Episode 6: Affordability by Design
“City of the Future” is a podcast that explores ideas and innovations that could transform cities. In this episode, hosts Eric Jaffe and Vanessa Quirk discuss the future of housing with Ori CEO Hasier Larrea, architect Eric Bunge, Starcity CEO Jon Dishotsky, Sidewalk Labs housing expert Annie Koo, and others. The following is an edited transcript of the episode.
Eric Jaffe: Like most U.S. cities at the turn of the 20th century, San Francisco was filled to the brim, with many people packed into one-room apartments.
Vanessa Quirk: One of those people was a young inventor named William Lawrence Murphy. And his tiny apartment was a big problem.
Eric Jaffe: He had fallen madly in love with an opera singer and was desperate to court her — but the moral and legal codes of the time meant it would be improper to bring her into his bedroom.
Vanessa Quirk: But his apartment was only a bedroom.
Eric Jaffe: And so, engineer that he was, Murphy wondered if he could somehow transform his bedroom into something else —
Vanessa Quirk: What if he could hide that bed somehow…
Eric Jaffe: Murphy attached the bed to a hinge inside his closet and pushed the mattress up, and the Murphy bed was born.
Eric Jaffe: By the 1920s and 30s, the Murphy bed became a status symbol that developers used to attract residents. It soon spread like wildfire across America — in real life and on screen.
Marx Brothers clip: “The bookcase by day, is a bed by night.”
Vanessa Quirk: From the Marx Brothers, to Mickey Mouse, to Bob Hope — the Murphy bed became a comedic sidekick.
Bob Hope clip: “Whoops!”
Eric Jaffe: Always mis-functioning…
Bob Hope clip: “That’s a nervous bed, it works by itself.” Boing sound effect.
Eric Jaffe: And trapping people inside of them.
Cheers clip: “Please let me out, please!”
Vanessa Quirk: Not even James Bond was safe.
Clip from You Only Live Twice : “We’ve had some interesting times together Ling, I’ll be sorry to go.” Dramatic sound effect of bed closing.
Vanessa Quirk: The Murphy bed’s popularity waned after World War II, as people left cities for the green lawns and spacious homes of the suburbs.
Eric Jaffe: But today, cities around America once again find themselves packed to the brim. So, can we update the Murphy bed for the 21st century?
Hasier Larrea: Here we are in front of the Ori Square, which is the Ori interface.
Vanessa Quirk: Yup.
Sound of Ori Studio Suite moving.
Vanessa Quirk: Oh, here comes the bed. And it’s not going to squish us into the wall? [Laughs]
Hasier Larrea: No no no, and there’s of course safety sensors so if it senses force, it’ll basically stop.
Hasier Larrea: A Murphy bed is easy to transform, but it’s not effortless, meaning when you need to transform a Murphy bed, you have to take out the pillows and now you have to make the bed, now you have to put some straps so the linens don’t fall…
Vanessa Quirk: Right.
Hasier Larrea: And that’s why robotics are important because that’s what gives you that effortless experience, and that gives you that feeling of finally a space adapting to us instead of us adapting to a space, which is how it’s been for centuries.
Eric Jaffe: So this is a robot bed?
Vanessa Quirk: Yes, but it’s not JUST a robot bed. It’s also a partition unit slash closet, and you can push it all up against a wall to create this much bigger living room. Or you can move it to the middle of your studio to transform one room into two rooms.
Hasier Larrea: You actually have two offices, a full walk-in closet, a bed, and an entertainment area, all in one piece. It’s like a Swiss army knife.
Eric Jaffe: So did you bring one back to New York for me?
Vanessa Quirk: Well, right now, ORI is mostly marketing the Studio Suite to developers. But they’ve actually started working with IKEA on a more affordable consumer version. Hasier thinks that if it takes off, it could really make a difference for people living in small spaces.
Theme music begins.
Hasier Larrea: When you look at an apartment, one of the first things you ask is, “What is the square footage?” What technology is going to do, it’s going to totally change that. And it’s going to prove that a 300 square feet apartment, just to give you an example, could feel much better and much larger than a 500 square foot apartment.
Vanessa Quirk: This idea — of making more with less — could help address one of the most pressing challenges facing cities today.
Eric Jaffe: Welcome to “City of the Future” a podcast from Sidewalk Labs.
Vanessa Quirk: Each episode we explore ideas and innovations that could transform our cities. We’re your hosts, I’m Vanessa Quirk.
Eric Jaffe: And I’m Eric Jaffe. In this episode we’re talking about ideas that will not only improve the physical spaces we live in, but they way we live in them.
Vanessa Quirk: Affordability by design.
Theme music ends.
Eric Jaffe: One thing that hasn’t changed since Murphy’s day is that urban space is limited and expensive.
Vanessa Quirk: In fact, this problem has just gotten worse.
Eric Jaffe: In the U.S., and most countries around the world, local and federal governments have traditionally played the most important role when it comes to creating affordable housing, especially housing for lower-income households.
Vanessa Quirk: In 2012 New York City held a contest to incentivize the private sector to help them chip away at this issue, in this case, by building a new housing type that the city was lacking: small, beautiful studios.
Eric Bunge: We like to say that we increased the size of everything except for the square footage.
Vanessa Quirk: I actually got to tour Carmel Place when it opened and it was really impressive how airy and pleasant the studios feel. The square footage is small, but the ceilings are high, the windows let in a ton of light. And — what I didn’t know at the time — is that a lot of what was shrunk down was stuff I never would have noticed.
Eric Bunge: We can scrutinize every single thing … What is the performance of a door? It has to block sound, it had to provide a fire separation, but, what if it were three millimeters thick? That’s probably too thin — but why don’t we scrutinize those things that add up? Floor assemblies, ceiling assemblies, all the things that are invisible, but take up probably 10 to 15 percent of our home, can be kind of captured spaces that we can actually give back to residents, if we rethink everything.
Eric Jaffe: So one of the ways to make 300 square feet feel like 500 square feet is by shrinking invisible architectural elements.
Vanessa Quirk: Well shrinking is just one of the concepts that Eric and his team use to guide them when they are designing this type of urban housing. Another one is sharing.
Eric Bunge: You can start to organize units to share one small common area, but is there an even smaller grain? Like, well, you don’t have to throw something out, but you can throw something to somebody else — it’s not Marie Kondo but, we are now able to share in a much more intelligent and precise way.
Eric Jaffe: So if you share kitchen equipment within a building, say, you don’t necessarily need as big kitchen any more.
Vanessa Quirk: Right. And the last design concept is transforming. Imagine like a table or a desk that you could fold up and turn into a wall.
Eric Bunge: Anything can become a wall if you fold it up, and so we can think about housing as the framework that provides space and allows for flexibility. I think we should be planning for the unknown.
Eric Jaffe: We’re trying to push this even further with our proposal for a neighborhood of the future along Toronto’s eastern waterfront.
Annie Koo: I’m trying to get us beyond pure square footage as the core metric for my housing cost and price, but rather just quality of space and thus, quality of life for me as a resident.
Eric Jaffe: That’s Annie Koo, Associate Director for Development at Sidewalk Labs. She’s spent her career in the public and private sectors trying to make housing more affordable.
Vanessa Quirk: She originally went to school for architecture — but that didn’t last long.
Annie Koo: I got very frustrated when I realized that architecture was about building for, primarily, people who can afford to live in well-designed homes and so was sort of fascinated by affordability by design, and what that looked like, and that took me to housing.
Vanessa Quirk: So “affordability by design,” can you break down that concept for us?
Annie Koo: So affordability by design is, at its core, this concept of reducing unit size because that’s critical for enhancing affordability.
Eric Jaffe: Right, I mean, we’ve talked about this before. With smaller apartments, developers can create more total units than they normally would — and more total units means more affordability for a city.
Annie Koo: Yeah, but we think about it as far more than just that.
Annie Koo: Affordability by design, as we define it, is important to actually increase the quality of the spaces. It’s about rethinking space and making sure that it’s a fit for our families, for households.
Vanessa Quirk: So it’s not shrink, it’s rethink.
Annie Koo: Yeah! It’s about expanding the shared spaces within a building. It’s about a floor plan that allows you to grow into a one bedroom and actually sync up the hallways or interior corridors that allow you to do that. And with things like on-demand storage and robotic furniture… I want to rethink the unit so that it’s distilled down into just what someone wants.
Vanessa Quirk: OK, so it sounds like affordability by design isn’t just one thing. It’s a lot of different things that, together, will make a smaller unit feel like a more comfortable home.
Eric Jaffe: So let’s go through some of the ones you just mentioned in more detail. Let’s start with flexible furniture.
Annie Koo :Yeah, sure. So, say I’m Annie, and all I care about —
Vanessa Quirk: Say. [Laughs]
Annie Koo: Sorry.
Eric Jaffe: Imagine you’re Annie.
Annie Koo: And all I care about is the kitchen. But Eric cares mostly about his living space, because he hosts raging parties. [Laughs]
Eric Jaffe: There’s one going on right now.
Annie Koo: So imagine if you could have something that’s flexible, that comes into your space, that can help Eric expand his living space, but also convert back into a kitchen if need be. Or Annie takes it, and it really expands my kitchen counter space but can fold up into a living room, as needed.
Eric Jaffe: Ok, so that’s flexible furniture, but you also mentioned something that goes beyond furniture — flexible floor plans.
Annie Koo: Yeah, it could be, like, how do you create future-proofed floor plans that allow you to use flexible walls to grow or shrink units?
Vanessa Quirk: The flexible walls are a super cool idea that we will return to in a future episode. But the bottom line for housing is that these walls would allow your apartment to evolve to fit your needs.
Annie Koo: Often families move out to the suburbs, move elsewhere to seek more space. But if you’re able to grow or shrink your unit on demand, would you be more likely to stay in the city for the life of your home and your family?
Eric Jaffe: Another thing you mentioned is this idea of on-demand storage.
Annie Koo: Yes, we are imagining this housing model where you can have off-site, on-demand storage. Can you store some of the things that you don’t use on a day-to-day basis in a cheaper square footage, further off site?
Eric Jaffe: Such as all my party equipment.
Annie Koo: [Laughs] Exactly.
Vanessa Quirk: The DJ turntables. [Laughs]
Annie Koo: Yeah, that are being used right now, apparently.
Vanessa Quirk: But wait, offsite storage? What does this mean? no closets?
Annie Koo: My vision is actually, could the offsite storage be delivered directly to your closet at any given time.
Vanessa Quirk: But how do you get it instantly? That sounds like magic.
Annie Koo: Robots.
Vanessa Quirk: Oh delivery robots! Season one, episode four!
Vanessa Quirk: So, I could store all my special cooking gear most of the year, and then have a delivery robot just instantly bring it to me when I have a big holiday party.
Annie Koo: Yeah, we also think that sharing certain amenities spaces like a kitchen or a dining space that lets you truly have that massive dinner party that you want, without reserving that only in your space and used once a quarter or once a year, is something that folks would want to sign up for.
Eric Jaffe: Or a guest room.
Annie Koo: Or a guest room. I think that’s one of the most important ones actually. It’s a way to both right-size housing units so you live in what you need and what you actually want versus buying that extra two bedrooms simply because every Christmas or holiday season my family might come in and visit, and that’s just not the most efficient use of space.
Dreamy music begins
Annie Koo: I think today, in many ways, you have to over-buy or over-rent space in order to afford choice. But with affordability by design, you’re able to say, “I want that extra kitchen in a shared space. But I don’t have to necessarily have to pay for it in my personal unit.” So it affords you more choice in that way.
Eric Jaffe: I’m just not sure how many Americans will go for sharing a kitchen. I mean, I think a lot of Americans would take the private space over the shared space every time.
Vanessa Quirk: Well, not necessarily.
Dreamy music ends. Up-beat music begins.
Nest YouTube clip: “Co-living is a shared living experience that’s focused on convenience, great spaces, and a really strong sense of community.”
Node YouTube clip: “We didn’t really have to focus that much on furniture, looking for different roommates, even just what to do in the neighborhood.”
Quarters YouTube clip: “And they have this huge beautiful rooftop where you can go all the time.”
Vice News/HBO YouTube clip: “We have Sunday night family dinner at WeLive followed by Monday morning breakfast at WeWork — it never ends.”
Vanessa Quirk: There are a whole host of co-living companies that have sprung up over the last few years.
There’s Common, Ollie, Quarters, Outpost club, Dwell, Tribe, Roomrs (that’s ROOM-rs), Node. And those are just in New York!
Eric Jaffe: Well I did not know that.
Annie Koo: Yeah. This is sort of the great failure of my life, but I did not predict co-living.
Vanessa Quirk: Annie studied abroad in Denmark, where she researched co-housing, which is the inspiration for the phenomenon of co-living.
Annie Koo: In Denmark it was framed as maybe max 10 families, realizing that they wanted more communal living, so they would build shared kitchens and eat dinner together every night. And I was fascinated by this, and my whole thesis was around how Americans will never take to co-housing because it’s so fundamentally different from our vision of private housing and what we believe to be true about the American Dream. So, that was what I wrote my whole thing about. [Laughs]
Vanessa Quirk: Yeah, it would have been hard to believe a few years ago, but shared housing is a thing now.
Eric Jaffe: Well, co-living didn’t bring shared housing to the US. I mean our cities have had SROs going back to the time of the Murphy bed.
Annie Koo: Yeah. SROs refers to Single Room Occupancies, a worker style housing that was meant to house workers cheaply and efficiently and close to the city so they could be close to their jobs. It wasn’t quite equivalent with the tenements but similar in that they were just unsanitary, unhealthy, people crowding into spaces.
Eric Jaffe: Considering that history, I’m surprised that co-living developments are taking off right now.
Vanessa Quirk: Well, they do have some key differences from SROs. To understand what co-living is exactly, we decided to talk to someone who’s making it happen.
Jon Dishotsky: I actually grew up in a communal housing. My dad and mom moved out from the East Coast in the 1960s to the heart of San Francisco, North Beach, right where we’re sitting.
Eric Jaffe: A city of course that’s having a particularly hard time with housing right now.
Jon Dishotsky: People are commuting an hour or two outside of the city. They’re fitting four people to a two bedroom by putting a wall up in the living room and calling that a room, or they’re paying 70 percent of their income towards rent in new construction studio apartments. And all of those are really crappy options and so we really set out to build a brand at a price point that’s a lot more reasonable than anything else that’s on the market that’s being built new today.
Vanessa Quirk: Most Starcity developments are slightly below-market rates. But an upcoming downtown development will include units as low as $800 a month. For comparison, the average cost for a studio in that area is over $2500 a month.
Eric Jaffe: So who’s living in these?
Jon Dishotsky: We have an airplane pilot, a teacher, baristas, bartenders. The age ranges between 20 and all the way up to 70 with the middle being that 30 to 40 year old range.
Vanessa Quirk: Jon says that Starcity attracts two types of residents. One group is what they call the optimizers.
Jon Dishotsky: For the optimizer, everything is always setup.
Vanessa Quirk: What brings them in is fully furnished units, clean common spaces, the fast WiFi.
Jon Dishotsky: In addition to that, they can order premium services like dog walking, room cleaning, wash and fold, dry cleaning, all that sort of stuff. The optimizer is really just looking to be taken care of.
Vanessa Quirk: The other type of person living at Starcity is the communitarian.
Jon Dishotsky: This is somebody who’s really excited about living with other people, really excited about feeling like there’s a place that they belong. So maybe they have previously felt socially isolated and now they’re really looking for community.
Vanessa Quirk: And which one are you? Are you a communitarian or an optimizer?
Jon Dishotsky: Well, as I’ve gotten older, I’ve become a little bit of an optimizer because I would prefer to not to do the mundane things I’d have to do with housing and actually enjoy the culture of the night life, the arts, and continue to build this company. Those regular household chores can sometimes get in the way at that.
Eric Jaffe: Okay, it sounds like Starcity is taking care of the optimizers, but are they delivering community for the communitarians?
Vanessa Quirk: Well, we had Jon hook us up with one to find out:
Don Row: I had no idea anything like this existed. So it was all totally, totally brand new to me.
Vanessa Quirk: Don’s a 43 year old airline pilot who had lived in the suburbs most of his life — after a divorce he decided to move to San Francisco, which is where he discovered Starcity.
Don Row: Moving to a brand new city without knowing anybody, I realized I wanted roommates. And so that’s how I found this place is I was looking on Craigslist for roommates. And then that’s when I clicked on the website and got into a little bit more of the description, and that’s what sold me, as far at least giving it a shot, was it takes care of all the problems of having roommates, and you just get all the benefits.
Vanessa Quirk: Do you feel like you have a community now?
Don Row: No yeah definitely. The people that I see on a real regular basis, yeah, we’ve definitely become good friends, enjoying the house together, you know. Being able to come home from work and just have a random game night or random party night. It has definitely, I would say, even exceeded my expectations.
Vanessa Quirk: Now that Starcity has had some success with these smaller communities, they’re expanding and will soon open the largest co-living development in the world in San Jose, California. An 18-story tall 800 unit building. And Jon Dishotsky explained to me that the new building just doesn’t fit into the city’s existing zoning rules.
Jon Dishotsky: We called it a vertical neighborhood and so when we showed the city our plans, they’re like, “Well, you could re-entitle this project as a hotel. You could re-entitle it as student housing. You could re-entitle it as a single room occupancy.” and we’re like, “No, we don’t like any of those.”
Vanessa Quirk: But, technically, what makes you different from an SRO?
Jon Dishotsky: When we build a building, 65 percent of the space is private residential, 20 percent is communal, beautiful kitchens and living rooms, and work spaces, and then the other 15 percent is circulation, right? Hallways and elevator space. In an SRO, you have 95 percent private residential space, tiny hallways, and no communal areas.
Jon Dishotsky: We think co-living as a product is a physical new form.
Vanessa Quirk: So San Jose asked Starcity to collaborate with them to write a new kind of zoning, just for co-living.
Jon Dishotsky: We were like OK, that sounds wonderful! And over a period of six months we worked with them on all of the details. What’s the parking ratios? What are the open space requirements? What are the inclusionary housing and below market rate fees that we have to pay? What’s the transportation demand management program there? All of these were really bespoke to a higher density of living format. And so I think that as we look forward into the future, you’re going to see a lot of major cities start to adopt this type of zoning change because it fits a big need.
Eric Jaffe: That is pretty extraordinary that San Jose worked with them on that. All those details — the transportation plans, the parking — all those things have to be considered if something like co-living is going to work.
Vanessa Quirk: It gets back to what we were talking about earlier — will people really go for this? And the answer, I think, is yes, If you can provide the trade-offs. Which is kind of what city living is. I mean you accept a smaller space because you get all the shared opportunities and benefits.
Eric Jaffe: Public spaces are critical to that. Cities have the power to use zoning to ensure that developers — co-living or otherwise — provide people with more ample public plazas or green spaces.
Vanessa Quirk: Yeah, totally. I mean, according to Annie, thinking beyond the unit and expanding the public realm is a key part of affordability by design.
Annie Koo: It’s really expanding the definition of home so that when you’re purchasing or renting a unit, you’re not just getting your personal private space, but also the other spaces that make up the quality of my housing, including the neighborhood, the building, the public realm.
Vanessa Quirk: I really like this idea of “expanding the definition of home.” Because I think that, for a lot of Americans, the dream for years now has been about saving up to own your own house. But that’s not the only way to live. As we’ve talked about, there are a lot of different options that can fit people’s needs.
Eric Jaffe: Right but helping people to access that dream, that more traditional option, is just as important as creating new ones.
Vanessa Quirk: That’s true. In fact Annie’s been exploring a new way to give more people access to homeownership — with sharing, believe it or not. Not sharing your stuff or your space, but sharing equity.
Annie Koo: On the spectrum of renting and owning, shared equity sits somewhere in the middle. The way we’ve been thinking about this is you kind of buy what you can and rent the rest. So that means it lowers your down payment and your all-in monthly cost can be equivalent to a typical full mortgage payment or a rental in the same size unit.
Vanessa Quirk: And if it’s equivalent then what’s the upside?
Annie Koo: Say I owned 20 percent of my unit and then I left, I would take the appreciation on my portion that I owned. So you actually can build some equity, hence the shared equity term, and build a stake in that wealth creation piece over time. But it’s a stake that is a fit to you even if you can’t afford that full total down payment.
Eric Jaffe: This is a whole other category of housing affordability tools for both consumers and developers that we’ve thought about a lot here at Sidewalk.
Annie Koo: One of the most important parts of delivering housing affordability is thinking through the funding and financials and policy options that make it possible. Housing is really complicated. There’s an entire ecosystem of players who are participating in housing. Ranging from governments who are critical to provide the funding, creating the zoning, down to the builders and construction companies, down to the architects and engineers thinking about the experience of housing for residents. And no one player in that whole ecosystem, has enough of a stake in the whole pie to single handedly create more affordability.
So in our project in Toronto, first and foremost we said, “What is available for government to support on an affordable housing program”? But then we said, “What could the private sector do to participate or better support the public sector in delivering Affordable Housing?”
Eric Jaffe: So one of the things the private sector can do, we’ve already talked about — that’s affordability by design, which works by making more units in a given building.
Vanessa Quirk: But we’ve explored another innovation that makes more buildings in a given time. Factory-based construction.
Annie Koo: That is a huge lever to play.
Vanessa Quirk: Karim talked about that in our episode on mass timber from last season!
Annie Koo: If Karim can crack the code on factory, that will be huge for affordable housing because accelerating the timeline for construction creates real value for developers.
Vanessa Quirk: A major reason developers today keep building luxury condos is because it is the surest way for them to recover their costs. So with factory-based construction, developers can just reliably complete more projects quicker.
Eric Jaffe: There’s a couple ways that leads to more affordability instead of just more money for developers. First, government can say, “We’re going to raise the price of public land, and we’re going to take the extra money you’re giving us, and we’re going to build more affordable housing.” Or it can say, “We’re going to keep the price of the land the same, but you have to build more affordable housing — and we know you can afford to do it because you’ve got that cheaper and faster method.”
Annie Koo: The role of government can’t be overlooked. Like, it is the role of the government to set requirements for a site, and tax incentives, or rebates and waivers, to deliver more affordable housing, because a mixed income community is what we’re looking for as a city,
Vanessa Quirk: It’s a complicated ecosystem and things go hand in hand — Government funding. Support from private developers. Financial tools for renters. All these levers play a part.
Annie Koo: Yeah, without all of these levers, you would get the same old communities that get built today, which is primarily luxury market rate condos. To achieve the level of choice that we envision for housing of the future, I deeply believe that we need to have, and pull, all of these different levers at once.
Vanessa Quirk: So, if we can pull all the levers, if we can create all these housing choices, that really open up all these affordable options for all kinds of people… what would that look like?
Eric Jaffe: Yeah, we wanna hear about Annie’s housing of the future.
Annie Koo: Oof…Ok. Here’s what would happen. I’d be applying on this fantastic centralized application and I could say what I really care about is a kitchen. And so I get a unit, I add in this furniture that allows me to expand my kitchen and then suddenly I want to grow up and I want to build equity. So then I opt in to the shared equity model. And then suddenly my family happens to grow or my parents move in with me and we pop out some walls and then my whole unit expands and I get rid of that extra big kitchen because then I just expand my kitchen, actually! Oof! The options are endless! And then I grow up and then I go into co-living. Choice would be what my building or neighborhood would look like.
Eric Jaffe: Thank you for listening to City of the Future, a podcast from Sidewalk Labs. Your hosts are Vanessa Quirk and me, Eric Jaffe. We are produced by Benjamen Walker and Andrew Callaway.
Vanessa Quirk: Mix is by Zach Mcnees. And a special thanks to all those who contributed to this episode: Hasier Larrea, Eric Bunge, Jon Dishotsky, Don Row, Annie Koo, and Johanna Greenbaum.
Eric Jaffe: Our art is by the great Tim Kau. Our music is composed by Adaam James Levin-Areddy. If you want to hear more of Adaam’s work, you can check out his band, Lost Amsterdam.
Eric Jaffe: See you in the future.
Vanessa Quirk: Bye!
September 13, 2019