-RUN mkdir -p /var/lib/arvados
-RUN echo "production" > /var/lib/arvados/api_rails_env
-RUN echo "production" > /var/lib/arvados/sso_rails_env
-RUN echo "production" > /var/lib/arvados/workbench_rails_env
+RUN mkdir -p $ARVADOS_CONTAINER_PATH
+RUN echo "production" > $ARVADOS_CONTAINER_PATH/api_rails_env
+RUN echo "production" > $ARVADOS_CONTAINER_PATH/workbench_rails_env
+
+# for the federation tests, the dev server watches a lot of files,
+# and we run three instances of the docker container. Bump up the
+# inotify limit from 8192, to avoid errors like
+# events.js:183
+# throw er; // Unhandled 'error' event
+# ^
+#
+# Error: watch /usr/src/workbench2/public ENOSPC
+# cf. https://github.com/facebook/jest/issues/3254
+RUN echo fs.inotify.max_user_watches=524288 >> /etc/sysctl.conf