A group of designers and architects in the HKS San Francisco office is looking to solve one of California’s biggest crises: the housing shortage.
Architects are generally thought of as “problem solvers,” but that label is often applied to our typical sphere of influence: design problems, not complex societal issues. And that, in and of itself, is a problem.
Architects and designers need to find ways to help solve our massive housing shortage beyond designing the most efficient box and our routine problem-solving methods, like value engineering solutions. Understanding and addressing the underlying issues helps us think bigger.
There is no place in America in which the housing shortage is more acute than the place I call home. In mid-2017, California’s housing “issue” started being referred to as a housing crisis. In a state with a great economy and job growth, housing is scarce. In fall 2018, Governor Gavin Newsom set a target to build 3.5 million homes within five years to pull us out of the crisis.
In its 2018 housing inventory report, the San Francisco Planning Department stated the city produced fewer than 3,000 units, far from the 5,000 unit per year goal set by Mayor Ed Lee in 2017. If San Francisco, one of the country’s most progressive cities and one of the state’s largest, is struggling to build 5,000 homes per year, how will we ever build enough housing to meet demand?
Unemployment is low and California has the fifth-largest economy in the world. So why can’t developers afford to build?
A group of us in the HKS San Francisco office wanted to find out. We were fresh off a project that had been shelved deep into the Design Development phase because the developer could no longer “get the project to pencil out.” There is no disappointment quite like the feeling of archiving an unfinished drawing set, along with the personal investment of time, energy and emotion. In the context of this unfortunate project experience, we were awarded an HKS IDEA Fellowship, an internal, year-long design research grant based on a pressing question: how we can make multi-family housing smarter and more economical to build by design?
We began with a deep study on why many California housing projects are not penciling and learned there are two major stumbling blocks to development: heavy building regulations and rapidly rising construction costs.
Regulation and delays at a city and state review level contribute to the time and eventually the cost of development.
Laws that are unique to our state, like the California Environmental Quality Act (CEQA) were written with the best intentions: to protect the environment. But it also contributes to an expensive, lengthy and burdensome approval process. Because it is possible for anyone to raise objections to a project during the 30 — 60-day public comment period, project opponents frequently abuse the CEQA process to stall progress.
Rapidly Rising Constructing Costs
According to JLL Research’s 2017 Construction Outlook, construction costs in the Bay Area are second only to New York City. This can be traced to many causes including a skilled labor shortage, lack of advancement in construction technology, materials price escalation, impacts of trade and tariff policies, and the rising cost of labor.
Construction is one of the largest sectors of the global economy, but it lags well behind other sectors, including manufacturing, retail and agriculture, in relation to productivity and technological advancement (McKinsey Global Institute, 2017). Productivity in other sectors is increasing while remaining flat in the construction industry.
Labor makes up almost 25% of the total cost to build a project, a figure that is exponentially more than design fees, and exceeds all soft costs combined – sometimes even more than the cost of land – and the ideal place to try to save money through better design.
So now that we better understand two of the major factors that influence the cost of a building a project, let’s get back to our question: How can architects influence the housing crisis through design and construction?
Four strategies emerged:
We’re looking into developing a computational tool that will allow us to do fast, iterative studies of planning module test fits on a construction site, taking into consideration set-backs and height limits. And while it is a promising tool, it’s somewhat limited in its impact to reducing overall project cost.
Modular Case Studies
We conducted a survey of existing companies with modular, pre-fab or industrialized construction offerings, and studied how we might use them as design tools. Among many things, this process helped us begin to understand the drivers for module size: transportation to the job site. One company we visted uses a module of 16’x12’x72’ – because it’s the largest load that can be transported on a California highway without an escort. Modular building is a burgeoning field, and developing a resource catalog for designers to source appropriate options adds value for our clients and project teams.
After conducting deep research on modular construction, we experimented by overlaying a modular grid on several projects our studio had already designed – an eye-opening exercise that showed us what would happen if we re-designed them with modules from the ground-up. This demonstrated that we could create a more deliberate and efficient design, though one that varies from the average unit sizes driven by our client’s proformas.
Policy and Legislation
Public policy and housing legislation impacts our work and our collective ability to get projects built. California’s SB 35 became law in 2018 and was designed to streamline the permitting process and promote development, with associated societal issues woven into the legislation, including inclusionary housing mandates (affordable and low-income housing) and paying workers prevailing wages, driven by union lobbyists.
Another contributing factor to the housing crisis is public perception of housing density. SB 50, another high-profile assembly bill, would have made it easier for developers to build higher density developments close to transit hubs. The bill’s author cited higher density, transit-oriented development as both affordable and sustainable development. Opponents cited concerns including ill-controlled growth, fear of increased traffic and lack of local control. SB 50 was blocked in committee amid conflicting concerns of gentrification on one side, and negative impacts to existing property values on the other. The societal tug-of-war between Not In My Backyard (NIMBY) and Yes In My Backyard (YIMBY) factions is another inherent hurdle for housing development. Understanding trends in policy and laws in place to incentivize housing development is key for architects and designers.
As construction costs skyrocket and development is frequently delayed by financing, architects must search for ways to influence projects through design while engaging in regulatory and public policy debate. Tapping into a rapidly developing industry of modular and off-site construction to streamline the construction process, reduce labor costs and shorten construction durations is a step in the right direction toward tackling California’s housing shortage.
Modular’s benefits are showing promise on the labor front as well: the Carpenters Union is working in modular factories and embracing the advancement of construction technology. Through hiring practices, they’re affecting social change by training factory construction workers who are typically outside the mainstream construction worker pool – particularly minorities and women. Creating jobs in neighborhoods close to where workers live rather than construction workers commuting long hours to a job site is also more sustainable.