MHN Roundtable with KTGY Group

Three principals from KTGY Group speak to MHN about what they took from the NAHB Builders' Show and what they see happening on the cutting edge of design and development in the multifamily industry.

Three principals from architectural and planning firm KTGY Group participated at the NAHB Builders’ show in Palm Springs this year: Manny Gonzalez, AIA, LEED AP and principal; David Senden, principal; and Rohit Anand, AIA, NCARB and principal. The three of them speak to MHN about what they took from the event and what they see happening on the cutting edge of design and development in the multifamily industry.

MHN: Mr. Gonzalez and Mr. Anand participated in a panel discussion at the NAHB Builders’ Show that focused on design and construction in developing apartments and condos. What were some of the ideas being tossed around regarding maximizing density and cost savings?

Manny Gonzalez

Gonzalez: The largest single change in my opinion is what the Building Code will allow us to do today that we couldn’t do during the last run we had in multifamily development.  Today, you can have a single stair to three levels of walkup apartments instead of the old breezeway, which now not only improves the building’s efficiency and eliminates half of the stairs in a community, it can also allow for garden apartment densities approaching 40 units per acre.  The mixed-use portions of the code now allow us to build a wood parking garage instead of the concrete podium of the past.  Depending on the market and height restrictions, that change can also reduce construction costs dramatically.

Rohit Anand

Anand: Most of the new development we are seeing now in this new post recession cycle, which started in spring of 2010, is wood-frame buildings in urban areas. Wood-frame construction, in most parts of the country, offers significant cost savings over concrete, allowing for lower construction costs and a project to secure debt financing. Many of the wood buildings we are designing are five stories over a podium or wrap configuration allowing for a density of 125-180 units per acre.

MHN: How do these ideas differ from one sector of development to the next—for instance, urban versus suburban, affordable housing versus high-end?

Gonzalez: For the next several years, I am sure we will see apartments dominating the multifamily sector.  Developers will be pushing density and trying to maximize wood frame construction no matter what market they are in.  You will probably still see concrete podiums in urban areas and perhaps the wood podium, but I believe the most prevalent will be the “Urban Lite” product which will have the urban contemporary feel but stay within the walkup program.  I don’t think you will see much difference between the affordable and the mainstream market rate product other than unit mix. Driven by the tax credit formulas, the affordable program will still be more family-oriented while market rate is seeing a dramatic shift toward the “Renter Nation” of the Baby Boom Echos and a trend toward smaller units and studios, ones and twos.

Anand: The more urban locations demand a higher-density solution of over 100 units per acre versus the more suburban locations, which tend to range 25-50 units per acre. The key product  determinant is the parking solution. Underground or podium parking is typical in the higher density areas, tuck under or surface parking in the suburban areas. We are designing much smaller units in the urban areas, approximately 800-900 square feet, and close to 1,000 square feet in the suburban areas. The other key differentiator is the amenity areas. Amenities in the urban product are getting smaller, more open, and maximizing interaction focused on cafe and gaming spaces. The suburban product is more family-oriented centered around a swimming pool.

MHN: Transit-oriented and mixed-use developments are the wave of the future, but they involve a lot of moving parts. In working with anyone from architects to city councilmen, what does KTGY do differently now than it may have done five or 10 years ago?

Gonzalez: There is no substitute for experience in the multifamily market, especially when it comes to TODs and mixed-use.  Understanding the correct product type is critical when dealing with transit and the noise associated with it. The wrap product often becomes the best choice for TODs with the garage serving as a sound control device while helping achieve a higher density for that community.  Five years ago KTGY realized that mixed-use developments were going to be more than just sticking a Starbucks in the corner of the parking garage like planning departments were wanting us to do, so we set up a true Retail Team with experience in that product type since the viability of the retail has a huge impact on the success of the housing element.  This has enabled us to work with agencies to assure that the retail will in fact work whether it is on a small part of the overall scheme or a major part of the project like the Ralphs in the Market Lofts in downtown Los Angeles.

Anand: Getting projects, including TODs, entitled in urban areas now requires mounting a political campaign. First, a team consisting of experienced architects, land planners, land use attorneys, civil engineers, geo-technical, environmental, acoustic, historic, traffic and PR consultants. The projects require building a consensus between design review boards, planning commissions, city councils and, most importantly, neighborhood support. As a consequence, projects now take 3-5 years and very deep resources to get approved.

MHN: Mr. Senden has spoken about how younger couples and families are no longer purchasing homes to flip them, but are instead being picky about where they settle down. Does this same concept transfer over to apartments? How important are curb appeal and unique, contemporary design to young renters? What are they looking for? How are designs changing to accommodate these young renters?

David Senden

Senden: This thinking does not transfer over to apartments. In fact, renters are particularly transient and fickle and will move to the latest and greatest pretty quickly. It is pretty hard to lump all Gen Y renters together. We’ve been pretty intrigued by a small slice of this group that is choosing to delay marriage and children in order to live in urban, high intensity neighborhoods. We’re calling them the “dawdlers.”  It’s not a huge group, but for the first time their numbers have grown enough that they are a legitimate segment of the population and we can actually design for them. This group is pretty sophisticated about design and not only cares about it, but will pay for it. They’re looking for a place that is not like their parents’ homes and speaks to their progressive world views. They want their homes to be a reflection and extension of their lifestyle. They want a walkable neighborhood, restaurants and coffee shops at their doorstep, and funky contemporary aesthetic. All of this said, this is just one slice of that young group. There is still a group who couldn’t care less about design and will take anything as long as it fits their budget. Obviously, we’re less interested in them. We’re more interested in that group that reads Dwell magazine, watches HGTV and wants to live somewhere that shows it to the world.

MHN: What else came out of the Builders’ Show that would be of interest to our readers?

Gonzalez: I think flexibility is the key in any multifamily development these days.  Allowing the building and community to change and shift along with residents and their needs and desires. A variety of gathering spaces is important including outdoor living spaces and especially rooftop ones, if possible. The theater used to be a big feature in apartment communities, but now most residents have a large flat screen and streaming video. Those rooms have become gaming rooms today and they must adapt to tomorrow’s technology as well.  It wasn’t that long ago that running fiber optics to units was thought to be state-of-the-art.  Now if your potential resident doesn’t get “five bars” they are moving on to a community that does!

Anand: The renter is now looking for a different rental experience from 3 years ago. Development firms and their designers will need to consequently change the way they think about apartments and provide creative new solutions for the “Millennial Renter.”

Senden: With single-family home builders being the majority attendees at the show the mood was still rather somber. In stark contrast was the NMHC annual meeting held in Palm Springs this week which focused on apartments. The mood there could not have been better with some of the attendees downright giddy. It looks like the next 3-5 years will be awesome for the rental market, but it’s going to be tough sledding on the for-sale side.

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