One of the most interesting talks that I attended while I was in graduate school at Penn was by John Maeda. 

John operates at the intersection of design, technology, and business, and I find his work fascinating. He’s probably best described as a graphic designer, visual artist, computer scientist, academic, and author. And when I heard him speak in 2008, he was also President of the Rhode Island School of Design.

More recently though, John has entered the world of venture capital by becoming a “Design Partner” at Kleiner Perkins Caufield & Byers (KPCB) in Silicon Valley. But what’s really interesting about this move is that when he joined KPCB in January 2014, he was the first designer to arrive on Silicon Valley’s legendary Sand Hill Road. No other VC firm had a designer in-house.

And that’s because design hasn’t, at least historically, been considered that important. In fact, in some cases it was seen as being detrimental. Brian Chesky – cofounder of Airbnb – has gone on record saying that when they were first starting out, Silicon Valley didn’t think that a bunch of designers from RISD could build and run a company. Boy were they wrong.

So that’s changing. As of this month (March 2015), there are now 6 other designers on Sand Hill Road. The venture capital community has seemingly woken up to the value of great design.

John Maeda has branded this shift, #DesignInTech. And he recently gave a presentation on the topic at SXSW. It’s a great read, particularly if you’re somebody who cares about design. Click here if you can’t see it below.

//www.slideshare.net/fullscreen/kleinerperkins/design-in-tech-report-2015

Design in Tech Report 2015 from Kleiner Perkins Caufield & Byers

Recently Priceonomics posted a piece on San Francisco’s “rent explosion.” In it, was the infographic above showing the median rental rate for a 1 bedroom apartment in the city. The most obvious takeaway is that San Francisco is real expensive. In the core of the city, you’re easily looking at $3,000 per month.

That is with one exception: the Tenderloin (the green area just northwest of SOMA in downtown). The first time I ever visited San Francisco, I actually stayed on the outskirts of this area, which is a neighborhood well known for seediness, homelessness, crime, drug trade, strip clubs, and so on. And it was actually named after a similar neighborhood in New York that was also a center of vice in the late 19th and early 20th centuries.

But when I saw this diagram, I immediately asked myself: How could it be that the Tenderloin was holding out so well against the forces of gentrification? How is this island of seediness being preserved in the center of downtown? Particularly in a city like San Francisco where there’s a perpetual housing supply shortage and lots of wealth. The Tenderloin has some of the lowest rents in the city.

So I tweeted the good folks at Priceonomics and they responded with this article. It’s a few pages long, but the reasoning seems to come down to the following: active community groups that fought to keep developers out of the area (and that also own many of the buildings), downzoning, and a high percentage of rooming houses. According to that same article, the Tenderloin contains approximately 100 single room occupancy residential hotels (or SRO’s as they’re called). These were initially built to house the city’s transient and seasonal population after the great fire of 1906.

So it would appear that there are some significant barriers to entry.

But at the same time, it generally seems like a bad idea to concentrate poverty, homelessness, drug users, and so on. Interestingly enough, the article talks about how when the Bay Area’s transit system went on strike for a period of time, the supply of drugs actually dried up in the Tenderloin. This underscores how regional the drug business is, but also makes me think that dealers are almost surely benefiting from the clustering of their client base.

In any event, this is a much larger problem than just a real estate development one. I don’t know what the solution should be, but I’m pretty sure that things are being made worse by concentrating everything in one neighborhood and by rising income inequality in the city. Inequality seems to lead to all kinds of negative externalities and, from my experience, mixed-income neighborhoods perform better than 100% poor ones.

Earlier this week Fast Company ran a piece talking about “the next big thing in urban planning” – backyard cottages. As the name suggests, backyard cottages are basically accessory dwellings built in the backyards of existing single family homes. And the idea is that they’ll provide new affordable housing options in competitive and supply constrained markets such as the Bay Area in California.

While somewhat different than laneway housing–which you probably know I support here in Toronto–they do share many similarities. We’re talking about the intensification of our residential neighborhoods at the scale of the single family home. And the potential benefits go beyond just affordability. It would also make our communities more sustainable, more walkable, and more conducive to transit.

But there are challenges. I don’t know about the Bay Area, but many municipalities don’t allow a “house behind a house” and many communities don’t want to see their neighborhood itensify. However, we are seeing companies, like New Avenue, emerge to help homeowners navigate the process of building a backyard cottage. This company in particular claims to have worked with over 90 homeowners. 

So I think we’re going to see more, not less, of these types of housing solutions. Vancouver is already doing it. And so is Portland. 

Now here’s a question for you. If you owned a house in a single family neighborhood, would you be fussed if your neighbor erected a backyard cottage or laneway house? I’d love to get your opinion. Let me know in the comment section below.

Image: New Avenue