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City weighs parking rule for NW that could block a fifth of new homes

City weighs parking rule for NW that could block a fifth of new homes

~1950 Pettygrove.

The Tess O’Brien Apartments on NW 19th and Pettygrove, built with no on-site parking, are the largest project that would have been illegal under a proposal going before city council tomorrow.
(Photo: Ted Timmons)

Portland’s City Council will meet Wednesday to consider a new mandatory parking requirement that, if it had existed for the last eight years, would have illegalized 23 percent of the new housing supply in northwest Portland during the period.

The Tess O’Brien Apartments, a 126-unit project that starts pre-leasing next week and will offer some of the cheapest new market-rate housing in northwest Portland, couldn’t have been built if they’d been required to have 42 on-site parking spaces, its developer said in an interview.

“Do the math,” Martin Kehoe of Portland LEEDS Living said Friday. “The apartments at the Tess O’Brien are between $1250 and $1400 a month. If we were required to build parking, you’d be between $1800 and $2000 a month. … It probably just wouldn’t have been built. And then what’s that going to do to the existing project that’s out there and has been built? It’s just going to drive the rents of those up.”

Kehoe said the Tess O’Brien units, which average 330 square feet, are intended for people who don’t own cars.

“We’ve got free bike parking rooms, you’re a block off the bus, you’re a block off streetcar, you’ve got access to Uber whenever you want it,” he said. “People who move into these apartments … they don’t have cars.”

The proposal up for debate on Wednesday would apply the same rule to the Northwest District, immediately west of Interstate 405, that applies in other neighborhoods outside the central city: buildings with 31 to 40 homes would need at least one parking space for every five units. Buildings with 41 to 50 homes would need one space for every four units. Buildings with 51 or more homes would need one space for every three units.

Mandatory parking minimums would have driven up the construction cost of 305 new homes built in northwest Portland since 2008.

Including the Tess O’Brien Apartments, those mandatory parking minimums would have driven up the construction cost of 305 new homes built in northwest Portland since 2008, city data show, potentially by enough to kill the five new buildings in question. That’s 23 percent of the 1,339 units that were added to northwest by buildings of 10 or more units.

For comparison’s sake, if those 305 new no-parking homes were in a single building, it would have been the sixth largest built in Portland since at least 2000. The largest new building in the Lloyd District, for example, added 337 units to the city’s housing supply.

But most new homes in northwest Portland are in buildings where developers opted to build more than the minimum amount of parking, usually much more, suggesting that new no-parking buildings are a niche market in the Northwest District.

‘We certainly should have the option of no parking’

nw portland new units

Buildings marked in orange would have been illegal under the proposed new rule.
(Data: Bureau of Planning and Sustainability. Chart: BikePortland.)

Portland rental vacancy rates have been below 5 percent since 2008. Last year, monthly rent in the average apartment rose $100, with hikes concentrated mostly in older units. In April, the local Barry Apartment Construction Report saw housing supply finally keeping up with demand (a trend confirmed by May Census figures) but still not increasing fast enough for a significant rise in vacancies.

Local home purchase prices, too, have been rising at the fastest rates in the nation.

“It won’t end until we have more balance between supply and demand in the housing market,” University of Oregon economist Tim Duy told The Oregonian last week.

“Demand is severely outpacing supply,” the news report said.

Margot Black, an organizer for the advocacy group Portland Tenants United speaking for herself, said in an interview Monday that she’d spoken with Portland Commissioner Steve Novick last week to oppose new parking minimums in northwest.

“Right now, we should not be doing anything that restricts supply and increases prices,” said Black. “We certainly should have the option of no parking if that means we could have more units at a lower price.”

Parking advisory committee: Every building brings more cars

2018 nw everett 1910 9-20

2018 NW Everett Street.
(Photos: M.Andersen/BikePortland)

The proposal to bring parking minimums to the Northwest District comes from the volunteer Northwest Portland Parking Stakeholder Advisory Committee.

“At least half of our committee did not use to support parking minimums,” said Rick Michaelson, who chairs that committee and supports minimums. “We see that the transit system has not expanded rapidly.”

Michaelson said that even in the Footprint apartments, another 50-unit microapartment building in northwest, 16 units have signed up for street parking permits.

“We’re going to see a minimum of 30 percent even for these microapartments,” he said. “We think it’s a fairness issue. We think we need as many opportunities to get the system in balance and make sure that everybody contributes to the parking infrastructure.”

“9700 parking permits have been issued that are competing for the 4100 spaces.”
— Karen Karlsson, NW Portland Parking Stakeholder Advisory Committee

Michaelson predicted that city rates for street parking will go up, which will lead to more demand for off-street parking in the future. He also said a project similar to Tess O’Brien might have penciled out even with 42 on-site parking spaces.

“Some developers are choosing to have parking without affecting the bottom line,” he said.

Michaelson said his committee had discussed other ideas for affordability such as not counting below-market-rate units toward a building’s total, or exempting buildings that offer free TriMet passes to residents.

Karen Karlsson, who also serves on the committee, said her “bottom line” is that “9700 parking permits have been issued that are competing for the 4100 spaces.”

“We really need to find a way to help balance the supply and reduce the demand,” she said. “We need every tool that we can get.”

Council will hold hearing Wednesday and may vote

Portland City Council

Portland City Council: Steve Novick, Amanda Fritz, Charlie Hales, Dan Saltzman and Nick Fish.
(Photo: J.Maus/BikePortland)

Portland Commissioner Steve Novick said Friday that because he assumes “markets operate like markets,” requiring on-site parking in buildings in transit-oriented neighborhoods does tend to drive up housing costs by reducing the supply of new housing.

But Novick said he is considering support for a new parking minimum anyway, at least in the short term, because minimums already exist in most of the city.

“I generally am not excited about constructing lots of new parking,” Novick said. “I don’t think we should continue to build society around the car if we are going to take our climate goals seriously. [But] I am much more sympathetic when folks come from a neighborhood that has meters, has a permit system, has a fair amount of density, and say ‘Hey, we want to be treated the way other folks are treated.’”

The central city, which includes the Pearl District in inner northwest, doesn’t have parking minimums. As in northwest, developers there usually opt to include on-site parking as an amenity for residents who choose to pay extra for it.

Most of the buildings that define northwest Portland were built before the city’s first parking requirements.

But many older apartments and condos in northwest Portland, maybe even most of them, have zero on-site parking. That’s because most of the buildings that define northwest Portland were built before the city’s first parking requirements, which probably date to the 1950s.

In fact, one older apartment building in the district without on-site parking belongs to Michaelson’s real estate company.

For the second half of the 20th century, most new apartment and condo buildings in Portland had garages or parking lots attached. In 2000 the city council, led by then-Commissioner Charlie Hales, eliminated parking minimums for units close to frequent-service transit lines. Starting in 2008, as Portland’s rents began their recent climb, some developers began to secure loans for buildings without on-site parking.

In most of those buildings around Portland’s east side, half or more of households in the no-parking buildings owned at least one car. That meant parking spillover, which led to a backlash from some neighbors.

In 2013, Hales (newly elected as mayor) led approval of what he described as a stopgap measure to require parking at most new buildings of 30 units or more, even if they were within a block of a frequent transit line. But there was one exception: the Northwest District, which was already in the midst of a parking reform program.

Demand-based parking group organizing opposition to rule

park avenue west

Parking excavation beneath the future Park Avenue West tower downtown.

In the three years when many apartment buildings in Portland were being constructed without parking, from 2011 through 2013, average construction costs per apartment fell even though construction costs for other units didn’t.

Then, after parking minimums were reinstated for most transit-oriented buildings in 2013, average construction costs per apartment shot back up even though construction costs for other units didn’t.

Tony Jordan of the group PDX Shoupistas, which advocates for demand-based parking policy, found that the number of buildings going up in Portland with exactly 30 units — the maximum size a transit-oriented building can be in most of the city without triggering parking minimums — is apparently about to soar. There are currently 14 such buildings in development, he calculated last week.

According to city permit data obtained by BikePortland under state open records rules, that compares to eight such buildings over the last 15 years.

Jordan is organizing people to contact the city council Tuesday and/or testify on Wednesday to oppose new minimums.

“In times like this, proposals which curtail the supply of new housing and increase rents should be dead on arrival,” Jordan wrote Monday. “A vote for minimum parking requirements is a vote to make the housing crisis worse.”

Novick says citywide reform is an option, but not yet


New homes on Southeast Ankeny Street, built with an on-site garage.
(Photos: M.Andersen/BikePortland)

In an interview Friday, Joan Frederiksen of the Bureau of Planning and Sustainability said the city staff does not see a “tradeoff” between space for parking and space for people.

“I wouldn’t use the word tradeoff,” she said. “I think it’s more about balancing. … With this project we are echoing the direction council provided back in 2013, finding that balance between parking and affordability.”

Matt Grumm, a senior policy manager for Housing Commissioner Dan Saltzman, put things differently.

“There’s no doubt that these are tradeoffs,” he said. “Parking minimums potentially increase the cost of that housing.”

Grumm said his boss would “wait for the hearing” before deciding how to vote but suggested that maybe developers who opt to include below-market-rate units in their buildings should get a break on parking requirements.

“It’ll be interesting to see if that gets any traction,” he said.

In an email last week, Hales spokeswoman Sara Hottman said the mayor supports the proposal to “extend the City’s minimum parking requirements to the Northwest Plan district.”

There are two other votes on the council: Nick Fish, who proposed the 2013 parking minimums that were passed into code, and Amanda Fritz.

Both Novick and Frederiksen suggested that the city might consider amending its citywide parking minimums at some point in the future.

“Even if we wind up applying parking minimums in northwest next week, I’m really encouraged that I’ve been hearing people opposing parking minimums,” Novick said. “Once we have those new tools available, one option is to revisit the parking minimum requirements throughout the city.”

Novick didn’t respond to a question about when the council is likely to consider his proposal that would let neighborhoods create their own parking permit districts.

Eudaly: “We must start decreasing our reliance on the personal automobile”

NW Portland Week - Day 5-24.jpg

Parking outside the Clearing Cafe on NW Thurman.
(Photo: J.Maus/BikePortland)

Chloe Eudaly, who is running on a housing-affordability platform to replace Novick on the city council, said in an email Monday that she opposes new minimums:

Portland is going through growing pains right now and traffic congestion and parking are high on the list of concerns, but what’s even higher is housing affordability. So when we’re talking about a policy that would increase the cost of housing and decrease the number of units built, such as minimum parking standards for new multi-family developments, we need to consider our options and their impacts very carefully.

I respect the work of the NW Parking SAC, as an almost 20-year former resident of NW Portland I know what a headache parking has become in the area, but I don’t support their proposal of a blanket minimum parking standard for all new multi-dwelling developments of more than 30 units. Knowing that these spaces are likely to be underutilized in many developments and that we must start decreasing our reliance on the personal automobile, I believe we can and must come up with a more nuanced approach, especially in a neighborhood that is so central, dense, and transit-friendly (many NW residents live within 10 blocks of the street car, Max, AND a bus line).

Instead of requiring more parking space, Eudaly suggested requiring developers to offer bus passes, bike-share or car-share memberships, creating shared parking options, and raising on-street permit prices “to more closely reflect the actual cost of providing street parking.”

Other options she suggested included shared parking garages and a “live where you work” program. She, too, suggested a parking exemption for developers that include below-market-rate units.

Black, the tenants organizer, said Portland is facing a difficult transition away from a “small town” where most trips happen by car and most homes have private yards, driveways and “a picket fence.”

“It’s great if you got it, but it’s mathematically impossible for all of us to have it,” she said. “I see Portland really struggling to make this shift into a city from this small-town feel. … We need to shepherd Portland through that paradigm shift.”

— Michael Andersen, (503) 333-7824 – The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here.

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Guest Post: How to build a neighborhood with character(s)

Guest Post: How to build a neighborhood with character(s)

Fall leaves on SE Ankeny-7

An illegal neighborhood in southeast Portland.
(Photo: J.Maus/BikePortland)

This post is written by Neil Heller, a Portland-based planning consultant.

I recently visited a shop to get a new bike. I was shown two options: a gorgeous, yet expensive, custom-built single-speed cruiser and a massive cargo bike with all sorts of gleaming add-ons including an electric assist.

I like both of these bikes but they don’t quite fit my riding style — short commutes but also a bit of recreational road cycling on the weekends. I asked about a more versatile bike, one in between the two I was being shown, but was told road bikes are illegal.

Certainly I had seen some road bikes being ridden on my way over? These types are all an older style, I was informed, and can only be purchased used. No new road bikes are being built right now. Sorry.

By now it’s likely that you already see the metaphor and realize I never visited such a shop. I think this metaphor for housing choice is a good one because it highlights how laughable having such limited options can be.

Many of Portland’s most-loved neighborhoods are awash in beautiful single-family homes and wildlife-habitat-certified landscapes. Having leafy streets lined with front porches and landscaped yards so close to the Central City is a lovely pattern that defines Portland character, one not found in many other large cities on the West Coast. It is rare to find a city where one can find so many of these in such a setting a mere three miles from a downtown.

Post-recession, and in response to changing market preferences for denser urban living, another prominent type of housing being built in popular neighborhoods is the four-to-six-story mixed-use, mid-rise apartment building. Some of these have received criticisms of being “out of character,” or even worse, “soulless.” But much like the cargo bike, these types have a lot of capacity and go a long way to capture much of the population growth we are currently experiencing. For some of us, they’re the right answer.

In the current market we are mostly seeing these two products being built: single-family homes and the mid-rise apartment buildings found along our neighborhood corridors and centers. These options tend to cater to only one or two life phases. These products have their place, but what if you cannot afford the custom-built single speed and the high-capacity cargo bike doesn’t fit your lifestyle? What other options do you have?

The missing middle housing types: Already next door, but illegal to build

Sunnyside Missing Middle_v3

Examples of missing-middle housing, already found in Sunnyside.
(Photos and inventory: Neil Heller)

What if the available options covered a wide spectrum of housing choice with enough variety to meet a range of differing lifestyles and incomes? One term aptly describes these options as the ‘Missing Middle.’ The term is a straightforward description: the ‘Middle’ portion of the term represents the unit types found between single family and mid-rise apartments, where the ‘Missing’ describes the housing trends of recent history where these types of housing option have been largely ignored or prohibited by municipal regulations.

The following list describes the range of Missing Middle unit types that can be found around the city with the highest concentration of these types found in the Inner Southeast neighborhoods of Buckman and Sunnyside. The fee structure for these types can be for rent, for sale, or as collective ownership. The associated visual inventory are ones found in my neighborhood:

  • Carriage House (ADU)
  • Duplex (side-by-side/stacked)
  • Triplex
  • Fourplex
  • Mansion Apartment
  • Townhouse
  • Bungalow Court (attached)
  • Cottage Court (detached)
  • Apartment building (small/large)

Reintroducing these housing types to our city offers a response to the most salient of current housing concerns — flexibility, affordability, compatibility, and local investment. Fortunately Missing Middle allows a softer approach toward new development that some have called “invisible density.” Regardless of what clever phrase is used, the idea is to improve neighborhoods while still providing common-sense solutions that meet the needs of everyday Portlanders. In other words, providing neighborhood character for our neighborhood characters.

Portlanders’ stated priority: Housing affordability

1408 se 22nd ave 7 apartments in mansion built 1904

1408 SE 22nd Ave: one building, seven apartments. Built 1904.

Responses from the Portland’s Residential Infill Project survey indicate that affordability is the key concern among respondents. This is currently a topic of immense concern and Missing Middle contributes to the solution by increasing choice and thereby flexibility — flexibility that allows workable solutions for a variety of housing needs and situations over time and, ideally, in place.

Being modest in scale, wood frame construction methods allow Missing Middle to be built less expensively. These costs do increase slightly when buildings reach greater than four units due to safety requirements of the building code but still far less than a concrete and steel mid-rise. Additionally, costs to the end users are split across the number of households on the lot versus one family bearing the full expense.

Adding supply without sacrificing compatibility

2250 ne flanders garden condos built 1930

2250 NE Flanders: garden apartments, now condominiums. Built 1930.

Our existing Missing Middle types go a long way in defining the perception of current neighborhood character. Without these housing types, our most loved neighborhoods would appear overly homogenous — and the people who live there would be more homogenous, too.

New Missing Middle housing offers compatibility by the ability to honor our architectural legacy, which reflects our values, cultural expressions, and response to local climate. This range of options allows for new units being built to also respond to existing context through massing and architectural detailing. For example, a cute fourplex can have similar height, width, and details of a large single-family Portland Foursquare, making a welcomed neighbor.

The best developers are local small-scale developers

Missing Middle housing types are most likely to be executed by local, small scale developers. Certainly, the desire for a local developer depends on local capacity, which Portland has no shortage of. Local capacity also includes municipal policies that remove obstacles for small-scale developers.

In terms of finance, a project generally needs to be at least $25M to garner interest from large institutional equity investors. Capital investment for Missing Middle is much more modest and likely to come from local folks who take interest based on factors deemed important by the community such as the long-term health of a place or ability to address specific needs because they are also members of that community.

Along these same lines, a large out-of-town development firm probably has profit margins, operational standards, and lot size requirements that Missing Middle housing types do not meet.

Finally, smaller projects equal less risk but require more time and attention to execute these projects well. A local, small scale developer is likely to have relationships with local trades and the ability to provide the time and care necessary to, ideally, ensure a higher quality product. Having local knowledge of the area also allows them to find the lot types suitable for Missing Middle housing developments.

The way forward: A home for every household type


(Image: Daniel Parolek, Opticos Design)

As we update our citywide comprehensive plan and look into our crystal ball to the near and far future, Missing Middle as a strategy will become increasingly crucial to filling a variety of housing demands, particularly as our definitions of household continue to change, a huge portion of our population continues to age, and job duties become increasingly fluid. This strategy also aids in attaining a livable density that strongly supports neighborhood retail, transit ridership, and general daily activities that enliven public spaces.

Point being: the range of bicycle options are almost infinite. Our housing options are not. We should change this.

Neil Heller holds an advanced degree in urban planning and has worked for many years as a planning/urban design consultant. He’s currently looking for work in the Portland region.

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Portland is finally adding homes almost as fast as people are moving here

Portland is finally adding homes almost as fast as people are moving here

pop and housing growth

The population is up 16 percent since 2005, but the number of homes is only up 11 percent.
*The 2010 jump is related to better data from the decennial Census.
Data: American Community Survey. Chart: BikePortland.

After 10 years of falling further and further behind the number of people moving to Portland — and paying the price in rising rents, especially in bikeable areas — Portland nearly kept up with its own migration last year.

That’s according to American Community Survey figures released Thursday, which showed Multnomah County adding 4,688 net new homes in 2015. That’s the most to be reported from this data set since at least 2005, the first year it was available.

Since that year, Multnomah County’s population has grown 59 percent faster than its housing supply. That’s combined with relatively rapid growth in high-wage local jobs to rapidly drive up housing prices.

Last year, according to real estate analysts at Norris Beggs and Simpson, monthly rent at the average Portland-area apartment rose $100 — with the sharpest hikes in older, cheaper units.

Until local property owners actually start to see their rentals or sale listings sit open for more than a few weeks, housing prices are unlikely to fall. And the figures released Thursday show that the county’s population is still rising slightly faster than its housing supply: Multnomah County added 1.6 percent more people in 2015 but only 1.4 percent more homes.

“Based on the continued shortage of units and the steady to increasing demand in the coming years, we do not expect vacancy rates to approach 5 percent for at least the next 12 to 18 months and possibly longer,” the Barry Apartment Construction Report, a respected source of local housing data, wrote last month. “During 2016 and 2017, we expect a total of 12,000 to 14,000 new units to become available. The current levels of construction are meeting the new demand, but are failing to make up much ground on our low vacancy rates.”

skinny house

Was: One home in a bikeable neighborhood. Will be: two homes in a bikeable neighborhood.
(Photo: M.Andersen/BikePortland)

A study of California housing prices released in February concluded that in neighborhoods where more new market-rate homes are built, fewer people get displaced, presumably in part because the new, additional units gave wealthier households somewhere to move into other than the home of a less wealthy household.

As the city council crosses some of the last t’s today on a new comprehensive land-use plan and gets ready to start putting it into action, it’s worth considering what Portland can do keep adding more homes at least as fast as it has been for the last few years. If it doesn’t, be ready to keep saying “goodbye” to people who’ve helped make Portland the place it is.

— Michael Andersen, (503) 333-7824 –

The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here.

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Portland’s biggest, baddest bike parking facility is about to open

Portland’s biggest, baddest bike parking facility is about to open


Inside the Lloyd Cycle Station, where you can catch a game on the tube while you chill after a ride.
(Photos: M.Andersen/BikePortland unless noted)

Generally speaking, Portland does bike parking better than any city in North America. And one of the continent’s biggest bike parking projects is about to open in the middle of it.

The Lloyd Cycle Station, which opens to the public next month in the basement of the Lloyd 700 Building at 700 NE Multnomah Street, will offer half of the record-breaking 1,200 indoor bike parking spaces constructed as part of Hassalo on Eighth in the Lloyd District. But unlike most residential bike parking projects, this facility will also be open to people who work or shop in the area.

The 24-hour facility will offer service from on-site mechanics, paid lockers, showers, a bike-repair stand, extra-large cargo bike parking, a bike wash and free “commute consultations.”


The facility seen here through a window from the top garage elevator lobby of the Lloyd 700 Building.

Doors to the locker room facility.
(Photo: Hassalo on Eighth)

(Photo: Hassalo on Eighth)

Full memberships will cost $50 a month or $419 a year. For business tenants of the Lloyd 700, it’ll be $35 a month, $320 per year.

You don’t have to buy a full membership, though. Simply parking your bike in the Cycle Station will cost $119 a year for nontenants of the 700 Building, $20 a year for tenants; or if you just want shower access without bike parking, that’s $200 a year. Here’s the full fee schedule:

fee sched

This means that for residents of Hassalo on Eighth, a basic bike parking membership at the Cycle Station ($15/month) will be cheaper than bike parking inside the Hassalo on Eighth residential buildings ($25/month). That’s great news for Hassalo residents — it’ll prompt occasional bike users to stash their rides in the Cycle Station and keep the highest-convenience rooms open for people who ride daily.

“We’ve actually had a lot of people call to sign up, because they have many bikes,” said Kathryn Doherty-Chapman of Go Lloyd, the local business association that has partnered with Hassalo on Eighth to administer the Cycle Station.

So if you become a member, how will you reach the facility in the top floor of the three-level underground garage? There are two options.

“I recommend people use the plaza elevator,” said Doherty-Chapman. “It’s just an elevator built for people, but it easily fits a cargo bike or a longtail bike.”

The plaza elevator opens directly into the car-free plaza on Hassalo Street, opening onto 7th Avenue.


Both of these elevators lead to your bicycle parking, madam.

The other way is to use the elevator inside the 700 building, but it’s closed to the public after 6 p.m. and more heavily used in any case.

There’s also another way to use the Cycle Station even if you’re not a member: starting some time after the opening day in June, the 700 Building will offer a free short-term bike valet during business hours.

“If you’re here for an appointment or you’re running into Green Zebra, then you’ll just roll up,” Doherty-Chapman said.

The valet, operated by Ace Parking, will only be available during business hours. But it’ll be free to anyone who wants to use it.

Go Lloyd is hosting a grand opening celebration for the Cycle Station on Wednesday, June 1, at 10 a.m. on June 1, with guest speakers, a ribbon-cutting and snacks from nearby Green Zebra Grocery.

Though the Cycle Station obviously won’t be for everyone, it’s worth taking a moment to savor this milestone: one of the country’s best bike parking facilities is opening to the public in Portland and operating more or less as a business, planning to make money by giving hundreds of people a place to park their bicycles.

Governments can mandate bike lanes, bike parking and even bike programming. But when private businesses get in on the bike game, biking isn’t just an aspiration or an ideology. It’s a reality.

Disclosure: Hassalo on Eighth is a BikePortland sponsor. The opening of one of North America’s largest indoor bike parking facilities would also be newsworthy if they weren’t.

— Michael Andersen, (503) 333-7824 –

The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here.

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Affordable-housing alliance to city: Legalize ‘missing middle’ in bikeable neighborhoods

Affordable-housing alliance to city: Legalize ‘missing middle’ in bikeable neighborhoods

2314-16 se salmon duplex built 1927

2314 and 2316 SE Salmon: built in 1927, illegal to build today. City Council could change that with the comprehensive plan it’s about to vote on.
(Photo: M.Andersen/BikePortland)

As Portlanders debate ways to deal with the city’s continuing surge of housing prices, a coalition of local affordable-housing developers and service providers says Portland can’t afford to continue banning so-called “missing middle” housing from most of the city.

Duplexes, triplexes, internal home divisions and two-story garden apartments are common throughout many of the neighborhoods Portland built in the early 20th century. Today, those neighborhoods are the city’s most walkable, bikeable and transit-friendly — but since 1959, city code has made it illegal to build more neighborhoods like that. Homes with multiple kitchens or space for fewer than two cars are forbidden even on most residential land in the central city.

The Oregon Opportunity Network, which speaks for 20 local low-income housing providers and advocates, wrote this week that this ban is contributing to the deep Portland housing shortage that has been driving the poorest Portlanders out of homes entirely.

Three city commissioners have said they’d re-legalize missing middle housing, but only in the city core and “within a quarter mile of designated centers, where appropriate.”

“We urge you to support the ‘missing middle’ housing amendment” to the city’s comprehensive plan, the affordability coalition’s policy director Ruth Adkins wrote in a letter to city council dated Wednesday. “But also to go further, by following the City Club’s recommendation to revise the zoning code to allow for middle housing types in residential neighborhoods across the City – not just near centers.”

Last week, members of the nonpartisan local policy organization Portland City Club voted overwhelmingly to support, among many other affordability measures, zoning reform that would allow “missing middle” housing in residential-zoned Portland neighborhoods.

Three city commissioners — Nick Fish, Dan Saltzman and Mayor Charlie Hales — have backed comprehensive plan amendment #P45, which would re-legalize missing middle housing, but only in the city core and “within a quarter mile of designated centers, where appropriate.”


(Image: Daniel Parolek, Opticos Design)

“One of the main drivers of expensive housing is minimum lot sizes,” Adkins wrote. “Portland needs more, and smaller lots​. Portland suffers from a severe shortage of lots for homes – particularly single­-family homes – which can only be solved by redefining what constitutes an acceptable legal lot under our zoning and comp plan. Such a change could open up thousands of new lots for homes, all over the city.”

Oregon ON offered a series of anecdotes of the ways lot-size minimums are blocking lower-income Portlanders from buying into the city’s housing market:

● At PCRI​, land owned by the organization for over 20 years could be developed or re­developed for new affordable homes, including for homeownership. This land is located in residential zones throughout north and inner northeast Portland, but minimum lot sizes limit the number of homes that can be developed, handicapping our opportunity to deliver affordable homes for hundreds of families eager to purchase them.

● At the Portland Housing Center​, our pool of pre-qualified first-­time buyers is larger than ever. But the private market continues to almost exclusively produce large and expensive homes, far out of reach to our buyers. Hence many buyers are failing to find homes to purchase – or being driven farther and farther away from amenity­-rich neighborhoods and employment centers to find anything they can afford.

● At Human Solutions​, we are seeing a 30 percent increase in demand for our family shelter as more families and children cycle into homelessness and an almost weekly narrowing of the universe of private market rental units in historically affordable East County that will accept our families and our rent assistance partnership. At the very same time that we are seeing the volume of publicly financed units that are affordable and accessible to very low-­income families experiencing homelessness shrink and our inability to financially compete with private developers and speculators who are buying up the stock of market­based affordable properties that are currently housing our client families in East Portland. Without action, those currently affordable properties will disappear from the affordable inventory as private redevelopment shrinks the supply even further.

● At Proud Ground​, Portland’s home ownership funding cap of $60K/unit and lack of funding outside of Urban Renewal Areas has not kept up with market realities. This makes it harder than ever to get new homes into trust for permanent affordability.

● At Habitat for Humanity Portland/Metro East​, we have 10+ eligible buyers for each house we build. But it has become a significant struggle to time find land we can afford on which to build new developments of affordable homes. We’re entirely priced out of single-­family zoned portions of the city, where lots typically go for $200K+ per lot.

Hales planning policy advisor Camille Trummer said in an interview Friday that the mayor is “leaning toward” allowing missing-middle housing in more residential areas rather than just the immediate vicinity of “designated centers.”

“The mayor is very interested in middle housing,” she said. “He’s depending on advocacy from various groups to help calibrate how we form that policy going forward.”


Velia Mendoza puts her bike in the new lockers at a Hacienda CDC property last year. Hacienda is among 20 housing groups urging the city to allow more variety of home types in more of Portland.
(Photo: Jaclyn Hoy for Community Cycling Center)

Oregon ON also includes direct service providers like Catholic Charities/Caritas Housing, Central City Concern and Home Forward as well as nonprofit community development corporations like Hacienda CDC in Cully and ROSE Community Development in outer southeast Portland.

The coalition doesn’t suggest that simply increasing housing supply and shrinking minimum lot sizes will be enough to help low-income Portlanders or preserve income diversity within neighborhoods. It strongly supports a proposal from Commissioner Amanda Fritz to set a goal of 10,000 new regulated affordable housing units to the city by 2035.

“Zoning reform won’t be enough on its own,” Adkins wrote to the city council. “Although the changes noted above will increase the availability of reasonably priced home lots, nonprofit developers and first-time home buyers will still face sharp competition with market developments and more affluent buyers – especially in amenity­-rich neighborhoods. It is essential that Portland immediately build on our hard­-won progress in Salem and implement a mandatory Inclusionary Zoning policy, along with an excise tax on new construction of at least 1 percent, dedicated to affordable housing​.”

The comprehensive plan amendments in question are P45 (missing middle housing and near “designated centers”) and P46 (at least 10,000 new price-regulated units).

If you’d like to weigh in on these issues yourself, you can email until 2 p.m. on Wednesday, April 27.

— Michael Andersen, (503) 333-7824 –

The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here.

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Portland’s best model for population growth without catastrophe is right in front of us

Portland’s best model for population growth without catastrophe is right in front of us

2018 nw everett 1910 9-20

2018 NW Everett Street, built 1910.
(Photos: M.Andersen/BikePortland)

Part of NW Portland Week.

Portland’s “huge population boom” and “explosive growth” have driven such a painful housing shortage that it’s not uncommon these days to hear Portlanders wish the city would stop creating so many jobs.

Since 2008, the city’s population growth rate has been about 9,000 net new residents per year, or 1.5 percent.

But when many of the buildings that continue to define northwest Portland were built, Portland’s population was growing by 7 percent every year for years on end. In the decade of the 1900s, the city that started at 90,000 residents added 11,679 new ones every year on average.

portland population growth

Growth in percentage terms. 2010s are through 2014 only.
(Data: U.S. Census. Chart: BikePortland.)

How could it happen? With so many migrants pouring into the aftermath of northwest Portland’s hugely successful Lewis and Clark Centennial Exposition in 1905, how could the city have possibly kept housing costs low enough to keep wages manageable for the host of new employers popping up? How did the city avoid cultural collapse?

portland population growth absolute

Growth in number of additional residents. 2010s are through 2014 only.

Portland’s situation wasn’t unique. Seattle grew even faster in the same decade, and Los Angeles faster still. San Francisco’s similar boom came in the 1870s. For St. Louis it was the 1850s; for Philadelphia the 1860s; for Chicago the 1890s; for Detroit the 1910s.

How did cities survive population booms four or five times larger than Portland is going through today?

And why, somewhere around 1920, did U.S. cities never see population booms again — even in an age of deep geographic inequality that is watching smaller cities like Urbana, Illinois continue to shed jobs while some bigger ones, including Portland, add them hand over fist?

You can see the answer any time you ride a bike through northwest Portland. Growing cities built and built and built — because until 1920 or so, there were no laws that said you couldn’t.

2110 nw flanders 1908

2110 NW Flanders, built 1908.
1026 nw 20th 1909 21-50

1026 NW Flanders, built 1908.
120 nw trinity 1912 21-50120 NW Trinity, built 1912.
117 NW Trinity 1912117 NW Trinity, built 1912.
1730 nw couch 19081730 NW Couch, built 1908.

There’s no single image that explains Portland’s history at a glance better than Justin Palmer’s amazing Age of a City map, which color-codes almost every building on the Oregon side of the metro area by the decade of its construction.

age of a city

Paler = earlier.
(Image: Justin Palmer)

Zoom into northwest Portland and you can see the history, block by block, of how Portland survived its explosive 1900s:

northwest portland building age zoom

Portland approved its first zoning laws in 1918 and expanded them by popular vote in 1924, limiting basic construction to four stories and maximum height to 15 stories; it was approximately the same year that local streetcar usage started its long decline. In 1945, lawns and driveways became mandatory in most of the city as minimum lot sizes were set at 5,000 square feet for single-family zones; in 1959, duplexes and internal home divisions were banned from single-family zones.

Nobody seems to be sure when mandatory garages and other minimum parking requirements arrived; Tony Jordan of Portland Shoupistas said city staff told him it was probably the 1950s.

None of this is to say that Portland’s boom decades were a golden age. The city had as many or more problems then. And it is not to say that market-priced housing can ever address the separate and huge problem of poverty. It can’t.

But the 1900s are proof positive that market-priced housing, if there’s enough of it, can be perfectly capable of controlling housing costs for those of us who aren’t currently poor.

And today, spending time in the neighborhoods Portlanders built in the 1900s, like much of northwest Portland, doesn’t just mean seeing buildings that were needed to prevent spiraling rents or enable job growth. It means enjoying yourself. It means spending time in a place that is quite nice.

Last year, former Metro councilor and former northwest Portlander Robert Liberty wrote a love letter to Nob Hill called “My Illegal Neighborhood.”

Typical city zoning makes it illegal to build or operate a warehouse or a light industrial use next to homes and a grocery store. The separation of industrial and commercial uses from residential uses was the very foundation of zoning a century ago.

It is illegal in most cities to build apartment buildings without providing one or more parking spaces for every apartment. The same would be true of grocery stores or office buildings. The neighborhood’s grocery store has fewer than 20 parking spaces.

The street in my old neighborhood does not meet more current design requirements, because it is considered inappropriate to design a street so that car cannot pass each other at any time or location. The street is 27 feet wide, curb to curb. That includes parallel parking on both sides, leaving a travel lane about 12 feet wide. That violates the standards for a local road recommended by the American Association of State Highway and Transportation Officials.

In most cities, you cannot operate a business out of your home if you have employees or customers arriving from other locations.

In too many places, it is effectively illegal to build subsidized housing for families of modest means. Even when it might be legal, local officials can interpret nebulous phrases like “preserve neighborhood character” or complex regulations in way that such housing is never approved.

A senior center, even though it is not a business, would be treated like a commercial use that cannot be allowed next to single family homes.

The elementary school would probably be illegal too because the school property would be too small to meet many states’ standards. The school is located on about 9.8 acres but many of those acres are occupied by a park open to the public at all times. The school, which has 685 students, would require a site of 11.85 acres in California, Texas and Connecticut, 15 acres in New Mexico and 18-20 acres in suburban Pennsylvania.

And then there is the absence of parking places; according to Virginia’s 2010 school design standards, the school should provide parking for all the staff, visitors and about a third of the students. (Apparently the legal driving age in Virginia is much younger than in Oregon.) …

Does that mean do away with all regulations? No. But it does mean that we need to stop assuming that everyone wants to, or can afford to, live in a big house on a big lot in a residential-only neighborhood. We shouldn’t be making it illegal to build the kind of neighborhoods, like mine, that are increasingly popular and in short supply.

Portland is in the middle of an election season in which no subject is hotter than the upward spiral of market-rate rents. The problem has the city in a constant roil. Policy wonks are scouring the planet for cities with tools that can prevent rapid population growth from becoming a disaster for market-rate housing.

Northwest Portlanders are lucky. The model everyone is searching for is their own history, and it’s standing right in front of them.

— Michael Andersen, (503) 333-7824 –

The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here. Our work is supported by subscribers. Please become one today..

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Average apartment building costs fell sharply during no-parking apartment boom

Average apartment building costs fell sharply during no-parking apartment boom


Southeast Ankeny Street.
(Photos: M.Andersen/BikePortland)

In 2013, when the Portland City Council began requiring most new apartment buildings of 30 or more units to include on-site parking garages, housing watchdogs warned that this would drive up the prices of newly built apartments.

Because the city still lets anyone park for free on public streets, they predicted, landlords wouldn’t be able to charge car owners for the actual cost of building parking spaces, which can come to $100 to $200 per month. So the cost of the garages would be built into the price of every new bedroom instead, further skewing new construction toward luxury units.

Three years later, rough data suggests that this could be exactly what happened.

To be sure, this would be only one factor in many that have driven up Portland housing costs. Rents have been rising faster among old units than new ones. But as the city council nears what looks like a tight vote on whether to impose similar mandatory-parking rules in Northwest Portland, affordable-density advocates warn that the story could repeat itself.

Portland affordability advocate Brian Cefola got in touch with us last month to share the numbers he’d crunched using local building permit data published by the U.S. Census.

It turned out, Cefola discovered, that the average cost of building a home in a Portland multi-family building dropped 24 percent between 2011, when Portland’s first wave of no-parking apartments began to open, and 2013, when the new city rule took effect.

At that point, the average price returned to its previous levels.

parking costs

Buildings with 5+ units only. Data source: Census, via Brian Cefola. Chart: BikePortland.

The housing boom and collapse surely play a role in this data, though the exact role isn’t obvious. The international recession and subsequent job collapse began in late 2008; job losses peaked in January 2009. By 2010 — before the price drop Cefola identified — Portland’s economy had become relatively stronger than the national economy, and migration to Portland was accelerating further.

In an effort to correct for changes in labor and other construction costs, Cefola (an insurance analyst in his day job) also crunched the numbers further. Using the cost of building homes in small buildings (one to four units), he created an index of what you’d “expect” units in large buildings to cost if the rules for large buildings hadn’t changed.

That adjusted measure revealed a large, brief spike in per-unit construction costs in 2008, when the recession hit.

Something else it revealed: during the 2011-2013 no-parking boom, the average new Portland apartment cost 17 percent less to build than would have been “expected.” Then it returned to normal.

construction index

Data too noisy to draw firm conclusions from, experts agree

Even local experts who oppose parking minimums cautioned that Cefola’s numbers aren’t precise enough to draw solid conclusions from.

“I think it’s really, really hard to draw any strong inferences about the role of parking requirements on building costs based on such aggregate data,” said Joe Cortright, a Portland-based economist who often writes for City Observatory about the unintended costs of overbuilding parking. “The average per unit costs are highly sensitive to what we call composition effects: sometimes developers build expensive stuff in the Pearl (larger units, nicer finishes) and sometimes its spartan studios. So the per unit cost can fluctuate depending on the mix (composition) of the units being built in any particular year. I think that’s clearly what’s going on in 2008–where you see a big spike in the average cost per unit. When the market went south, the only thing that was moving forward, apparently, was pretty high end stuff.”

“This is, alas, only circumstantial evidence,” Cortright wrote.

empty lower garage

Linden at SE 12th and Burnside tries to recoup the costs of its on-site garage by charging tenants for parking, but street parking is free.

Chris Smith, a Northwest Portland resident who this month led a successful vote by the Planning and Sustainability Commission against new parking minimums, agreed.

“I would guess that a variety of construction cost factors rising would make it hard to point to parking specifically as a cost driver in the data set we have,” he said.

Cefola doesn’t argue otherwise.

“It’s an indication, and I think indications can be wrong,” he said.

But Cefola, who serves as president of the Grant Park Neighborhood Association in his spare time, said the data lines up with logic.

“Many people warned that it would have an impact on affordability and the kind of construction that would be put up,” Cefola said. “It added this fixed cost per unit. I think people, myself included, warned that it would incentivize larger units, higher-end units.”

A rendering of the proposed Overlook Park Apartments. After the city’s parking requirements took effect, it added an extra story, 17-20 auto parking spaces and higher rents.
(Image: TVA Architects)

There might be no better test case in the city than a project (still unfinished) called Overlook Park Apartments. That project was designed with no parking before the code change, then redesigned with parking after the code change.

The second plan for the building had 17 parking spaces, fewer housing units and higher target rents.

Cefola said he thinks his circumstantial evidence is enough reason for professionals at the city to dig deeper.

“I think there’s this question out there that the city really ought to be answering,” Cefola said. “Given the fact that they say there’s a state of emergency on housing, how come they haven’t made any attempt to assess the parking policy they put in four years ago?”

Interested in parking reform? Come to BikePortland’s wonk night Tuesday to help smarter parking rules build a better low-car city.

— Michael Andersen, (503) 333-7824 –

BikePortland can’t survive without subscribers. It’s just $10 per month and you can sign up in a few minutes.

The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here.

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Could it work here? How Seattle’s big new housing compromise came together

Could it work here? How Seattle’s big new housing compromise came together

separate signal phases bidirectional 2nd seattle

Seattle’s recent housing breakthrough may have lessons for keeping bikeable parts of Portland affordable.
(Photo: Adam Coppola)

Here’s one way to think about the political battle over housing in growing cities, spelled out Monday at an Oregon Active Transportation Summit panel: it’s got three main interest groups.

One group is social-justice advocates and tenants. These people are generally interested in keeping prices lower one way or another, especially for the lowest-income people.

One group is environmentalists, businesses and the development industry. These people are (for various reasons) generally interested in increasing the number of people living in the city.

The third group is a highly active subset of single-family homeowners. These people are generally interested in maintaining or increasing the value of their property, especially while keeping things the way they were when they bought it.

At an OATS panel Monday, environmentalist Alan Durning of the Seattle-based Sightline Institute proposed this way of thinking about housing politics. Then he used it to describe Seattle’s situation, and the unusual way the city has been responding to it.

“The previous status quo in Seattle around housing issues is a coalition that I sometimes refer to as the NIMBY-Trotsky coalition,” Durning said with tongue somewhat in cheek. “The social justice community essentially aligned with the homeowner community because of concerns about displacement. And the affordable housing community — that is, the providers of affordable housing — didn’t want to upset their donors and voters.”

“You think things are expensive in Portland, right? Multiply everything by 50 percent.”
— Alan Durning, Sightline Institute

In the short term, Durning said, that political “equilibrium” made everyone happy. But over years and decades, it pointed in one direction: a huge housing shortage.

“The long-term effect of this is to make housing in Seattle astronomically expensive,” Durning said. “You think things are expensive in Portland, right? Multiply everything by 50 percent. … We have to do something, or we’ll end up with a truly San Francisco situation.”

So, Durning said, Seattle’s social-justice advocates and housing-supply advocates teamed up to propose a so-called “grand compromise” that aimed to build a new coalition of their own that would, over time, drive prices down rather than up.

As Portland contemplates a similar fate — and gets close to a similar conversation of its own over the next year or so — the panel asked the question: what role will these interest groups play here?

HALA’s key breakthrough: Upzones plus inclusionary zoning

12th Street in First Hill

Seattle’s proposal is to let developers add one additional story of housing in exchange for offering some units at lower rates.
(Photo: Paul Sableman)

In Durning’s account, Seattle’s sheaf of housing recommendations — known as the Housing Affordability and Livability Agenda, or HALA — required 10 months of closed-door negotiation and almost collapsed completely.

“We need to handcuff the two to each other: density and affordability.”
— Alan Durning

“Eight months into this process, everyone was convinced it was going to lead to nothing, and in the last two months a very surprising set of recommendations emerged,” Durning said. “The first is that we need more housing: not a little but a lot more housing. … The second is that we need to do that in a way that steers the growth toward density and affordability. In fact, we need to handcuff the two to each other: density and affordability.”

The issue was certainly pressing. Last year, Durning wrote that during his 10 months on HALA’s 28-member advisory committee, the assessed value of his own house had inflated $100,000.

By the end of it, Durning said, the committee hit on a key bargain: allow more density everywhere in Seattle, but use conditional mandatory inclusionary zoning to guarantee that all the upzones in multifamily areas include units that would be affordable to people making less than 60 percent of median income.

“The kernel at the center of the HALA plan is a recommendation to basically upzone the whole city — not literally upzone the single-family zones, but create more flexibility in them — but [as] part of that, in every one of those upzones there would be a mandate that developers provide a certain percentage of units in each building,” Durning said. “This would produce way way way more affordable-rate units and way more market rate units than anything on the table before.”

If the plan simply put inclusionary zoning on every property without upzoning it, fewer developments would have been profitable and infill might have stopped — which would have also stopped production of low-cost units, because inclusionary zoning only applies to new buildings. Instead, the citywide upzone allowed developers to build one more floor on many buildings, but — once that “upzone” has been completed — it essentially requires them to use the profits from that top story to subsidize the lower-rent units.

Despite media backlash, Seattle voters back affordability-coalition candidates

Councilmember Lorena Gonzalez Oath of Office

Civil rights lawyer Lorena González won big in Seattle’s council election after backing HALA’s affordability recommendations.
(Photo: Seattle City Council)

When the HALA committee’s recommendations went public, Durning said they caused a “huge fight in the press.”

The lightning rod was the committee’s finding that single-family zoning in Seattle (like in all U.S. cities) was rooted in the desire of early 20th century homeowners to keep non-white and poor people out of their areas.

“It led to a huge, huge outpouring of opposition and so on just before there was a primary election,” Durning said. “If you looked at the media or attended community meetings, your assumption was going to be all our recommendations were going to die.”

In the firestorm, Durning said, Seattle’s mayor and council backed off from some of the recommended changes to single-family neighborhoods.

“But what happened next was very interesting,” he went on. “The organizations that had their interests reflected in HALA began to find each other and form their own coalitions.”

Durning said HALA has given groups including unions, urbanist environmental groups and affordability advocates a banner to unite around. And he said they have united, notably in a new group called Seattle for Everyone.

“Now, many of the key community meetings and much of the media coverage in the city, there are two voices in much of the debates that have been dominated by neighborhood preservationists,” Durning said. “We’ll also have someone who stands up and says, ‘I work in the city of Seattle and I’d like to be able to live there.”

After last fall’s elections, Durning said, “the politics have shifted.”

“The candidates who latched their futures to the neighborhood preservation impulse mostly got clobbered,” Durning said. “The lesson that people in the political establishment in Seattle took from that is, Oh, you have to be careful when you’re talking about changing neighborhoods, but it’s not a third rail, and it’s not going to kill you.

Durning warned that the battle for more and cheaper housing in Seattle won’t be won until the city has finished the mass upzone, which it’s trying to complete one neighborhood at a time.

“It’s going to require an unbelievable organizing effort,” Durning said. “The only reason we can believe that can work is if we can hold that political coalition together for everyone from the chamber of commerce to the social justice advocates.”

Portland panelists see local parallels and differences

High Crash Corridors campaign launch-3

Southeast Foster Road could see rapid displacement if prices keep rising.
(Photo: J.Maus/BikePortland)

Sharing the panel with Durning Monday were two Portland housing experts: Justin Buri of the Community Alliance of Tenants and Housing Land Advocates, and Katherine Schultz of GBD Architects and the Portland Planning and Sustainability Commission.

Both agreed that some measures similar to Seattle’s might be useful in Portland.

Buri criticized zoning restrictions such as “floor area ratio and minimum lot size that are only there to preserve the value or increase the value of that home and create enclaves of wealth.”

Schultz said her architecture firm has found that the main way to build homes more cheaply is to build them smaller.

“Really, the only thing that we’ve been able to spur is making units smaller and more efficiently designed,” Schultz said. “You have a market out there that’s based on cost per square foot.”

Schultz said she completely agreed with the need to hold down housing prices, both by building more market-rate housing and by finding ways to make it profitable for developers to offer below-market housing.

Buri — who raised his hand, grinning, when Durning mentioned the “far left who don’t believe anyone should be making money on real estate” — questioned whether Durning’s “NIMBY-Trotsky coalition” is as strong in Portland as it has been in Seattle.

“It is supply and demand, but that doesn’t mean that if you’re a low-income tenant that’s being displaced from your home, taking an economics 101 class could help you avoid that.”
— Justin Buri, Community Alliance of Tenants

“It’s dangerous to paint opposition with broad strokes,” Buri said. “We see first-time homeowner opportunities being demolished for $800,000 McMansions, which doesn’t do anything for density or affordability.” Objecting to one-for-one demolitions, Buri said, is very different than objecting to construction because it changes “neighborhood character.”

Buri also called for Portland to work harder to include groups like OPAL Bus Riders Unite in its planning processes and to make affordable housing the first priority in a publicly backed development plan rather than the last.

And he noted that for all the talk of economics, understanding the causes of Portland’s housing shortage and price spikes isn’t enough to fix them.

“I am getting more and more frustrated with the simple refrain it’s just supply and demand,” Buri said. “It is supply and demand, but that doesn’t mean that if you’re a low-income tenant that’s being displaced from your home, taking an economics 101 class could help you avoid that.”

The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here.

— Michael Andersen, (503) 333-7824 –

BikePortland can’t survive without subscribers. It’s just $10 per month and you can sign up in a few minutes.

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As state law passes, the fight for affordable proximity moves to City Hall

As state law passes, the fight for affordable proximity moves to City Hall


A rally last fall to better protect Portland tenants from displacement.
(Photo: M.Andersen/BikePortland)

After years of fighting, a “grand bargain” on affordable housing passed Oregon’s legislature this week. But it won’t begin shaping Portland’s bikeable neighborhoods until after the city council takes action of its own.

Representatives for Mayor Charlie Hales and his council colleague, Housing Commissioner Dan Saltzman, say that plans to do so are already underway.

Any city plan seems certain to include some level of “inclusionary zoning,” a measure that could require that up to 20 percent of units in some new buildings be sold and/or rented at discount prices to people who make less than 80 percent of the median income. (As of 2015, that 80 percent figure means that a family of three that makes less than $52,950 would qualify for the reduced-rate units.)

But many questions remain. In which neighborhoods would the rule apply? Will developers be allowed to build higher, or exempted from expensive requirements such as auto parking, to make up for their losses from those discounted rents? Will inclusionary zoning be coupled with other changes such as re-legalizing duplexes or garden apartments or charging a “linkage fee” on all new development? Developers will also have the option to get out of the inclusionary zoning requirement by paying into a city affordable housing fund; how high will that fee be?

All of those decisions will be made by cities like Portland, probably in the next few months.

Because migration to Portland boomed during the Great Recession just as the construction rate plummeted, the city’s population has grown 79 percent faster than its housing supply.

rental shortage width=

When vacancy rates are low, landlords can raise the rent without losing tenants.
(Data: Census Bureau.)

That’s left the metro area with one of the nation’s lowest rental vacancy rates and made soaring real estate prices and rents the single hottest issue in the current mayoral election.

Oregon’s House of Representatives approved a Senate bill Thursday that removed the “preemption” in state law that has banned cities from using inclusionary zoning. Gov. Kate Brown is expected to sign.

Saltzman’s chief of staff, Brendan Finn, said in an email Thursday that his boss has laid out a plan for “a community-wide data driven discussion that would include but would not be limited to members of the development community, as well as affordable housing experts and advocates.”

“Dan introduced a resolution at council Feb. 10,” Finn said. “Now that preemption is to be lifted and signed into law, we can get started on a process for crafting a policy for Portland.”

Hales spokeswoman Sara Hottman said the mayor is also ready to start work.

“Mayor Hales has instructed all involved city bureaus to develop plans for an effective Portland implementation of the new law,” Hottman said in an email. “Commissioner Saltzman, in charge of the Housing Bureau, has been instrumental in passing the bill, and will be overseeing the implementation.”

A repeal of the state’s ban was the Portland city government’s top legislative priority in Salem this year.

Affordability advocates gear up for local debate
Occupy Portland on SW Main Street-4-3

Commissioner Dan Saltzman walks past an Occupy Portland demonstration in 2011.
(Photo: J.Maus/BikePortland)

The Portland advocates who’ve been pushing for repeal of the state ban said they’ll be shifting their work to City Hall, in part because they think a successful policy in Portland will create political support for a future effort to fully remove Salem’s regulation of housing price controls. Here’s the word from Vivian Satterfield, deputy director of OPAL Environmental Justice Oregon:

This is obviously a big day for OPAL Environmental Justice Oregon and the Oregon Inclusionary Zoning Coalition. We’re proud to have put this issue on the table in Salem and to have convened a large and powerful statewide coalition that together, brought about this historic victory for housing opportunity. That being said, there are key pieces of the legislation that need to be fixed in future years at the state level. OPAL and other partners of the Coalition, namely those organizations representing people of color and working families, expect to be at the relevant policy tables to craft a local IZ policy that maximizes the use of the tool in its current form. We have already initiated these discussions with Commissioner Saltzman’s office and we look forward to working with the future Mayor of Portland as well. Demonstrated efficacy of any inclusionary zoning policy both at the City of Portland and other jurisdictions ready to adopt their own IZ policy will undoubtedly support future efforts to seek a full repeal and local control.

For three years now, we’ve been exploring how you can’t have a truly bike-friendly city without affordable proximity. Depending on how this new state law gets enacted and what other changes come along with it, this could be a very important moment in making sure Portland’s bikeable neighborhoods don’t slip permanently out of reach for most Portlanders.

— Michael Andersen, (503) 333-7824 –

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City wants taxpayers to finance $26 million hotel parking garage next to light rail

City wants taxpayers to finance $26 million hotel parking garage next to light rail

rendering with bikeportland

An architect’s rendering of the proposed six-story parking garage in the Rose Quarter.
The viaduct on the left is Interstate 5.
(Renderings via NextPortland)

The city’s economic development agency agreed this month to have city taxpayers make an eight-figure bet that driving to the Rose Quarter area is going to remain popular for decades.

The Portland Development Commission voted Feb. 10 to borrow $26 million from one of its property tax funds to build a new 425-stall parking garage on public land between NE Holladay Street, Multnomah Street, 1st Avenue and 2nd Avenue, across the street from the Rose Quarter Transit Center.

Fifty of those stalls would then be resold to TriMet for an estimated $8 million, and the other 375 would be set aside for rental to the publicly subsidized 600-room Hyatt Regency Convention Center Hotel that’s supposed to go up across the street.

The PDC made headlines last fall for arguing that it couldn’t afford to dedicate half of urban renewal tax revenue to affordable housing because it had too many other important priorities.

The PDC says it will turn a profit with this project, and an independent local parking consultant says in this case that’s likely.

But the big public loan making it possible is coming at a time when more than half the private-sector hotels in Portland’s central city aren’t building any new parking at all.

parking at new hotels

(Source for most of this data: NextPortland)

To be sure, all of these hotels will be catering to overnight guests and others who bring cars. But most of the privately funded hotels are choosing to rent spaces from nearby off-site parking garages rather than taking out long-term loans to finance new garages.

If the PDC’s revenue projections for the garage turn out to be wrong, Lloyd District taxpayers will be on the hook. Any losses would come out of urban renewal funds that might otherwise be used for local street improvements — for example, planters along the protected bike lane on NE Multnomah, or reconstruction of NE Broadway for better walking, biking or transit.

By the same token, if the garage turns out to make money, the PDC would have more money to spare for such street improvements and other projects.

Garage revenue analysis is secret and came from firm with millions at stake in hotel project

hotel with garage

The parking garage, left, is being built because the developers of the new 600-room hotel, right, said they require up to 375 parking spaces for guests and staff at all hours.

City officials say they’re confident the garage will be profitable. In fact, they say it’ll deliver $500,000 in profit, after operations and construction debt payments, out of about $2 million in annual revenue.

“If you were going to own a garage in town, this’d be the garage you’d want to own.”
— Bruce Wood, senior city project manager

“If you were going to own a garage in town, this’d be the garage you’d want to own,” said Bruce Wood, the PDC project manager working on the garage deal.

Wood said the PDC can’t share the formula that was used to estimate the garage’s revenues, because it’s proprietary.

“They won’t even send it to me,” Wood said.

In this case, “they” includes Schlesinger Companies, a Portland parking management and development firm. Wood said the company estimated that the garage will be able to get 90 percent of its revenue from a projected valet charge of $35 per car per night, which Wood said is on the low side in the Portland hotel market.

“All the models and everything were provided to us by the experts in the parking industry,” Wood said. “In this particular case, the Schlesingers were one source.”

The Schlesingers are also the people who own the land beneath the would-be hotel. They have been vocal advocates for the various public subsidies that have been lined up to support its construction.

“It’s very important to our family to get this deal done,” Barry Schlesinger told Willamette Week in 2013 for an article that described his family’s company as “troubled.”

Wood, the city project manager, said he is “not an expert on managing parking demand” and that he has never calculated what the projected revenue per stall would be in the garage; he only knows the total revenue projections from each anticipated use. But based on the garage’s projected annual debt service of $1.3 million, plus $1,000 annual operation and maintenance cost per stall, the hotel portion of the garage would need to net an average of $12 per stall per day to break even, or $18 per day to deliver the $500,000 annual profit the PDC projects.

Though the formula Schlesinger Companies used to calculate demand for the garage is proprietary, PDC spokesman Shawn Uhlman said, the PDC is happy to share its outputs.

Independent parking consultant says garage will likely make money, but isn’t sure why public must fund it

rendering with fake people

Rick Williams, a Portland-based parking consultant who ran the district’s Go Lloyd business association for 20 years and does business with many of these players but has not been involved in the deal, said the PDC’s assumptions of profitability are reasonable.

Mostly, that’s because hotel parking is very lucrative.

“On the very top of the pyramid, for parking issues, is hotel parking,” Williams said.

Another reason the garage is likely to be a good investment, Williams said: hotel parking garages clear out during the day, so some spaces in the Hyatt lot could potentially be rented out to Lloyd District office workers, or to people attending daytime events at the Oregon Convention Center immediately to the south.

Concerts and games at the Moda Center might also help fill stalls.

“I think it’s got a good shot to be viable, because it has the capacity to stack those revenue sources,” Williams said.

But if a parking garage in this area is such a good idea, why isn’t someone in the private sector — such as the Schlesinger family, or the Mortenson Development company that’s helping develop the Hyatt — taking out a loan and pocketing the projected 25 percent profit itself?

“That’s a very good question,” Williams said. “I don’t know why the hotel doesn’t build it, because I wasn’t privy to that conversation.”

If city succeeds in reducing driving, garage deal could backfire

Data source: Multnomah County. Chart by BikePortland.

Critics of the deal say it makes no sense for the public to be helping finance a long-term future where a central-city hotel has a car parking stall for 62 percent of its rooms.

After all, by 2030 — 12 years into the lifespan of a garage, when it’ll still be trying to pay off its construction loans — the city is aiming for only 30 percent of trips in the entire city to happen by car.

Another variable in the mix: self-driving cars. International business consulting group McKinsey and Company predicted last month that by 2030, 15 percent of new cars sold could be autonomous and 10 percent could be shared, with much higher rates in major cities. If that were to happen, demand for central-city parking could fall dramatically.

“Do we believe that a 600 room hotel in one of the most transit rich areas in one of the most transit/bike/walk-able cities in the nation, built adjacent to a light rail line that goes directly to the airport and downtown, in a district with over 3,000 structured spaces, will be parked to capacity in 2030?” asked Tony Jordan of the paid-parking advocacy group PDX Shoupistas in a blog post last week. “Doubtful. This is a dinosaur plan.”

Indeed, auto use among Portland tourists has already been falling much faster than auto use among Portland residents. As we reported in 2014, hotel and motel sales are up 26 percent since 2001, after inflation, but car rentals are down 13 percent.

“If we have a national convention, we have mostly out-of-town visitors who don’t have cars here. They either walk or they take the MAX.”
— Scott Cruickshank, executive director, Oregon Convention Center

The argument for publicly subsidizing a large private hotel is that it will lure out-of-town conventions to Portland, bringing cash into the region’s economy. But Scott Cruickshank, executive director of the Oregon Convention Center, said last week that almost no one who comes to Portland for an out-of-town convention is looking to park a car.

“If we have a national convention, we have mostly out-of-town visitors who don’t have cars here,” Cruickshank said. “They either walk or they take the MAX. They don’t typically rent cars and drive to the center.”

Cruickshank, like Williams, said he thinks the hotel needs its own parking garage — but not for the sort of national conventions that the hotel is theoretically being built to attract. Both said the planned garage will be useful for attracting local and regional conventions to which most people drive cars.

Wood said he approached Cruickshank to ask if the 800-space garage at the south end of the Convention Center site could meet the hotel developer’s request for 375 guaranteed spaces at all hours. Cruickshank said no.

Not building parking garage would probably kill hotel deal, PDC warns

hotel garage site

The location of the proposed parking garage. Across the freeway is the Moda Center, whose garages have 2,500 parking spaces. Immediately south is the Oregon Convention Center, whose garage has 800 parking spaces.

The Portland Development Commission’s Feb. 10 vote to finance the garage out of its urban renewal funds, previously reported by the Portland Business Journal and NextPortland, does not need to be approved by the Portland City Council, according to Uhlman. That means public funding for the project is a done deal.

(PDC commissioners are appointed by city council. Mayor Charlie Hales, a backer of the hotel, is the commissioner in charge of the PDC. When the city council voted on the hotel plan, only Commissioner Steve Novick opposed it.)

Both the garage and hotel are currently in land use review with the city’s Bureau of Development Services.

According to the PDC’s staff report on the measure, any decision not to finance and approve the parking garage would probably tank the hotel deal.

“If the Parking Garage does not move forward, it is unlikely that the Hotel would move forward,” the report says. “Without the Parking Garage, the Hotel would require a substantial redesign and additional financial resources to fund the required below-grade parking.”

Williams, the parking consultant, said he thinks 375 parking spaces for a 600-room hotel is relatively modest and in line with demand at other hotels. As for the possibility that autonomous car technology might cut the garage’s revenue, he said that’s possible but too vague to base a business plan on.

“It’s a wave that people think is coming, but it’s a wave that has no data,” Williams said. “Let’s just build as little parking as we need.”

— Michael Andersen, (503) 333-7824 –

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