How To Design an Apartment Project That Isn't Spreadsheet-Driven

According to Andy Peters at CoStar News, "Drive through almost any city with recent commercial development and you’re bound to see an apartment building that looks just like another one you passed a half-mile back.

The reason why so many apartment buildings look the same often comes down to the bottom line, according to architects who specialize in multifamily work. It’s typically cheaper and faster to use a design prototype instead of creating a new one from scratch. Pressures to include affordable units and sustainable features can add to costs, leading to cutting expenses elsewhere, such as the aesthetic design.

Some multifamily properties do get built that don’t look like all the rest. Architects who designed these buildings say it requires at least one of several variables to make this happen, with location and the developer’s willingness to splurge being two major factors. An architect’s ability to be persuasive is also frequently cited as a requirement.

“Clients that don’t come to the table with a vision, it’s up to architects to prove their worth,” Brian Ward, principal and director of design at Niles Bolton Associates, told CoStar News. “Otherwise, it becomes spreadsheet-driven and nobody wins then.”

Architects and developers who specialize in multifamily real estate discussed with CoStar News the obstacles to getting final approval for innovative designs, examples of projects that made it to completion and ways to push the envelope in terms of aesthetics.

Reflect Landscape

High costs and the potential for community pushback can deter multifamily design, so architects need to work within the confines of what for-profit developers and the neighborhood will accept, said Pieter Berger, a principal at MVE & Partners.

For example, Post House South, designed by MVE & Partners at the Post District Residences in Salt Lake City, is resolutely not a cookie-cutter apartment building, Berger told CoStar News.

The building forms a diamond shape at its peak, designed to evoke the Wasatch Mountains range on the horizon of Salt Lake City. Earth-hued colors were used as an additional way to reflect the Utah landscape. Windows are placed in asymmetric patterns to further highlight Post House South’s appearance as different from its neighbors.

The Post District’s developers — Lowe Property Group, Blaser Ventures and Bridge Investment Group — knew that making a splash was important because of the property’s location, Berger said.

“It’s in a part of Salt Lake City that serves as the front door of the city,” Berger told CoStar News. “Our client realized that it was a huge opportunity to make a statement.”

The Post House South development also benefited from its location in a federal "opportunity zone," qualifying it for special tax credits. Most multifamily projects don’t have that level of financial help, Berger said.

But Berger's company, MVE & Partners, has created innovative designs for other apartment developments with strict budgetary requirements.

“You can still create quality design with a low budget,” Berger said. “You can isolate a certain design moment and say it’s going to be the main focus, but then on the remaining 90% of the project you have to be really careful with the costs.”

It can sometimes be as simple as breaking up the flat, unadorned surfaces of exterior walls, said Ward with Niles Bolton Associates. Trellis House in Washington, D.C., designed by Niles Bolton Associates for Jacksonville, Florida-based developer client Rise, has embedded balconies and windows of various widths, depths and heights on the side facing Sherman Avenue.

“Architects should play with solids and voids and transparency in their compositions and the results will be anything but monotonous,” Ward said.

A site's topography can also inspire the design, according to Handel Architects. The New York-based firm designed the planned 1800 Avenue at Port Imperial Way complex in Weehawken, New Jersey, for client WHK Development with curved corners to mimic the "geometry of the riverfront site and the Hudson River itself," according to a project description. The buildings are perched on the New Jersey Palisades with a dramatic view of Manhattan.

Rent Growth, Affordability

Multifamily developers enjoyed a surge of rent growth starting in 2021 before the market cooled in early 2022, according to CoStar data. Higher rents led the Biden administration to propose a cap on apartment rent increases, but rental property trade groups have aggressively opposed the measure, and its status is uncertain.

Rent growth, however, can push potential tenants out of certain buildings, Chris Fletcher, executive vice president of development at multifamily investor and developer Cortland, told CoStar News. Developers are under pressure from elected officials and housing advocacy groups like the National Low Income Housing Coalition to create more units that are affordable to more people.

The addition of affordable units can cut into the profits of the developer because federal and local tax subsidies sometimes aren’t enough to offset the inability to charge market-rate rents. Some of the first budget items that get chopped are features like decorative arches and extra windows, Fletcher said.

"A lot of people say let’s subsidize it to get more affordable housing," Fletcher said. But even with subsidies, “It’s still not affordable to lots of people. We still have the structural challenge that housing is expensive to supply.”

But architects at KTGY often design multifamily properties in areas with strict requirements on affordable units, including the San Francisco Bay Area, Denver and Los Angeles, said Jessica Musick, a principal in the firm’s office in Oakland, California.

“In Oakland, we don’t do a project that doesn’t have some affordable component to it,” Musick told CoStar News. “It’s a substantial cost for our projects and it gets factored into the budget, so we have to be super creative and intentional with our design dollars.”

The proposed student housing property at 2587 Telegraph Ave. in Berkeley, California, was designed with projecting bay windows and recessed balconies to create texture on the building’s street-facing side. Exterior surfaces are etched with grooves and ridges to provide further textural detail.

Those design features added to the cost, but KTGY compensated by creating an interior layout to provide units that can house up to 14 students. Allowing more residents to live in the same unit lowers rent for each resident, Musick said.

“Our mindset is to look for the design opportunities within a specific site and for that particular client, to really bring some personality to it,” Musick said.

KTGY designed 2587 Telegraph for its developer client, Gilbane. The project is under construction, and the developer has not disclosed a projected completion date.

Local Rules

Some of the sameness in multifamily design is a function of local governments dictating a uniform style throughout their jurisdictions, such as height restrictions, said Cortland’s Fletcher. As a result, thousands of multifamily buildings range between four and six stories.

“Restrictions on density inadvertently contributes to less-interesting design,” Fletcher said. “If you could go 10 stories tall, then the math generally works more to your benefit. But if the community will only let you build five stories, it’s less efficient and we have to cut costs elsewhere to make up for it.”

Multifamily developers can be reluctant to try a new approach out of fear that a local design review board will reject the proposal, said Ward at Niles Bolton. A developer must then go back to the drawing board, lengthening the process and raising costs.

But design review boards also have legitimate concerns in many cases, Ward said.

“You could say, rightfully, that they don’t want just anything going up” in their communities, Ward said.

Humphreys & Partners Architects, a Dallas firm that specializes in multifamily design, has developed a range of prototypes to help developers maximize financial investments while providing certainty they’ll be approved by local design boards. The Crossings student housing complex in Sacramento, California, owned by Property Income Advisors, uses Humphreys & Partners' E-Urban design prototype.

It's not always necessary to have a template on hand to get a project approved by local review boards, according to KTGY.

KTGY’s design for 1185 Sunset in Los Angeles for client Aragon Properties has a collection of boxes stacked in asymmetric patterns squeezed into a narrow corner lot. The use of different types of materials on the exterior — fiber cement siding, stucco, metal accents and concrete finishes — further distinguishes the design. The project is under construction.

Designing for Residents

Architects looking to work within a budget still want their buildings to look good.

The 356-unit ChampionsGate in Davenport, Florida, takes cues from the Spanish Colonial Revival style of architect Addison Mizner, said Cortland’s Fletcher. Cortland had the freedom to give the project some design flair because it’s located in the far suburbs of Orlando in an area with moderately priced rents.

ChampionsGate “is how you design something that’s beautiful but you’re not shooting for rents that are unaffordable for the area,” Fletcher said.

The Prescott in Austin, Texas, has balconies, a multicolored exterior and a small amount of limestone cladding on the building corners. But it nevertheless resembles other apartment buildings.

The in-house architects at developer Richman Group, however, took great pains to maintain a high level of quality in the design, Maria Consuelo Sanchez, vice president of development, told CoStar News. One example is that most rooms have a view of a surrounding park, she said.

“We wanted to embrace the nature in the park,” Sanchez told CoStar News. “When you are in the units, you see the canopy at eye-level.”

Richman Group’s apartments and condos are designed with the residents in mind, not the general public, Sanchez said. Residents see the interiors more often than the exterior, so Richman Group concentrates on making the inside spaces look their best.

“We want to make sure that the space is conducive to a good quality of life,” Sanchez said. “We always think about how it feels when you are in that space. Do you have enough light? What are you seeing when you are in your living room?”

She added, “Our focus is on where people are going to be sleeping, sitting, dining or cooking."

The trend toward more uniform, cost-efficient apartment complex designs has implications for property taxes across the nation. As developers increasingly prioritize efficiency and profitability by using design prototypes, local governments may see changes in how these properties are assessed and taxed.

1. Impact on Property Valuations:

When developers opt for cost-effective, standardized designs, the overall valuation of these properties may be lower compared to more unique, architecturally innovative buildings. This could potentially result in lower property tax revenues for municipalities, particularly in areas where property taxes are a significant source of funding for public services.

Conversely, even these more standardized buildings might still be valued higher due to their ability to maximize the use of land (e.g., fitting more units into a given space). In markets with high demand for housing, the overall valuation might still be robust despite the simpler designs.

2. Affordable Housing Components:

As developers include affordable units in their projects, often a requirement in many cities, the profitability of these developments can be squeezed, which could influence property valuations and, by extension, tax revenues. Properties with a significant portion of affordable units might be assessed at a lower value because of the reduced income potential, leading to lower property taxes.

However, the presence of affordable housing can sometimes lead to special tax assessments or credits that reduce the property tax burden for developers, which can also lower overall tax revenues for local governments.

3. Location and Design Incentives:

The use of special tax credits or incentives, such as those for developments in federal "opportunity zones," can also affect property taxes. While these incentives are designed to spur development in underinvested areas, they can lead to reduced property tax collections in the short term, even if they encourage long-term growth.

High-profile, architecturally distinct projects like the Post House South in Salt Lake City, which benefit from such incentives, might set a precedent for other developers to seek similar arrangements, potentially reducing property taxes on new developments in these areas.

4. Design Restrictions and Community Standards:

Local design restrictions, like height limitations or mandated architectural styles, can also impact property taxes. In areas where these restrictions limit the profitability of developments (e.g., by capping the number of units or requiring expensive design elements), the resulting lower property values could lead to reduced property tax revenues.

However, in some cases, these restrictions might ensure that properties retain higher valuations due to their aesthetic appeal and desirability, particularly in affluent areas, potentially maintaining or even increasing property tax revenues.

5. Economic Pressures on Developers and Municipalities:

The economic pressures on developers to cut costs and streamline designs could lead to a broader trend of more uniformly valued properties within a jurisdiction. This could simplify property tax assessments but might also lead to less variation in tax revenues.

If this trend results in a surplus of similar-looking, cost-effective apartment buildings, it might lead to market saturation, particularly in certain regions, potentially depressing property values and reducing tax revenues.

Overall, this trend of standardized apartment complex design could have a complex and varied impact on property taxes across the nation, influenced by local market conditions, government incentives, and the balance between affordability and architectural innovation.