‘Windowless units’ open the door to debate

Walter Parks's Shockoe Bottom project.

Walter Parks’s Shockoe Bottom project.

Walter Parks hit a roadblock last month at City Hall.

The Richmond architect, who has worked on dozens of historic rehab developments, stood and watched as the city’s planning commission voted down his 13-unit apartment conversion project in Shockoe Bottom by a 6-2 vote.

The issue: Windows.

Specifically, the commission didn’t like that two of the apartments would not have eye-level windows.

“The apartments had windows, but what we had to decide was do windows or skylights 12 to 14 feet up in the air count?” said planning commission member and landscape architect Doug Cole, who voted in favor of Parks’s project.

Parks’s run-in with the planning commission was precipitated by the adoption last year of a three-page position paper that says residential projects seeking approval from the planning commission – or almost every historic conversion project – must have windows that open onto the street. Apartments without a traditional window have been dubbed “windowless units” by their detractors.

Developers target for rehabilitation old buildings that are eligible for historic tax credits to offset their costs. But to get the incentives, they consent to restrictions on how much a building can be altered. Because projects require a certain number of units to ensure profitability, developers have turned to architectural designs that allow daylight to enter the units but do not meet the traditional definition of a window.

The planning commission is concerned that when trends change or the market becomes saturated, projects with a large number of windowless units will be the least desirable and the first to fail, potentially leading to blight.

The commission’s new position comes as the use of such units has become more common in warehouses in Scott’s Addition, Manchester and Shockoe Bottom as the stock of tax-credit-eligible buildings dwindles.

Since 2007, the commission has approved 232 residential units that do not have exterior windows, according to city records.

Local developers say the policy shift, as well as increased scrutiny from authorities that issue tax credits, threatens the future of tax credit development in the city.

‘They are substandard units’

Dave Johannas, head of architecture firm Johannas Design Group and a member of the planning commission who was one of driving forces behind its window resolution, worries about the long term.

“The development of these windowless units in Richmond has come about in the past 10 years, and we’ve all come to just accept it as normal,” Johannas said. “I was trained not to do that in architecture. If you have apartments in a building with windows you can’t see out of, they are substandard units.”

Johannas said the chase for more tax credits should not jeopardize the need for property to be developed responsibly.

“When the market is saturated, the first units that are not going to be rented are units that suck,” he said. “And the units that don’t have windows are at the bottom of that list. We have a responsibility to prevent the future slum dwellings of Richmond where we can.”

Architectural back-flips

Developers say the market – not City Hall – should decide what gets built.

“The buildings we are talking about here are never going to be warehouses again,” said Tom Papa of Fountainhead Properties. “Nobody else, besides apartment developers, has figured out what to do with these things. Unless common sense prevails here, it will single-handedly bring down the program in Richmond.”

Fountainhead’s projects at South Canal and the former Miller Manufacturing sites will have apartments with indirect light, Papa said.

Both sides agree that the state and federal tax credit programs, run by the Virginia Department of Historic Resources and the National Parks Service, have had an enormous and positive impact on Richmond. According to DHR records, 972 rehab projects in the city valued at more than $1.5 billion have received state tax credits since the program’s inception in 1997.

3200 Clay Street

The project at 3200 Clay Street.

The problem is that most of the eligible historic buildings in Richmond where windows weren’t an issue have already been converted into apartments. What’s left are buildings like 3200 Clay St. in Scott’s Addition: A large, city-block-size warehouse old enough to qualify for credits but too big to give every apartment an exterior window within the financial confines of the project.

The issue comes down to how much profit a developer can squeeze out of a conversion, which is expensive to being with.

“If [warehouse] owners are going to charge $30 to $40 per square foot for the [undeveloped] buildings, I need 80 to 90 percent of it to be leasable space,” said David Gammino, owner of development and construction company City & Guilds. “For some of these buildings in Scott’s Addition and Manchester, if you can’t do these interior units, that goes down to 60 percent, and it’s just not worth it anymore.”

An interior "windowless unit" in a Walter Parks project. (Courtesy of Walter Parks)

A hallway lit with a skylight in a Walter Parks project. (Courtesy of Walter Parks)

Developer Tom Wilkinson called in Walter Parks to design 3200 Clay. The end result: more than half of the 139 apartments did not have exterior windows.

Parks has pioneered these kinds of interior units by doing architectural back-flips to get light in from the outside without the use of traditional windows. Parks uses light wells, atriums and skylights, which might not offer a view of the street but bring in sunlight.

“To have a viable project, you have to have to create a good place to live,” Parks said. “And for that you have to bring in light. But with these massive buildings you have to be creative about how you get that light in.

“The last thing we want to do is create dungeons. Nobody would want to live there,” Parks said.

The special use permit for the Clay Street project was approved in February 2012 with Doug Cole being the lone dissenting vote. But for some in the planning commission, 3200 Clay was a turning point. Four months later, in June, the commission adopted its new policy against units with no exterior windows.

The definition of a “window” also comes into play.

“There is no definition of ‘window’ in the international building code, but if you just Google it, the definition that comes back is an opening in a wall or ceiling that lets in light and/or air,” said Tom Papa of Fountainhead. “And, by that definition, all these apartments have windows.”

Mark Olinger, head of the city’s planning department, said tax credits should not be the only reason a building is developed.

“There are some people who say, ‘Why is the city doing this when the developer is taking all the risk,’” he said. “Up front, that’s true. But somewhere down the road, the developer will not be in that project. And if that project goes sideways because it’s not marketable, it’s a significant risk.”

‘What else do you do with them?’

Despite the planning commission’s stance against windowless units, its recommendations aren’t the final word on any given project.

Two weeks after the planning commission rejected Walter Parks’s Shockoe Bottom project at 18th and Franklin streets, City Council approved it.

“There are some [projects] that are just clear violations of planning’s position statement and no further discussion is necessary,” said Charles Samuels, the City Council president. “There are other cases, as in this case, it may technically violate the language of the position statement but it would be better for the city if it moves forward.

“I think each case deserves to be heard on its merits. City Council is not just going to be a rubber stamp.”

Olinger said that he was sympathetic to the developers’ concerns about the tax credit programs limiting their ability to alter buildings and that the city is in contact with the state and federal government about those issues.

For Parks, whose project was the first to test the new resolution, the issue boils down what the tax credit program was always intended to be.

“Those buildings – the warehouses and factories – they are part of the fabric of this city, and they should be preserved,” he said. “I love the old industrial look and feel. So really the question becomes, what else do you do with them? Throw them out? I think that would be a shame.”

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24 Comments on "‘Windowless units’ open the door to debate"

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Beth
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Any planning commissioner who approves a project without functional windows needs to be replaced. I think it’s telling that the one who approved unlivable apartments for a developer has his salary paid for by developers. He should have recused himself rather than vote in favor of his future clients.

mortgagemark
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Hear Hear!

Doug
Guest
Well Beth, you bring up an interesting point. I always enjoy the public hearing portion of the Planning Commission, whether in person or on blogs. The one planning commissioner you refer to (me) was also the ONLY one on the Planning Commission who voted against the project in Scott’s Addition (where there were dozens of windowless units). So I guess we ALL need to be replaced. There are a couple of Planning Commission members whose term is expiring if you would like to consider filing the void. Interestingly, I was also the one who started the resolution to prohibit windowless… Read more »
david gammino
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My comment to Bizsense as reported is inaccurate. I indicated that current shell building valuation would decline if the net leasable space declines. The current attribution seems to indicate that I feel development “won’t be worth it” because of this policy. That is not my belief.

mortgagemark
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“tax credits should not be the only reason a building is developed.” “To have a viable project, you have to have to create a good place to live,” If you have apartments in a building with windows you can’t see out of, they are substandard units.” …….Quotes above sum it up for me. Seems like the bottom line is…….. so long as DHR prohibits the creation of new windows to accomodate freshly- created residential space in formerly windowless industrial buildings, these buildings are probably not good choices as tax credit projects. Without the benefit of potential tax credits, the acquisition… Read more »
Bruce Milam
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There are a lot of good points made in this article by very astute professionals with divergent opinions. Not every old building in the old warehouse districts like Shockoe Bottom and Scott’s Addition are applicable to conversion to apartments. Developers will argue that government should allow the market to determine what works and what doesn’t and that’s fine provided the driving factor in the conversion isn’t the tax credit. If the demand is strong enough, then convert the building to a useable apartment without the tax credits by cutting windows where they need to be and insulating the interior better… Read more »
Carter
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Williamsburg, Brooklyn and SOHO in Manhattan are great examples of what former industrial neighborhoods can look like as vibrant residential communities. Both are filled with converted warehouses, 6 story walk-ups and other commercial structures that have unique zoning and building plan issues like lighting, parking, etc. Many have air shafts, light wells and sky-lights. And yet, they make really cool and diverse living spaces.

Hugh
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Reminder: Price is a factor in the desirability of a unit. If Unit A has traditional windows and rents for $x, while Unit B has indirect light and rents for 75% of $x, Unit B might better fit the needs of a particular resident. Moreover, the concern about future blight is a canard. If/when the market gets saturated, two-bedroom units with just one bath will be less desirable that 2/2’s. Should Planning disallow those? And units with formica will be less desirable than those with granite? Should Planning dictate the finish level for new apartments? Where does the meddling end?
Dillon
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The state has adopted the building code and made it uniform throughout the state so that each locality doesn’t create their own set of rules.
The code permits windowless units. As for DHR policy, more often than not, its the footprint of older buildings that creates the issue, not tax credits.
Typically when a locality wants to supersede the building code to encourage good development behavior (like sustainable design), they offer development incentives. Maybe the City can come up with something to incentivize interior courtyards that isn’t a rewrite of the adopted code…..

Vicki
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In residential appraisal considerations, a window for egress is weighed. Perhaps the developers should give some consideration to the safety factors when developing residential units. For example, in a basement with mulitple “rooms” without windows, that space is not allowed to be called a bedroom without windows for egress. Seems like someone in a “unit” might have the same considerations. Just a thought.

SLC
Guest
My faith has been restored, if only tenuously, in the planning commissioner after reading this change of tact regarding “windowless units” As the article so well states: “The planning commission is concerned that when trends change or the market becomes saturated, projects with a large number of windowless units will be the least desirable and the first to fail, potentially leading to blight.” I couldn’t agree more and am dismayed at how this was allowed in the first place? Richmond is not NYC (even they probably have windows) and the cost of land is not such that there is a… Read more »
Bruce Anderson
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This is madness. Apartments with no windows? Four and five story apartment buildings built with cheap wood framing? What are we doing to this city? Richmond has come a long way in the past ten years, but handing over the keys to the city to a group of developers committed to building the cheapest, most minimally acceptable rental housing is shameful. These buildings may look nice and lease up fast when brand new, but as others have mentioned, when the supply reaches saturation, the first to stand vacant will be the lowest quality. In ten or fifteen years, we will… Read more »
Tom Wilkinson
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Let’s at least get the facts right. The 3200 West Clay project has zero units that do not have natural light. As Carter pointed out in his comment, there are lots of buildings in other cities (and Richmond) like New York that provide natural light in multiple ways. Another fact that’s pertinent is that some people don’t like exterior windows. Our properties typically have a mixture of units, some with exterior windows and some that obtain their light in other ways. We’ve done the analysis and there are no differences in the percentage of the units that are occupied, and… Read more »
Jamie Smith
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Tom, I am extremely curious about the actual safety of said units that receive nothing more than natural light (from who knows where). If there is a fire, and ther front door is blocked, how do people get out? To me, it would seem illegal to have a sine way out of these units. Is there another exit door or something? Fire suppression shouldn’t be enough, people need to get out. If you have a small peep hole of a skylight 18 feet over someone’s head for “natural light”, what good will it do you if you can’t escape from… Read more »
Bruce Anderson
Guest

Let’s be sure we understand whose capital is at risk here. When developers use historic tax credits for financing, they’re using the public’s money, and that increases their obligation to supply a top quality product.

Stuart
Guest

“The buildings we are talking about here are never going to be warehouses again,” said Tom Papa
*****
Sure they are, we are warehousing people in them!

Frances Massey
Guest

As a tax payer whose money is being used to support these projects does no one think windows are necessary for health reasons and/or safety reasons?

Kevin
Guest

The one opinion that doesn’t seem to matter in this debate is the opinion of the market. In fact, the market should be the most important factor. Does anyone think a developer is going to develop a project, investing millions of their own dollars, expecting it to fail. When government substitutes its opinion for market forces, problems aren’t far behind.

Shelly
Guest

agreed

Jay
Guest

Well in many of these cases, the market has already been distorted by goverment money (historic tax credits) that encourages developers to tackle projects that would not normally be financially viable otherwise.

When there’s government money at risk, then it’s important that we consider the long term viability of these types of projects.

Bruce Anderson
Guest

In many of these cases, developers are able to go in to a project with little or none of their own money. That’s because lenders view the historic preservation tax credits as the owner’s equity. The developers who take advantage of these structures and then argue that the government should not involve itself in setting high standards for development are being just a little too cute. They are after all playing with the house’s money.

Butter
Guest

How about turning these warehouses back into job centers so people have a way to pay the rent. America is turning into a great place to live, but no where to work. Cyprus anyone?

jd
Guest

Kevin — Yes, developers frequently build inventory that the market doesn’t want. The ability to get 100% financing on a project or just pledging the tax credits as collateral, there is little for them to lose personally. And this doesn’t stop at apartments, think of all subdivisions and single-family lots that were developed in 2005-2007 that many banks are still holding post forclosure. Sure, banks were to blame for loosening their lending standars. That was the fallout from the housing bubble, these developments are the precursor to the apartment bubble.

Doctor W
Guest
Looks likes the real issue is that they can not add new windows if they want the tax credits. I don’t see why they can’t just put in new windows and get the Tax credit. Lets get real, every industry has its own masked government subsidy to help it out. Its nice to preserve old buildings, but It sounds like they take the historic aspect too seriously. “972 rehab projects in the city valued at more than $1.5 billion have received state tax credits since the program’s inception in 1997.” Richmond needs to build Real Estate Capital in the City… Read more »
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