It was a sunny, if a bit windy, Saturday afternoon. My wife, mother in-law, and Ergo’d baby were finishing up a relaxing walk along Humboldt Avenue and I noticed a house had been recently renovated.
3330 Humboldt Ave. South in pre-renovation state. (Click image for link to more pictures)
It struck me because my wife and I had toured this exact house about a year ago. 3330 Humboldt Ave. South wasn’t in great shape; while not “dilapidated,” the signs of wear and age from being rented out were definitely showing. However, it’s a great lot in a desirable neighborhood mere minutes from the lake, Uptown, transit, etc. It now has new siding, windows, a new porch, and I can only assume nice finishes on the inside plus probably central AC. It sold for $307,000 after sitting on the market for quite a while, and my guess is it will sell for $500,000 or more.
The Need for Small Scale Infill
I’ve been wondering why we don’t see more small-scale infill within neighborhoods. 3330 Humboldt struck me as the perfect opportunity to densify – relatively cheap land owing to building depreciation, small apartments nearby setting precedent, and high housing price pressures owing to the proximity to many amenities. Instead of replacing 3-4 low-rent bedrooms with potentially 10-15, we’re getting a house only an upper crust family can afford. Don’t get me wrong, I love families and all (if we had more money maybe we would have been those renovators!), but this is a missed opportunity.
The Minneapolis Comprehensive Plan mostly calls for dense, mixed-use development along commercial corridors, and we see zoning that matches that goal. I don’t think this is a wise strategy – there is limited land abutting these corridors, and many have a mix of rentals and multiple retail or commercial tenants that make lot assembly and redevelopment very difficult. Besides, not everyone wants to live on busy streets like Hennepin or Chicago or Central. The same reasons families seek out inner neighborhood lots also apply to the #millennials everyone is so eager to attract. While the newly adopted ADU ordinance will go a long way to open the door to incremental, affordable density in neighborhood cores, it’s not sufficient.
Plus, central neighborhoods represented by the East Calhoun Community Organization (ECCO), Calhoun Area Residents Action Group (CARAG) and Lowery Hill East Neighborhood Association (the Wedge) are already riddled with small apartment buildings, oftentimes on a single Minneapolis lot (~40 ft x 128 ft). I grabbed a few Google Streetview examples plus one from just across the street from my own home to illustrate:
These buildings are 2 to 3 stories with a garden level for an extra unit or two, laundry, bike storage, etc. There are usually 4-5 surface parking spaces against the alley, though some have detached garages. Sometimes these are condos, more frequently apartments with a mix of 1 and 2 bedrooms.
I would say that, generally, this is the type of density people would like to see. Linden Crossing was hotly contested over its perceived bulk at 3 full stories with a fourth set back a bit. The Frank-Lyn proposal received its share of criticism last year due to bulk, height, etc as well. While I supported both of those projects (with perhaps a few minor tweaks to the latter), I agree with many that smaller-scale structures do a better job of providing visual interest and are less hulking (though sometimes I like that), while still providing ample density.
Single lot development is important. It’s a small-scale process, meaning more local developers* (rather than national, publicly-traded ones) can take part. Profitable single lot development also bypasses the timely and costly process of lot assemblage with the city. Finally, it adds competition so landowners don’t hold out for combined offers on combined lots. So, can it be done?
Change the Zoning
Click to embiggen.
Unfortunately, the Minneapolis zoning codes make it illegal to build the housing currently found in our neighborhoods. The image below shows a few South Minneapolis ‘hoods and their zoning. It’s easy to spot the small apartments in R3 or lower districts by the white roofs (right). In the Wedge, this was the result of a decades-old fight to downzone a solid chunk of the neighborhood. I’m no historian so I’ll leave it to commenters to give context in other neighborhoods.
The zoning is basically saying neighborhoods simply can’t sustain the intensity we know they actually can. ECCO has half the population density of CARAG despite being closer to Lake Calhoun and equally served by transit options. I have no doubt that zoning plays a big part in keeping it that way.
Using the example sites in the images above, we can compare existing buildings to what zoning currently allows:
Click table to enlarge
That’s a lot of non-conforming uses, Minneapolis. Even if we up-zoned vast swaths of neighborhoods to R4, many of these single-lot apartments would require variances. Obviously, the city grants variances and CUPs all the time, but if you’re trying to convince someone to park money in real property here in Minnesota as a form of investment rather than the global stock market, we want to remove as many sources of risk as possible.
Removing (or seriously lowering) parking minimums, easing setback requirements, bumping up allowed floor area ratios (FAR), and extending the maximum dwelling units per lot size exemption to R3 and R4 should all be on the table. As should up-zoning. We know neighborhoods won’t spontaneously combust if apartments creep into areas dominated by single family homes.
The Economics
Before reading on, go check out the inspiration for this post – Let’s Go LA’s take on making the classic LA Dingbat a reality again (also, read all the other posts). I borrowed (stole) the methodology for penciling out development costs to see if it’s even reasonable for the Twin Cities.
First, let me say that I’m no developer, so take the methodology with a grain of salt. If you assume you can get a standard lot for $200,000, drive down construction costs from the Minneapolis average of $160/sqft to ~$115/sqft, and sail through permitting with the city, we can get a rough idea of unit pricing in new construction matching these old single lot buildings.
A 3.5 story building with small 1 bedroom units:
…and the same sized building with 2 BR units:
Do you think a 460 sqft 1 BR apartment could rent for ~$900 a month in the Uptown area? Maybe folks might be turned away from only 4 surface parking stalls. Others might yearn for the amenities other new apartments provide. I’ll admit $1,750/mo (or a purchase price pushing $200k) for a 2BR unit in a stick-frame building seems like a hard sell. Maybe people would pay $600/mo for a 300 sqft efficiency apartment. It’s likely that even with looser zoning restrictions, we’d still see many large apartments that drive down wasted space per unit (hallways, lobbies, etc) and spread fixed costs over more units. That’s what makes the 2320 Colfax development by Michael Lander so impressive – 66% of parking in a garage, a mix of unit sizes, good urban frontage, all within the R6 requirements (admittedly much more generous than even R5) for a target of $1,000/mo for the 1BR units.
In any case, we should at least let these options play out. I’d welcome more of these low-impact apartments into my neighborhood if it meant an increase to the tax base and long-term housing affordability for more people. I guess, that’s preferable to letting unremarkable single family homes spiral up into the $500,000 range. Especially if we could move those unremarkable houses to other parts of the city that desperately need them.
*Let’s put “local” and “small” developers into perspective. They’re still going to be pretty rich. About the same as people we’ve named neighborhoods and streets and Facebook groups after.
