The Multifamily Multiverse: The Challenging and Conflicting Demands of the Marketplace

The Multifamily Multiverse: The challenging and conflicting demands of the marketplace soapboxmedia.com/features/AIA-Multifamily-Multiverse-affordablility-livability.aspx

Julie Carpenter | Tuesday, August 31, 2021

The Baldwin common space/Elevar Design Group Provided

Over the past year, multifamily housing has been big news with the Affordable Housing Trust Fund ballot initiative, the release of the LISC-led Housing our Future strategy, and Embracing Growth, a new report from the Cincinnati USA Regional Chamber Center for Research and Data.

Top of mind for community leaders, architects, and developers is the quantity, affordability, and type of multiunit dwellings that are available and essential to help our region grow and thrive. While the pandemic slowed much of the economy last year, the residential housing market was largely unaffected.

“We haven’t seen any slowdown,” says Graham Kalbli, AIA, with New Republic Architecture.

“If anything, it’s been a ramp up. And more multifamily creates the demand for multifamily since developments feed off each other instead of competing.”

As the multifamily market grows, it must also respond to the changing — and sometimes conflicting — demands of the marketplace and society.

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Size Matters Our region is often ribbed for being behind national trends, but when it comes to square footage of urban apartments, we’re well aligned.

“Apartments are getting smaller,” says Kalbli. “We used to need more room. Everyone had a record collection, books, CDs, and a huge television. Now all of that can fit on your phone, so you have less space requirements.”

In addition to having less stuff, more people are living alone: 28% of all American households are a single adult and another 45% of households are either childless couples or adults sharing with other adults. In Hamilton County, non-nuclear families make up 42% of households with 81% of them living alone, plus 33% of seniors live by themselves.

Despite these shifting demographics, zoning prioritizes single-family residences. The Chamber’s report reveals that 77% of residential land in the City of Cincinnati is zoned for single family homes, a percentage that is even higher in some regional communities. It’s not surprising then that 74% of housing construction permits in our region are for single family homes. But just up the road in Columbus, a region that is outpacing us in growth, 54% of permits are for buildings with five or more dwelling units.

“Housing is the number one issue we should be dealing with,” says Kathleen Roosen, AIA, with BDCL Architects. “When people don’t have housing, they suffer immediately, and it snowballs into everything else in their lives.”

During the pandemic, the housing market remained strong, including multifamily dwellings.

Two new projects that opened downtown in the last year — The Reakirt and The Blonde — included some of Cincinnati’s first micro-apartments.

“The Reakirt has nine, 300-square-foot units and they were the first to lease,” says Kalbli.

“Some people may use them for a pied à terre but the prices are also better for people who can’t afford a 700-square-foot one bedroom.”

Will the trend toward smaller apartments continue? Or will the pandemic-triggered need for additional space to work or learn from home result in larger units?

“We are seeing developers interested in adding space to units for a home office,” says Mark Browning, AIA with Elevar Design Group. “But most are waiting to see how things resolve once the pandemic is behind us since it’s unclear whether remote work will continue, grow, or decline.”

The NIMBY Problem In addition to the overall housing shortage in the region, the lack of affordable housing (a gap of 40,000 units, according to LISC) has reached critical proportions and become a polarizing issue.

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“There is a lot of NIMBYism with affordable housing,” says Roosen. “But affordable housing is not always Section 8; it’s not always public housing. What a lot of people don’t realize is that they might qualify for affordable housing because it’s based on area median income (AMI).”

Many affordable housing developments serve a mix of incomes, including people earning between 30% and 80% of AMI. Which means an entry-level police officer, fire fighter, teacher, and mail carrier in Cincinnati could qualify for an affordable unit, in addition to those essential employees making $15 an hour or less at grocery stores and other service sector jobs. " "We go through re-zoning on almost all of our projects," says Roosen. "It's a lengthy process, sometimes years, and there's no guarantee of approval.

The “Not In My Back Yard” barriers aren’t just for affordable housing, but impact many multiunit dwellings from market-rate apartments to the recent kerfuffle over cohousing for priests in North Avondale.

“NIMBYism is getting out of control,” says Kalbli. “We even see pushback in Over-the-Rhine.

But we need more density to support public transit and local businesses.”

Density isn’t just important to the urban core. Small neighborhood business districts like Pleasant Ridge, Hyde Park, Clifton Gaslight, or Northside need a critical mass of people for services and restaurants to survive and thrive, as do suburban and rural communities whose Main Streets can’t compete with strip malls. Yet those communities are the most likely to have restrictive zoning.

“It’s extraordinarily difficult to successfully challenge zoning regulations in suburban areas, especially when trying to move from single-family to multifamily,” says Browning. “Carefully conceived and well-designed multifamily housing can enhance a community while providing opportunity for both affordability and diversity often lacking in our neighborhoods” Some NIMBYism comes from an aversion to large complexes, but restrictive zoning also makes it impossible to develop smaller units like a duplex or triplex. In fact, in Cincinnati those buildings are often considered non-compliant structures and if a fire destroys one, the lot reverts to single family zoning.

Mixed-Use Development Over-the-Rhine once had the largest collection of tenement buildings outside of New York City, including many with street-level commercial space. Across greater Cincinnati, mixeduse development combining residential and commercial functions is popular, although it is not without complications.

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“One of the biggest challenges with sites in the urban core is the requirement for street-level retail and commercial,” says Browning. “When successful, it brings a vitality to the streetscape that enhances the community, however it is expensive to develop and can be difficult to lease.”

Interestingly, the mixed-use typology is cropping up in suburban and exurban areas. The Liberty Center project in Butler County creates a pseudo-urban neighborhood of shops, restaurants, entertainment, and two buildings of one-, two-, and three-bedroom apartments.

Factory 52, under construction in Norwood, will also include apartments, retail, and office facilities.

“I would like to see suburban development push more boundaries,” says Kalbli. “There are people who will never leave the suburbs, so as designers, if we can bring some urbanity to them, it’s a win.”

Three Cincinnati neighborhoods — Madisonville, Walnut Hills, and College Hill — are using form-based code which allows for more mixed-use development by focusing on the form of the building instead of its use. Even affordable housing developments are mixed-use in some communities, although it does complicate both design and property management.

“In communities with some NIMBYism, we will purposefully set the larger multi-unit building along the commercial street then scale down to single-family homes next door by using townhomes as a buffer,” says Roosen. “We’re also seeing scatter-site development of affordable single family and rowhouses in smaller communities.”

New Typologies

The interior of The Baldwin/Elevar Design

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In addition to traditional apartment buildings, the multifamily world also includes projects for specific demographics: seniors and students.

Senior housing includes projects that target residents ages 55 and older, as well as developments that provide some level of care and service. In addition, many empty nesters are giving up their house in the suburbs for a smaller urban apartment convenient to restaurants and entertainment.

“Nationally we’re seeing senior housing being developed in urban centers, taking advantage of the proximity to shopping, dining, entertainment, and services,” says Browning. “Empty nesters have made up a significant share of the growing multifamily market. I would expect to see projects specifically serving seniors — both independent and those requiring services — in the near future in the Cincinnati market.”

Another national trend that hasn’t caught on yet in our region is co-living, where a renter has their own bedroom and possibly bath, while sharing a kitchen and living spaces with other, unrelated adults. Companies like WeLive, Common, and Ollie have established large coliving developments in metro areas like New York, Chicago, and Pittsburgh. In Cincinnati, there are smaller intentional communities and co-living spaces like those offered by Kunst, but not a large-scale development.

“We see a similar concept in student housing,” says Browning. “It can be an attractive option when the cost of housing is high and for single people looking for a built-in community. It’s also an interesting concept for the senior market both for cost and to address isolation.”

Demand, Dollars, and Design The multifamily housing market is driven by the marketplace and zoning, but also financing.

For a private developer, the availability of tax credits and incentives can make or break a project.

“There is demand for multi-generational or income generating duplexes,” says Kalbli. “But the economics don’t always make sense.”

Even before the pandemic, the escalating cost of building materials and shortage of skilled workers made building a multiunit structure challenging. With the price of some building materials increasing by 300% over the last year, some projects have moved from challenging to impossible.

“The cost of construction is so high that many amenities are not an option in affordable housing,” says Roosen. “If we have to go through a value engineering process, all the drawings are reconsidered and our designs shrink. Unfortunately, it’s the residents that suffer.”

The challenge of financing a project is also impacted by zoning which may restrict the number of units, require parking (often two spaces for each unit), and limit the height of a building. Architects and their clients navigate those constraints on every project.

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“We’re trying to do the best job we can within the reality of producing a building that is well received and performs,” says Browning. “Architects try to push the envelope from a design and sustainability standpoint; clients from a marketability and financial perspective.”

As the multifamily market continues to grow, architects work to design spaces that support the health and well-being of residents while meeting the demands of their clients.

“Everyone deserves to have good design, whether you’re a struggling single mom or a multimillionaire,” says Roosen. “Knowing that I am making a difference in people’s lives, including people who couldn’t traditionally afford to hire an architect, is why I love what I do.”

Julie Carpenter has a background in cultural heritage tourism, museums, and nonprofit organizations. She's the Executive Director of AIA Cincinnati.

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