[La Esquina in San Diego, All photos by Andrew van Leeuwen]
In the summer of 2019, BUILD traveled to San Diego to meet with Ted Smith, where we found him swinging a sledgehammer on the job site of his most recent project. Known as the father of architect-as-developer, Smith shared his edgy approach to housing, and offered a candid perspective into how he gets projects designed, permitted and built.
As an architect in San Diego, what prompted you to put on the developer hat?
In the early 80s, the interest rate rose to 20 percent – there was no work, I was losing my house and no new clients were calling – so, I found myself developing projects. I built a living unit for a friend on a lot I had purchased a few years earlier, just a little box, and I decided to keep working on it until I ran out of money. It was liberating. We put a roof on, placed some windows, and on the interior we added a toilet without any partitions around it. We passed the inspection and my friend moved in. Soon, twenty more of my friends wanted a little box to live in, and I realized I could fit more of them on the lot, so we purchased additional properties and accommodated them all over the next five years. That’s how it began.
How did the community react to these little boxes?
Back then, according to San Diego’s building code, you could only have one kitchen on a property like mine, so as I continued building little boxes, I designed them so they all accessed a shared kitchen in the center. There was a lot of opposition — zoning wars — a lot of hearings, and years of conflict. At the time, there was a case law ruling that stated that a family did not have to be blood-related, and there were no constraints on the size of a family, so the building department couldn’t put a limit on the number of bedrooms in a house. We stayed comfortably within the old definition of five unrelated adults constituting a family. Everything we were doing was legal but we still struggled with the NIMBYs. Eventually, a good thing came out of the experience: the project type was incorporated into the municipal code and they even use our invented name, GoHomes, and they are now a permitted use.
[The Essex in San Diego]
What is the downside of working traditionally as an architect for developers?
Lack of control and lack of payment for the extra work that innovative architecture requires. I found that developers only liked the buildings that were milquetoast, and that the designs they preferred had no heart. As an architect-developer, much more of the responsibility is on my shoulders; if I decide to build what the industry might consider a crazy design, there’s no one higher up the chain of command to prevent the exploration.
What’s an example of this?
For years we designed shared housing to reduce the parking requirements of the zoning ordinance and create real affordability. One parking stall is required for each living unit, but our units would actually contain four or even six suites. As a traditional architect you’d be hard pressed to recommend this strategy because you might get someone into trouble. But as the owner, architect, contractor and developer, you can take that gamble. Today, sharing a house is recognized as a legitimate affordable housing strategy and the idea is being replicated across the city.
[9th & Beech in San Diego designed with Kathleen McCormick]
How is San Diego doing at creating affordable housing in comparison with other cities?
There are some architects and builders in San Diego who have figured out how to bring good design to the budgets of typical affordable housing tax credit projects. Years ago, I started the Master in Real Estate Development (MRED) program at Woodbury University and our MRED faculty and alumni have proven that there is a small market of buyers who don’t care about everything that typical developers have said they should care about. Once some of these examples were proven to work, other developers followed suit. People are expecting better design in affordable housing today. While the physical design of affordable housing in San Diego is quite good, the tax credit projects require management fees and other expenses that actually make the projects more expensive to build. The developer gets a reduction of taxes on the building cost but soon discovers that the real expenditures are in the management of affordable housing—the tax credits do little to serve this aspect of a project.
The San Diego Architecture Foundation hosts an Orchids & Onions award ceremony each year where Orchids are given to exemplary projects, and Onions are assigned to those that miss an opportunity or create an eyesore. Has this improved the built environment?
My friends and I hate the Orchids & Onions event, so much so that we’re only proud if we get an Onion. Typically, the projects that get Onions are by architects who genuinely tried to do something innovative but didn’t quite pull it off. There’s a great building here in San Diego by Mike Burnett called the Eitol Towers. In 2018, Mike received an Onion for it because he clad it with red metal siding and it upset the community. When they announced the Onion award, everyone who hates the Orchids & Onions program gathered at the Eitol for a giant celebration and danced around the building. The Onions go to the architects who innovate.
What are you currently experimenting with as an architect-developer?
We’re developing a system where sweat equity in a project becomes an ownership investment. Many of the landowners we work with don’t know the development business well enough to build a project, so we put together a deal that combines their land asset with our time, expertise and work, and we break down the completed phases of a project into percentages owned. The entitlements and architectural fees might add up to a 30 percent investment in the project equity, and if we take on the contracting, it increases to 50 percent. Everyone working on the venture keeps a timesheet and their hours translate into a percentage of the ultimate profit. It’s like having a little annuity instead of a meager wage that is immediately spent. And from the landowner’s perspective, sweat equity becomes very attractive because they don’t have to gamble as much with the traditional development model. Most often, architecture fees are the biggest project expenditure and it’s all money that must be shelled out before the project is actually worth anything through the securing of entitlements. This is the current business model of the RED Office where we take the risk and control of the architecture.
Do your building models scale to different cities?
One of the missions of The RED Office is to be constantly trying new ideas in different places. This philosophy took us to Manhattan where we were part of an exhibit on micro loft housing at the Museum of the City of New York. We quickly realized that if you make your ceiling heights more than ten feet from floor to floor, as we do in San Diego, you lose several floors within the overall height of the building. This doesn’t pencil financially so we had to change our thinking. We found a tipping point at 21-feet from floor to floor where we were able to make a split-level intermediate floor, with a 7-foot height at one end and a 12-foot height at the other. This allows for a bed alcove above the bathroom, and you can achieve a much smaller floor plan that allows for more units within the footprint of the building, which is critical in New York.
Which of your space saving ideas is most controversial?
The collapsible bathroom. We figured out that the code doesn’t require a living unit to have walls around the toilet unless you have a kitchen. Since most of the units we design are for shared housing with multiple suites, the primary kitchen is located in only one of the suites, so the others can be open rooms with panels around the toilet that fold back to create more space when the bathroom is not in use. Some people see a lack of bathroom privacy as the trade off. We like the unusual space, and don’t mind the market share reduction.
When you bring a set of plans to the building department, are you overly scrutinized because of your reputation?
Yes. They definitely know who we are at the building department, but half of the people who work there are our friends. The other half are confused and work to impede us. We’ve also had three graduates from The RED Office who have gone on to work there, so we have these highly active, incredibly smart people in the planning department helping to guide our projects through the obstacles. I’ve been in my share of trouble with the city over the years, but I’ve also helped create many valuable ordinances in the process – so, the trouble has been worth getting things codified.
[First Avenue Building in San Diego]
Do you have any examples of stepping over the building code line that you regret?
After starting the MRED program, one of our students immediately began applying many of our strategies to projects. His neighbor complained when he made the primary bedroom vanity kitchenettes full kitchens, and I regret that I wasn’t clearer about the fact that we walk on the edge of legality when using these strategies. I don’t feel bad being a little bit on the edge myself, but I have to be really careful advising others to take those same risks. At the same time, if you’re not going to stick your neck out, as an architect or developer, you are always going to end up building the same stuff.
Who do you recommend we interview next?
Mike Burnett, the rock-star architect-builder who created the Eitol Tower, which received the Onion award. That building has the best public space that anyone has made in years here in San Diego. And of course Jonathan Segal, who’s a great architect. His buildings appeal to an upscale market that’s different than ours, but then his budgets include enough money to build apartments in concrete!
Ted Smith is a founding member and principal of the RED Office in San Diego. He also chairs Woodbury University’s Master in Real Estate Development program, which was designed for mid-career architects. Prior to the RED Office, Ted, along with long-term partner Kathleen McCormick, founded Smith and Others, a design-build-develop firm. He has completed dozens of development projects in San Diego, and has been instrumental, along with the MRED faculty, in pressing the boundaries to create new ordinances allowing housing innovation.