Design of Affordable Housing: The Return of the Homestead
by Mike Pyatok

Multifamily Trends by the Urban Land Institute
December 2000

It is not clear when the term ‘low-income’ housing waned and the term ‘affordable housing’ rose in popularity within America’s housing industry. Maybe it is a question for linguists or anthropologists or pop historians to answer. But within the past three decades the nomenclature subtly transformed to a less stigmatizing ring as the number of households who had difficulty paying for their housing ascended into the middle classes.

According to a recent HUD report on the state of America’s cities1, during the past three years house prices have risen at more than twice the rate of overall inflation and rents more than one and a half times that rate. A third of all cities participating in the study said that they had a shortage of affordable housing for their middle classes and 46% said there was a serious shortage of affordable housing for their lower income households. This is not just a problem for the chronically underemployed but households with one and even two working adults in many urban areas face the difficulty of paying more than 30% of their income for a roof over their heads. Those urban areas suffering from the skewed patterns of investment associated with the dot.com economy have seen housing prices and rents soar beyond the reach of the majority of households in those regions. In San Francisco, a person earning minimum wage would have to work 174 hours each week just to pay the median rent. What is most sobering is that the number of households with a full-time breadwinner who are paying more than 50% of their incomes on housing had grown by 28% just between 1991 and 1997.

These numbers have profound importance for housing policies at all levels of government which attempt to make housing cost less for both developers to produce and consumers to buy. When architects, planners and housing designers read these numbers, we cannot help but dream again about some technical solutions to this worsening problem like higher densities to lower soft costs and land costs per unit or prefabricated elements to speed the process of erection while relying more on cheaper factory labor, or smaller more efficient dwellings to save materials, or better insulation and orientation to conserve energy, etc. But in a booming economy with severe labor shortages and high inflation in the construction industry along with runaway land speculation, even major construction breakthroughs and technical design innovations have limited ability in lowering costs. Add to this the usual problems that major technical innovations face when dealing with learned and persistent habits of labor, material suppliers, and consumers and soon any possible benefits from such innovations seem fruitless.

However, if housing designers recognize that the difficulty of keeping housing costs within 30% of income has more to do with the inability of household income to keep up with housing costs, perhaps we would focus not just on technical innovations in construction methods and materials but do more with planning and programming housing stock so that it allows its occupants to conserve their incomes and even expand their buying power while residing within their housing. Let me explain.

Neighborhood Planning.
If we observe households who have historically coped with limited incomes, such as farmers, immigrants, pioneers or the entrepreneurial urban underclasses, a clear pattern is obvious. First and foremost, they lived close to the sources of their livelihoods to minimize their transportation costs: adjacent to the fields, factories, offices or retail outlets where they labored. Planning more mixed-use neighborhoods with a wide variety of work opportunities along with good public transportation, may be the single most important contribution to making housing more affordable rather than trying to develop the next generation of cheaper structural framing or siding materials. A cheaper suburban house out on the fringe of a city can be much more costly to a family when the ever-escalating costs of owning, operating and servicing a second or even third auto (for teenagers) are taken into account, not to mention the hidden costs of time lost for work commutes and multiple trips for other needs. The somewhat more expensive but fixed cost of a home closer in to the center of work may prove to be cheaper where the costs of transportation can be much lower.

Home Design.
If we continue to use farmers, immigrants, pioneers or the entrepreneurial urban underclasses as a model, they demonstrated another time-tested strategy for lowering the costs of living: while some in their household joined the labor market away from the home, other family members sought ways to earn income using the home as a base for their labors. Obvious contemporary examples of this are at-home ‘live-work’ arrangements of our computer age. But not so obvious to us white-collar developers, professionals, government planners and housing policy-makers are those who earn their additional incomes not by word-processing or by speculating on the stock market via the web, but by repairing appliances, making clothing, running catering businesses, manufacturing and assembling toys, dolls, or plaster figurines or providing all manner of services from hair and nail cosmetics to body-building personal training-all undertaken in the confines of the homestead.

This may not seem like much of a design assignment since we may believe that most entrepreneurs can figure out a way to adapt their homes to their work needs. But there are several regulations and design impediments along with relatively recent cultural taboos about the purpose of a home and what ought to be appropriate residential neighborhoods that are preventing second and third incomes from flourishing in the homes of lower-income households.

Regulations.
One of the obvious impediments is zoning. While zoning regs often prevent some of these ‘messier’ businesses from coexisting in residential neighborhoods, it must be remembered that such regs developed by planning technicians and commissions reflect the cultural preferences of those who monitor and influence the formation of zoning regs for residential neighborhoods-- middle and upper income homeowners concerned about their preferred ‘lifetstyles’ and their homes’ eventual resale values. Cultural preferences which shape today’s definition of home are very much determined by these classes which do not face the same economic necessities as lower income households, and as noted above, if they choose to use a portion of their home for a source of income, they engage in discrete activities that usually do not affect neighbors.

In less than three quarters of a century, the value of the home as a source of all forms of survival activities from farming to fabrication, has evolved under culturally-determined zoning preferences to be valued as a bucolic escape from work. It is seen as an investment whose income value is realized not so much during use but upon departure, upon its sale. The cultural expectations of middle and upper classes dominating residential zoning regulations need reform and flexibility to restore to lower income households the wide range of home-based economic opportunities that were afforded to our ancestors even just a few generations ago.

Some Experiments.

Our firm, specializing in serving lower-income communities through non-profit developers, has recently begun to experiment with ways to expand the income earning capacity of lower-income households through neighborhood planning and housing design. Some examples include:

Prescott Homes, Oakland, CA
These infill homes for families at 70% of median were designed to allow the first-time owner to rent the front half of the lower floor as an ancillary unit. The bank recognized the value of this additional income when qualifying buyers. These studio units can later expand to the rear of the homes to become 2-bedroom rental units while the owner can recapture lost space by expanding into the attic.

Martin Luther King Homes, Tacoma, WA
Located on a former retail street, whose zoning still permits non-residential uses, these homes for first-time buyers have two front entrances, one from a rear court for the family and one into a front room facing the street for guests or possible business customers. This room has extra volume and can be segregated from the rest of the house if the household chooses to use it as a family business.

Gateway Commons, Oakland and Emeryville, CA
Located on a street busy with traffic and zoned for commercial uses, these homes for first-time homeowners facing the street have 2-story front rooms that can be separated from the rest of the house for possible businesses. An outdoor patio with a window buffers the room from the street if the household uses it as part of their residence but the window can also allow the patio to be used as a display area for a business. The units in the rear row that face only onto the interior auto-pedestrian court, have ground floor rooms equipped with bathrooms and alcove for a drop-in kitchenette in case those families want to rent those rooms as studio apartments for additional income.

Hismen Hin-Nu Terrace, Oakland, CA
Located on a major boulevard that formerly hosted several miles of neighborhood retail prior to the construction of a nearby parallel freeway, this project intentionally included a market hall with housing above for small start-up craft and clothing vendors. Along the outside edge of the market hall was a row of indented niches for street vendors for very young incubator businesses. Designed independently of the housing, the space is available for residents of the complex to begin their own businesses.

International Boulevard Housing, Oakland, CA
Located on the same street as the previous project, this one includes ground floor units zoned and designed to allow occupants to either produce products or services. Each unit has a front room with storefront windows, four-plex electrical outlets at the bottom and tops of walls, a large stainless steel work sink in the toilet, and double pocket doors to either expand the business to the rear of the unit or close it off to keep the rear private. Each unit has a blade sign and metal canopy at its front street entry to announce the business. The spandrel zone above the storefront windows is designed to receive artwork depicting the purpose of the business below. These ground floor units can be serviced from the parking court to the rear.

Sycamore Street Coop, Santa Cruz, CA
Located on a former industrial site, this rental housing, funded with tax credits, includes three-story townhomes with a bedroom and full bath on the ground floor that can be used either to sublet to roomers or for a small, home-based business accessed from an entry foyer. The kitchen, dining and living functions are on the second level, while two more bedrooms and a bath are on the third level.

Jingletown Homes, Oakland, CA
This project is located in an ‘overlay’ zone that permits residential and/or industrial uses. Designed for first-time homeowners, there are two unit types with income-producing potential. Located along the front street edge of three auto-pedestrian courts are units with their living rooms on the second floor with a bedroom on the first floor. This bedroom in combination with the garage can be closed off from the rest of the home and entered from the front door as a home-based business with immediate connection to the street. The garage can open to the rear yard to expand the messy work activity taking place in the garage, while the driveway apron is large enough to become the parking space. Also, homes placed along the central pedestrian walkway have a bedroom and bath off the kitchen to accommodate grandparents, a working son or daughter paying rent into the household or roomers.

Conclusion.

The examples above demonstrate ways for using the home to create additional sources of income. In some cases permissive zoning was already in place but several required variances or a change in zoning in order to permit the mix of uses. These latter efforts slowed the development process, sometimes as much as a year to accomplish the changes. Increased parking requirements to accommodate potential customers or accessory units at times were achieved but in others relief from these requirements had to be strenuously argued. Finally, for the rental projects, these experiments are still just that for the management companies. Since all of them were built in the mid- to late-90s, not enough time has transpired for occupants to test property managers searching for sensible limits to what should be permitted. Finally, income limits that may accompany some forms of subsidized housing can have a significant dampening effect on home-grown entrepreneurial efforts. The contradictions in government policies which on the one hand want to encourage economic self-help activities but then prematurely withdraw housing supports at the first signs of success need to be reexamined, with gradual reductions in housing assistance as income improves.

In all cases, the ongoing financial benefits to residents of housing designed for work are favored by all involved: residents are the obvious beneficiaries, but more stable and improving incomes means lenders see a reduction in mortgage defaults, landlords see a reduction in missed rent payments, local businesses see increased activity from the expanded buying power of residents, and neighborhoods become more stable, all accomplished without relying on magical technological breakthroughs.