Design Review Update Will Make Housing More Expensive

The City is currently considering changes to the design review process. In short, creating a square footage threshold for design review is a good idea and something we’ve been asking for a long time. In fact, when the fight over microhousing was about whether it ought to go through design review, we argued that since the overall size of a project was the only actual “impact” on a neighborhood in terms of design, square footage made more sense that unit count. The City’s latest proposal makes this shift. But as you’ll see in our letter below, that’s about all that is encouraging here. This was put together with significant help from people who know how to build housing and design review process, especially David Neiman.

———————

June 12, 2017

Dear Mr. Podowski,

We appreciate the opportunity to share our thoughts on the proposed changes to the City’s design review process. It’s important to state up front that we feel that overall, the design review process has ceased to become, as stated on the City’s website, “one of the tools we use to create a better city,” but rather a costly and onerous process that raises the price of housing for consumers. Design review should add value to a project, but too often it adds time and costs while reducing the number of housing units created. We think the proposal needs significant changes to promote more housing production, not less.

The best part of the proposal is using square footage as the threshold for requiring design review. This will put all townhouse and row house projects on equal footing. But, it is critical to note, that while the thresholds for design review change to square footage, SEPA thresholds are still based on unit count, so the overlay of complexity and perverse incentive to reduce housing production and supply will continue.

There are a myriad of problems with the rest of the proposal.

The proposal creates a threshold for “project complexity” which would include those projects outside the Urban Centers or Urban Villages, zone edge conditions, or adjacent to single-family zones.  This complexity threshold would serve to increase the level of design review process required. Why would the City endeavor to enshrine single-family zones by making the process of building near them more expensive and complicated? This favors wealthier single-family home owners over new people who need more affordable multifamily housing.

Additionally, the proposal adds more public process prior to the Early Design Guidance (EDG) meeting.  This step is ill defined in the legislation and the design review process is already an extensive and staff intensive, facilitated community process; this is why there is little incentive now to go through all that process. It is unclear what this additional process would add other than costs, more documentation, and staff work from both the City and the producer. We suggest dispensing with it.

Here are our more specific concerns:

  • We question the wisdom of eliminating Streamlined Design Review (SDR) as an option since it is the one form of design review that actually works reasonably well with regard to housing production.  We should retain SDR and use it for the lowest category of review, and the threshold for that should be raised to 12,000 to 20,000 square feet. Opting in to SDR to get a little bit of design flexibility is a great option for many small projects. The step up from “no process” to “administrative design review” is punitive and would push good and innovative ideas to the back of the line, something SDR was created to avoid. Encouraging innovation is something that the Housing Affordability and Livability Agenda (HALA) Committee encouraged.
  • The thresholds haven’t been raised and in many cases they have been lowered.  The so-called, “hybrid” design review could in fact end up being worse that full design review. With this proposal, anything larger than 10,000 square feet will require a Type II designation that is exposes projects to an appeals process, a big disincentive.
  • As mentioned above, the complexity measure seems designed to protect the residents of single-family homes by enshrining that zone with special considerations, triggering more extensive reviews and an unlimited number of public meetings for projects adjacent or across the street from single-family. Again, the City is favoring stasis on behalf of people who already live here at the expense of new people who are trying to find housing.
  • Projects with 8 units that avoided design review under the old system will now likely be over 10,000 square feet, a threshold that will lead either to Administrative Design Review (ADR) or to the Hybrid system and at least $50,000 in additional expense, up to a year of timeline, and exposure to appeal under the Type II designation. Obviously, and when taken together with the complexity factor added by adjacency to single-family zones, this creates an incentive to create fewer numbers of units on a site.
  • For small apartment producers, those projects less than 20,000 square feet with a significant percentage of Small Efficiency Dwelling Units (SEDUs), would have typically been in ADR or SDR. Now SDR is unavailable, and they may end up in Hybrid design review that is not a benefit for housing production as we pointed out above.
  • The misalignment of SEPA and design review thresholds creates more potential for a Type II process, and that creates an incentive to under-build a site to avoid triggering more expense through a longer process, exactly the opposite of what the City should want.

We suggest thresholds for design review that will be beneficial and encourage more housing production.

  • Less than 12,000 square feet – no design review
  • 12,000 -20,000 – SDR
  • 20,000 – 40,000 – ADR
  • Greater than 40,000sf – Full design review; we don’t see the benefit in process improvement or costs savings with the Hybrid review over full design review.

This approach to thresholds would mean a 12,000 square foot project, most 8-unit townhouse and row house projects, out of the design review process completely.

The 20,000 square foot threshold will keep most small infill apartment projects in SDR, a process that has, as we pointed out, been working pretty well. And, finally, the 40,000 square foot threshold will keep most mid-scale apartment project in an administrative path, out of the public process.

What we’re suggesting is consistent with what people who build and finance housing know will improve overall housing production and provide more supply for burgeoning demand in our city. As city, together, we can make housing production a priority, consistent with the broader recommendations from the HALA Committee, especially Section IV of their recommendations, or we can continue to allow design review to slow and limit production that will contribute to increases in housing prices.

Sincerely,

Roger Valdez
Director

Leave A Comment

You must be logged in to post a comment.