking.  Without the CUP, either half the building would be a parking garage, or the mini-kitchens in each bedroom suite would have to go. 

December 8, 2013 update: clarification on the parking issue and the potential use as student housing:
- It appears that parking requirements for this particular area allow zero parking spaces even if the building has studio units with kitchens.
- Comments on SocketSite suggest that this building may be marketed as student housing for CCA, Academy of Art, or other nearby colleges that currently have more students than dorm beds.  Students have been one of the largest users of shared housing historically, more thoughts on this in a future post.

Berkeley/Oakland port and highway air pollution map

"Don't cut corners on the location, as the rest you can fix up later when you have the money." - that was the advice I received from folks who in search of cheap land, had built a cohousing complex next to the BART elevated tracks a few decades ago.

Whereas those treating housing as a commodity can easily trade up to a better neighborhood, when establishing a community find it harder to move.  As folks have expressed interest in purchasing or building new housing, transportation access has been mentioned as something not to skimp on.

The flip side to transport is pollution.  Oakland is one of the largest container ports in the world and is full of freeways.

Air Pollution Hazards: Cars, Trucks, and Container Ships.
Freeway health risks are well known, with the first block downwind being extremely hazardous and problems persisting for another 700-1500' depending on whether the freeway is elevated.

The effects of port pollution from the container ships is a bit harder to track down, but based on public health asthma and cancer data it appears to be most severe in the first couple of miles, with effects as far as 20 miles away.  In areas near the ports, pollution can be over 10 times the regional average.

Ships are basically barely-regulated ocean-going power plants, spewing sulfur dioxide, particulates, and other pollutants in quantities far beyond what is allowed for vehicles registered in the USA.

 Click map to enlarge.  Heavier lines are elevated freeways.  

Fight for cleaner air, but for now, build elsewhere.
Many of these heavily polluted areas in Emeryville, West Oakland, Chinatown, and Downtown already are home to thousands of residents, and port and freeway air pollution have been a major environmental justice issue.  In recent years, community activists have demanded and won funding from the Port to upgrade trucks to reduce diesel pollution.

The Port has goals to reduce total pollution by 85%, though it expects to fall short on controlling ship pollution (only a 67% reduction is projected) as Oakland and California have little ability to regulate the international shipping industry. 

As a result, even though the pollution has decreased and will continue to decrease, it is still much worse in these areas than the rest of the region.  Therefore, in the near term, it would not be prudent to create new housing in this area and subject more people to risk.

Driving further out is not the solution.
While the origins of suburban housing came from an era of even worse industrial pollution, relocating to the suburbs may not necessarily lead to better health as drivers and bus passengers are subject to heavy air pollution while on a freeway.  Until shipping gets cleaner, the best plan may be to avoid the areas closest to the docks while remaining near BART stations. 

Could Oakland remove its freeways like San Francisco did?
In the 1990s and 2000s, San Francisco removed a couple miles of downtown freeways, clearing up dozens of blocks for housing and making several neighborhoods much more liveable.  Mass transit, biking, and trip reduction have made this possible without major traffic problems.  Right now, roughly 25% of Oakland is within the downwind zone of a freeway - could it do the same?

More Resources:

- Bay Area Air Quality Management District CARE Program
- Port of Oakland Emissions Inventory
- Port of Oakland Maritime Air Quality Improvement Program
- Pollution, health, and avoidance behavior: Evidence from the Ports of Los Angeles
- Southern California Particle Center