When BikePortland reported last week that the city may slash its goal for increasing biking, the eighth paragraph contained a twist.
The obstacle to advancing our city to 25 percent of trips by bike by 2030 wasn’t actually the biking, city staff said. It was real estate.
“Even in 2035, there are too few jobs too far from housing,” senior transportation planner Peter Hurley had told the city planning commission June 13.
In other words: Portland wants to officially concede that its recently approved comprehensive plan didn’t legalize enough density for Portland to join the ranks of the world’s best cities for biking.
In a sense, this is no surprise. As anyone familiar with Utrecht, Copenhagen, Montreal or Hangzhou could tell you, the single biggest difference between the design of those cities and Portland isn’t the continuous networks of protected bike lanes, paths and low-stress side streets (crucial though those are). It’s the buildings everyone is going to and from.
As Elly Blue wrote on this site 10 years ago, density creates proximity — both by making it legal for more homes to exist close to jobs and by making it legal for more homes to exist close to every single retail storefront, which in turn makes it possible for crucial retailers like grocers to pack more tightly together, reducing the average distance to reach one.
In 2014, we looked at Dutch travel habits to show that even in the world’s best country for biking, most people drive for trips of more than three and a half miles. The crucial difference is that in Dutch cities, trips of less than three and a half miles are far, far more common, thanks to Dutch density.
This is the phenomenon Hurley described in June. Even 13 years from now, too many Portlanders will have to frequently go more than a few miles to get where they’re going.
In part, that’s because most of Portland’s buildings didn’t have the advantage of being built before people used cars. But it’s also in part because city laws make it illegal for Portland to look anything like Utrecht.
Also in 2014, local wonks Nick Falbo and Elliot Akwai-Scott used Google Sheets to create an ingenious online game that challenged Portlanders to bring the citywide biking rate to 25 percent. What most people found, upon playing, was that it was extremely difficult without much-larger-than-planned changes in where people lived.
“Is is realistic to even think we can reach a mode share that high?” Falbo — who is usually anything but cynical — asked at the time.
Portland’s ability to keep building homes depends on its willingness to live without parking spaces
Some people will say that Portland already seems to be getting denser, and that the city’s latest zoning plan will let this continue. They’d be right. Thanks to the post-recession surge of people interested in urban living, parts of the city have been getting substantially denser.
Biking, transit and carsharing have become the city’s best hope for creating new, denser housing and keeping both old and new housing affordable.
This seems to be working. It’s almost certain that a lot of the 5,000 new bike commuters Portland added in 2014 had something to do with the 5,000 new apartments that had opened for leasing across the city in the previous two years.
Also significant: many of those new buildings were constructed with zero on-site parking, the first apartments in decades to be built that way.
And that’s the other half of Portland’s current situation: biking, transit and carsharing have become the city’s best hope for creating new, denser housing and keeping both old and new housing affordable. That’s because these are the transportation modes that make on-site parking unnecessary in new buildings — and on-site parking has turned out to be a crucial tipping point for Portland’s development industry.
The biggest thing going on right now in Portland housing development is that even as thousands of new apartments are being constructed, almost none are currently being designed. The number of large residential buildings being newly proposed fell to almost zero six months ago Tuesday: Feb. 1, the first day that Portland’s inclusionary housing ordinance took effect.
No new buildings in the pipeline means that unless something changes (either in the law or in how buildings get designed and financed), Portland’s housing shortage and further rent hikes are on track to return with a vengeance in approximately 2020.
The inclusionary housing law requires new buildings of 20 homes or more to offer 10 to 20 percent of their homes to lower-income people for less than market rate, essentially paid for with various offsetting subsidies. But if those offsets are too small and almost nothing gets built, the law could backfire — not only would few market-rate homes be built, few below-market-rate homes would be, either.
Almost every developer in Portland is currently convinced that the inclusionary housing law is out of balance. By their estimates, either the mandate is too big or the offsets are too small. If they thought differently, they’d still be adding projects to the pipeline.
But one developer has actually been thinking differently. He’s Dennis Sackhoff (who Battlestar Galactica fans may be interested to know is Starbuck’s dad), a former suburban tract developer whose company, Urban Development Group, has found a niche in the city: apartments with relatively few amenities and no on-site parking. For example, UDG is behind the new Alexander on East Burnside:
Love or hate their buildings — and some have been less than beautiful — Urban Development Group seems to be the only developer in town that’s enthusiastic about the new inclusionary housing rule, for one key reason: one of the offsetting incentives is a waiver of the city’s on-site parking requirements for buildings near frequent transit lines.
Most developers are still looking to include on-site car parking, in part because most of the city isn’t close enough to good transit. But UDG has been able to build without parking, which means the inclusionary housing offsets it’s able to take advantage of are bigger than the ones other developers are getting. In fact, UDG is so enthusiastic about the new rules that it’s been rifling through its backlog of projects designed before Feb. 1 — ones that are exempt from the affordability rule — and voluntarily opting into the program so they can get out of the parking requirement.
- At 2548 SE Ankeny St., a planned 77-home building with about 26 parking spaces and no homes below market rate is set to become a building with 81 market-rate homes, 15 below-market-rate homes and no on-site parking.
- At 316 NE 28th Ave., a planned 74-home building with about 25 parking spaces and no homes below market rate is set to become a building with 101 market-rate homes, 18 below-market-rate homes and no on-site parking.
- At 2789 NE Halsey St, a planned 30-home building with no parking spaces and no homes below market rate is set to become a building with 45 market-rate homes, eight below-market-rate homes and no on-site parking.
- UDG is also asking to convert a trio of projects in Sellwood and Moreland from 187 homes with 55 parking spaces and nothing below market rate to 175 market-rate homes, 35 below-market-rate homes and no parking.
Assuming they’re built, will these buildings turn out to be profitable? Only if people want to live in neighborhoods that are almost certain to become much more crowded with on-street cars.
In other words, these buildings will only work, and other developers will only be able to copy UDG’s template, if the residents are taking most of their trips with something other than a car.
How to weigh in on housing
Fortunately for Portlanders who want to shape the future, the city is in the midst of several different projects that could greatly affect proximity and affordability in the years to come. Last week, the city’s planning bureau sent an email plugging this useful website summarizing them.
The city has five different projects going, all at different levels of completion:
- The “residential infill project” focuses on re-legalizing duplexes, triplexes, cottages and internal home divisions in lower-density residential zones, while also reducing the maximum size of buildings in those zones to reduce demolitions and McMansions.
- The “better housing by design” project focuses on tweaking rules for higher-density residential to balance open space, parking and setback requirements against the need to hold down housing prices.
- The “Southwest Corridor equitable housing strategy” focuses on adding below-market-rate homes along a possible future Barbur Boulevard rail line.
- The “design overlay zone amendment project” focuses on setting more objective standards for design of new buildings so fewer projects will pile up debt while they wait more than a year for approval by a volunteer panel.
- “Inclusionary zoning,” discussed above, aims to create more below-market-rate homes by requiring them in new buildings and providing offsetting subsidies.
You can follow the links to learn more, sign up for notices about each project, or get in touch with their project managers to share your thoughts.
(Disclosure: I work a few hours a week as a writer for Portland for Everyone, an advocacy campaign for abundant, diverse, affordable housing in Portland. But I don’t speak for it here — this analysis is my own.)
— Michael Andersen, @andersem on Twitter
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Notice the decent-sized blue dot for Sylvan for zoning of apartments. It would be fantastic to have more housing there and a grocery store and TriMet bus 56.
Preferences vs. Constraints.
You make lots of excellent points, Michael, if preferences is the lens through which we’re looking at modal distribution. Once constraints take over, though, I’d say all bets are off.
I sense that Michael wants to celebrate this dense, parking-less development as well he and all of us should. What’s not to like about more affordable housing and less parking!, more destinations closer at hand. Portland has so many vacant, underused and, indeed, half used parking lots that must become homes for residents new and old. Of course, my old neighborhood, Multnomah, is having fits over the new apartments there across from my old school. But hey, how else could an older person, who tires of the house and yard routine, stay on the home turf to the end? We need more apartments in inner NE!
I was really confused by the ending of Battlestar Galactica, was Starbuck an angel? some sort of alien? To be honest the ending seemed like they were copping out on a few story arcs.
One would hope that all these urban dwellers start electing representatives that make the central city easier to bike and more expensive to park. But to do that smart people need to run against Amanda Fritz.
I loved the way it ended, except for that part. She just disappeared? WTF was that all about?
Peter Hurley and the other planners at PBOT I respect and admire, but at times they can be amazingly naive or extremely silly. They are making several common assumptions that most US planners make:
1. All persons between the ages of 18 and 65 either work or go to school. The actual employment rate, that is, people who report to jobs and file W2 forms with the IRS, is around 63%, down from about 68% just before the great recession. Some of the other 37% are in school, many are unemployed or otherwise retired, and a great many work in the self-employed cash-only grey economy. Their movements are almost never able to be tracked by local governments.
2. All persons, including the unemployed, retired, and children, travel to and from work or school on a week-daily schedule, using only one mode, and if you add all those numbers, they must equal 100%. Aside from the discrepancy described in #1, most people, including those in Copenhagen, Utrecht, Peoria, and Portland, use multiple modes to get to “work”. Nearly everyone walks (98%) + most people drive, maybe not always, maybe even rarely, though some do drive all the time (70% is the Oregon average) + many people carpool, including parents taking the kids to school, school friends driving together to PCC (officially 10% but probably much higher) + 28% of folks own a bike, and chances are many more than the official 6% rate in Portland have ridden it to work at least once in a while, even if just bike commute week in May (25% according to a recent poll shown on this site) + you bike to MAX, then ride into town, then walk to your office, how are you listed? As a transit user, of course, since TriMet recorded your ride as such (30%) + intercity transit. I prefer AMTRAK, but who doesn’t fly? Lots of business people do, that’s for sure. Ever notice the stacks of bikes at Utrecht Central Station? How many of those riders work there? That’s right, none of them. They are catching the train to jobs in Amsterdam or flights going out of Schiphol Airport. (25%) + Other modes like motorcycle, moped, skateboard, those bikes with walking feet… (14%) = 300% give or take. In other words, John Q Average uses 3 different modes to get around, not just the one assigned to him by PBOT traffic modelers.
3. Because Portland is more or less the same size as Amsterdam and Copenhagen, it must be comparable to each city. It isn’t, nor will it ever be. They are flat, boggy, national capitals with much older histories. If Portland is looking for cities to compare itself to, it should easily be able to find many European cities primarily built up between 1880 and 1970, such as Lille, Mannheim, and Leeds. But then the drawback becomes that there are no direct flights to those cities, so they are not comparable.
Neat point about Lille, Mannheim and Leeds, David! So, some random street views (literally the first places I happened to drag to):
Seems to me that basically every European city is denser than a comparably populated North American city, just because of history. But my main point is that (as you suggest) we’re prisoners of our development history until we stop being prisoners because we figured out how to make our cities change.
What if we were to examine the outliers instead of the average, and ask what they know, why they are inclined to bike now? Or, for that matter ask those who don’t have a car what works and doesn’t work for them? How they manage, what they think about living without a car, if they think of themselves as engaged in heroics or are just taking care of business? It seems to me that there are many potential lessons right under our noses, and potentially almost free, especially when compared to the infrastructural alternatives often contemplated here.
I’ll note that I conducted a study of this sort some years back, looking at super low electricity use in a residential setting in Sacramento. The questions we were after were, who these people are, about which we knew almost nothing, and what they were doing that made such lowest usage possible? Most of my colleagues, and the funders assumed they didn’t exist, that the data, once cleaned, would show the category to be empty. We persevered, and found that ultra-low users were found across all demographic and income categories. While there were more in single-person households, most single person households were not in the ultra-low use tier. The diversity and spread were astonishing, and real. No simple predictor, like income or race or age or education or house size predicted lowest usage.
The reason I bring this up is that I suspect we’d find some surprises if we tried a similar study of transportation patterns, of mode choice. If we then tackled the problem from the bottom – asking how we could leverage the diversity of current bike reliant people in our city to inspire others like them but who currently don’t bike or think of biking as for them – rather than always and predictably from the top, by looking at the mean, I bet we’d learn something.
Suburbs. Places chosen at random. (Now I want to visit them!)
Don’t forget that superfluous culture thing.
None of these cities are especially more dense than Portland, they just look that way:
Portland city pop= 640,000; Density 4,375 persons/sq mi; Metro pop= 2.4 mil
— East Portland pop= 160,000; Density 5,500 persons/sq mi
Mannheim city pop= 306,000; Density 5,500 persons/sq mi; Metro pop= 2.4 mil
Leeds city pop= 782,000; Density 3,670 persons/sq mi; Metro pop= 2.5 mil
Lille city pop=1,015,000 ; Density 5,900 persons/sq mi; Metro pop= 3.8 mil
These on the other hand are a lot more dense, as are Seattle, SF, & Vancouver BC:
Amsterdam city pop= 852,000; Density 12,710 persons/sq mi; Metro pop= 2.4 mil
Utrecht city pop= 331,000; Density 9,080 persons/sq mi; Metro pop= 656,000
Copenhagen city pop= 764,000; Density 22,900 persons/sq mi; Metro pop= 2.0 mil
Montreal city pop= 1,649,000; Density 11,700 persons/sq mi; Metro pop= 4.3 mil
“The bikeways in Montreal inspire people to give cycling a try; but it’s their proximity to ample and affordable residential housing that seals the deal.” photo caption/bikeportland
And their “…proximity to…” employment…paying a sufficient amount that people can afford to live in the “… ample and affordable residential housing…” ?
Unless of course, part of Michael’s idea is that along with the increase in the type of housing he envisions, there will also be a corresponding increase in rail or bus transit sufficient to transport all the residents of this type of housing, to their employment from where they live, typically far, far away here in the Portland area.
Also, what percent of people in the Portland area, currently commuting distances of say 40-60 miles/day(ex; ptlnd to the couv….ptlnd to the beav, or to Hillsboro.), and in the U.S. in general, and living in single family dwellings, really want to live in the type of housing in Utrecht, cited as an example in this story? For example, is this the type of housing that Intel employees are begging for more of out in Orenco, Intel’s location for one of its huge, sprawling centers out in Washington County?
If so, I’m interested in hearing more about that, though doubtful that many Intel employees want to live in that type housing. That’s the type of housing many people live in because they have to because they can’t afford a single family dwelling on their own lot with its own yard and garden and garage. When they can make the money they need to afford single family dwellings, as it seems many highly paid Intel employees are able to, it seems that’s the type of housing they go for.
Will those buildings be accessible? All new builds should be accessible; it’s not just healthy bike riders who need density. We are all only temporarily able-bodied.
Don’t all new buildings need to meet ADA standards?
The Alexander has no parking and 1 bedrooms are $1,500/mo. Which is the same as the average rent for a 1 bedroom apartment in Portland (and that average includes apartments throughout the city, most of which have parking).
But it’s a brand-new building. New construction is usually more expensive than the average rental, and for good reason: old buildings break down and wear out.
Rental rates are typically set by current market conditions, not building costs.
Right, and the market condition is that people will not pay as much for a rental with dings on the walls and threadbare spots on the carpet.
The Alexander was built before the inclusionary housing rules went into effect. Yes, the market has allowed the cost-benefit of fewer parking stalls to be pocketed by developers. In the long run, those apartments will filter much easier into cheaper rent categories than a building with parking.
But now we’re in 2017 and any new apartment with enough units to require parking also has mandatory affordable units. So you will have to come up with a new talking point since swapping 25 parking stalls for 44 new homes (20 of which will be affordable to 80% MFI) is a pretty good deal and a prime example of how the policies some of us have been advocating for actually work.
The point is that absent a inclusionary zoning (IZ) mandate, building cheaper apartment complexes without parking is not resulting in inexpensive housing. Property owners set rents based on what the market will bear. If you reduce construction cost, that simply means more profit for the developer and property owner.
So now we have three years of housing in the pipeline that is not subject to IZ, and will not contain affordable units, and also will not have parking (much of it won’t, anyway).
Eliminating parking requirements has not helped housing affordability. It has simply allowed developers to make more profit by shifting this cost and burden that goes with density (parking of the cars owned by their tenants) from themselves to the residents of their buildings and the residents of adjacent neighborhoods.
IZ has the potential to change this – to actually compel developers to produce affordable housing. It will take years to see if it works.
I support IZ, I think it is long overdue. I think it’s too bad that the city (and state!) waited so long to do it, and spent so long fruitlessly trying to coax the development industry into voluntarily building affordable housing by giving away things (like eliminating parking requirements) without getting much in return.
So now we have IZ and there are examples of parking directly being exchanged for affordable housing, but you have to write a book worming your way around the fact that your narrative is wrong, eliminating parking minimums can provide benefits in lower housing costs now (and in the future) AND more importantly, it leads to MORE homes being built.
You say we gave parking mins away “without getting much in return.” But we are getting mandatory IZ!! That seems worth it to me!
One more thing, the city could have allowed developers all along the option to not build parking in exchange for affordable housing. Why didn’t they? Because folks like you and SDP lie in the way of policy that combats climate change, builds more housing, and doesn’t saddle folks with perpetual payments on stranded assets in 10 years when parking demand is in the toilet.
We gave away parking minimums a couple years ago. We didn’t get widespread private development of affordable housing development in return. Instead we got development like The Alexander with its $1,500 studios.
We finally had to mandate 20% affordable housing via IZ with no-parking-required as a sweetener. We didn’t get widespread private development of affordable housing. Instead we got developers rushing to stuff projects into the pipeline to beat the IZ rules.
How much clearer can it be that no-parking-required isn’t actually enough to make developers choose to build affordable housing or even 20% affordable housing.
We didn’t give “away parking minimums a couple years ago”. The exact opposite happened. In 2013, early in the current boom, the City Council added parking minimums for buildings with more than 30 units. The code had not previously required parking. The parking minimums were (partially) repealed last year, with the new code coming into effect in February of this year.
The Alexander has 69 units, and was submitted for permit in 2014. As such it was required by the zoning code in effect at the time to have parking. The entry to the parking garage is visible in Street View (https://goo.gl/maps/ZCXNpafYT4K2).
Clearly the finances on that building pencilled for the developer even with the added cost of city-mandated parking. There are undoubtedly other buildings that didn’t pencil, and never got built as a result.
Again, WE NOW HAVE IZ.
Buildings with no parking will have affordable units. Part of the way that pencils is that parking is very expensive both in construction and opportunity costs.
You can continue to litigate history, just like Trump keeps bringing up the emails, but I’m going to keep trying to build the city I believe in and I think will best serve my kids and future inhabitants rather than being stuck in the past.
Wow. I had not heard that there are no new designs in the pipeline. That’s sobering. People are going to continue to move here. Where can they all live? Outside the current UGB? The inclusionary zoning rule might have been an unintended disaster.
Even if it is (and I don’t think this is by any means certain yet) that doesn’t mean it’s not fixable. Everyone’s goal for this policy is to maximize the number of below-market-rate units built. If that is accomplished by either lowering the percentage mandate for each individual project or by increasing the offsets, I think most folks should be able to come together around one or the other of those.
2 big reasons no new buildings are in the pipeline.
1) developers heard there would be changes and rushed to get in early.
2) Markets for what is being built, specifically high end expensive housing os saturated in Portland.
“No new buildings in the pipeline means that unless something changes (either in the law or in how buildings get designed and financed), Portland’s housing shortage and further rent hikes are on track to return with a vengeance in approximately 2020.”
What is the evidence to support this statement other than the opinions of developers who don’t like inclusionary zoning?
They might be right, but how much of the dearth in new multi-family projects is from the gut that permitted before February 1 to beat the start date for inclusionary zoning? Wasn’t it expected that flow of projects would temporarily decrease?
To avoid building affordable housing, developers rushed every project they could to get into the pipeline before the inclusionary zoning rules took effect in February. About 16,000 units are now in the pipeline, which represents about three years of construction at the current pace. Those pre-IZ units will proceed through the design and construction process in the normal course, and will not contain mandated affordable units.
Some developers are now discussing ways to get new projects into the pipeline without including affordable units. One idea is to break projects up into multiple buildings of less than 20 units each, because IZ rules only apply to buildings with 20 or more units.
Developers are also looking for other ways to reduce the IZ requirements. One would be to reduce the number of mandated affordable units. Another to would be to increase the incentives awarded to developers in return for IZ, such as allowing buildings to be taller, cover more of the lot, pay less system development charges and taxes, and allowing more of the affordable units to be “remote” i.e. located in other buildings instead of in the new construction. No doubt the city will come under pressure to make those changes in the coming years.
The city is considering other rules that will benefit developers. For example, requiring older masonry buildings to be retrofitted for earthquakes or pay large fines. This will benefit developers because many of those older apartment and commercial buildings cannot afford the very expensive retrofit work within the time allowed, and will instead be demolished, freeing up those lots for development of new buildings, while displaced tenants look for new housing.
John, could you define the difference, as you see it, between “benefiting developers” and “making it possible for a meaningful number of homes to be constructed in the city so we can keep up with population growth”? I assume you want the second thing to be possible, and I also think most of us can agree that if the “offset” gets big enough, eventually it turns into a “subsidy,” which would be a waste of public dollars. But it’s not like “development being financially possible” is a bad thing — in fact it’s the means by which we’re all aiming to create below-market-rate homes where today there are none. No new buildings, no new below-market-rate homes.
I guarantee to you that any developer would be happy to put below-market-rate units in their building as long as they can make a standard 4% fee off the project. It’s entirely possible that some sort of erroneous groupthink is keeping folks from realizing that profitable projects are still possible, which is why I’m so glad to see Sackhoff’s company taking the risks they are and hopefully proving a new model.
We can maximally benefit developers by allowing them to demolish existing lower-priced housing in close-in locations already considered very desirable, to build high-priced housing designed for maximal density/height and lowest construction cost, while further maximizing their profits by eliminating fees, taxes, and requirements.
We can maximally benefit the public by incentivizing developers to focus on further-out areas currently suffering from under-investment, to build lower-priced housing with livable-scale density/height and design, and with sufficient fees, taxes and requirements to fund the transit, recreation, utility and other infrastructure needed in those areas.
A balance must be struck between these two extremes, keeping in mind that the ultimate purpose of this city is to benefit the public.
Many, and some would say most, of the city’s recent actions have been to benefit developers. Most of the various stakeholder advisory committees (“SACs”) are dominated by persons involved in the development industry. The city ombudsman and others have reported on the resulting conflicts of interest, in which SACs recommend changes that directly benefit SAC members. Many Portlanders increasingly feel that city decision-making has become overly pliant to development interests, with insufficient attention to ordinary citizens’ voices and interests.
BTW, moving some city offices to Gateway Green would make sense. The city needs to really focus on developing jobs, transit/bike, housing, amenities in East Portland. Perhaps we should reconsider spending $200 million to refurbish the “Portland Building” in downtown, and re-direct those funds to East Portland.
I don’t care about benefiting developers, only the public.
That said, it does not seem to me that bribing developers to put lots of market-rate homes in Gateway (or wherever) would be a better use of public money than simply making it legal to build mixed-income housing in places that are already closer to jobs/transit/bikeways/schools such as Multnomah, Irvington, Eastmoreland, Laurelhurst, or the neighborhood I rent in, North Tabor. In most of those areas, minimum lot sizes and maximum unit counts currently mean that zero homes of any age are currently affordable to anyone making anything close to the median income.
But I think we disagree on this.
“acknowledge that the preferred housing location for a family working outside of Portland city limits is outside of Portland” . . . I’m not sure what you’re getting at, but what is the argument against the quoted statement?
“…Many, and some would say most, of the city’s recent actions have been to benefit developers. …” john liu
It’s their money… the developers’, that the city is trying to persuade they should invest in projects. In order to have that investment happen, the city, of course, wants to benefit the developers, or have them at least feel they stand a chance of making a buck…lacking that, not losing money on a project, or going broke on a deal. Ultimately, in an ideal outcome, the residents of the city and the city itself, benefit more than developers do, by far.
What I gather as a casual observer of how business works related to housing and commercial development, is that it can be very tough for cities to have investments by developers made. Developers don’t want to invest their money into something if they don’t think they’re going to make any money. There’s risks involved, but how much risk should they be expected to take? How strong is the market for a type of housing or commercial development envisioned by the city? If it’s not strong enough to entice a developer to get into it, that’s a problem unless the city is prepared to go it on its own.
Out in Beaverton, property around The Round, and now also, City Hall right across the light rail tracks, offer examples. This has been cleared property for maybe ten years now. In an urban renewal district. The city has been trying all this time to get someone to invest in this property. It’s been very tough going. I think the city may have a solid investor for part of the Westgate property just west of City Hall. Just south of City Hall, a local property owner is now in the process of turning one of their land parcels into a food pod. Plans look good. Success there, could inspire interest of other developers in investing in some of the surrounding properties, almost all of which are currently have on them, low level, low value structures. Maybe more housing will be what developers will become interested in having built. It’s a ‘wait and see’ process, but of course, the city probably is going to have to do a fair bit of incentivizing to help it happen.
but it’s not about being profitable. It’s about getting the most profit. That’s why they build what they do where they do. Building smaller, less expensive units in places like Gresham would still make money, but when you can do a building that makes more money, why do the smaller one? Have you seen how much the yard sold for? Who wouldn’t build those buildings?
The “16,000 units are now in the pipeline” statistic offered by the Housing Bureau is meaningless without comparing it to many projects were in the pipeline, say, a year before. Is it more than in January 2016? If so, how much more? Bear in mind “pipeline” likely includes anything that it’s in design review, permit review, or under construction. Going from early design to occupancy takes a couple years at best, so there’s no point in comparing the 16,000 number to the number of building permits issued every year.
It is undeniable that there was a huge rush of permit applications filed in the months leading up to the IZ rules and a dramatic decline in permit applications as soon as the IZ rules became effective.
Agreed, 16,000 units in the pipeline does not mean that 16,000 units will be built in the next 3 years. Projects can be cancelled based on economic conditions. One large apartment building project in the Lloyd District may now be changed to an office building. Rent inflation has slowed greatly in the past year. New apartment building are having to offer more concessions (a period of free rent, etc) to meet their occupancy goals. This is part of a national trend of lenders and developers getting nervous about possible over-building of multi-family projects. If the economy slows, projects will start getting cancelled.
If a market-rate (read: expensive) pre-IZ project gets cancelled, will an affordable or IZ project take its place? Doubtful.
My point is that you can’t take 16,000 units “in the pipeline”, divide it by the 5,000 units or so the city has been *permitting* a year, and conclude there are 3 years worth of projects in the pipeline.
And while there certainly were a lot more applications filed in December and January than is usual, I haven’t seen any evidence (let alone compelling evidence) that they were enough in number to compensate for the near zero applications submitted in February through July of this year.
You’re right, Jim — this statement is only true as long as “no new buildings in the pipeline” remains true. And I’m certain that the large backlog of plans submitted before the Feb. 1 deadline is partly to blame for the dropoff. It remains to be seen how many of those buildings are going to actually be built.
One thing to think about here is that if the public offsets currently offered for inclusionary housing were as excessive as John (for example) is suggesting, I think we would see a bunch of developers (not just Sackhoff) voluntarily opting into it by resubmitting their old plans under the new rules and pocketing the subsidy. The fact that Sackhoff is the only developer doing this, and that they’re doing it by removing on-site parking, strongly suggests to me that the additional “cost” of the IH policy is similar to or less than the cost of on-site parking, at least for commercial zones in close-ish east-side neighborhoods.
If a project under the pre-inclusionary zoning (“IZ”) rules will be profitable, and a project under the IZ rules will be “less” profitable, a developer will choose the pre-IZ rules. The IZ project doesn’t have to be unprofitable to drive this decision – just less profitable.
Also, the IZ rules are new and there is uncertainty about exactly how they will be applied. For example, an IZ project is eligible for a substantial height and density bonus, but the required height and density re-zoning won’t be effective until next year under the 2035 Comp Plan. If you’re a developer, do you roll the dice and submit a IZ project now? Or do you focus on your pipeline of pre-IZ projects, that you can develop under pre-IZ rules that are known and understood? Most businesses (and their banks) prefer to avoid uncertainty.
I do think the IZ rules include very substantial benefits to developers, and I am hopeful that over time more IZ projects will be started. With three years’ worth of pre-IZ projects in the pipeline, we’ll have to be patient.
I’d say that that’s all fair, though with a 20% inclusion rate that also applies to the additional building size allowance, the additional allowance isn’t necessarily going to help the project happen. My understanding is that’s why the developers didn’t ask for more of the incentive to come in the form of size or height.
I just posted another comment above explaining why, but we do not have “three years’ worth of pre-IZ projects in the pipeline”.
Somewhat tangential, but I would like to see the City of Portland move its offices to Gateway, renting out its downtown buildings to private companies. That would 1) help Gateway develop as an additional hub for employment and housing and 2) why the heck are we using tax dollars to fund municipal offices in the most expensive parts of town?
FWIW I completely agree.
I’d assume it’s the same reasons we’re using tax dollars to fund low income housing in the most expensive parts of town.
I don’t think the housing bond has been used for anything like that (yet – it could still happen), and the requirements for developers to build low income housing don’t cost tax dollars, do they?
IZ projects get partial exemption from system development charges (SDC) and construction taxes. Thus an IZ unit does in fact cost SDC and tax dollars.
(SDCs are the charges that developers pay, that the city uses to fund infrastructure and other costs created by the additional population density).
I am not sure what to make of the delay in spending the affordable housing bond money. Up to now, city-funded affordable housing has been really quite expensive. The $258 million bond was only projected to fund 1,300 units, or about $200,000 per unit (including units to be refurbished as well as new units to be built). In general, cities are finding that publicly-funded construction of affordable housing is very expensive – more expensive than for-profit non-affordable units. See links below for some articles.
I have heard that Mayor Wheeler put the brakes on spending the bond money until the city can figure out how to get the costs down. If that is true, that’s maybe a good thing?
Downtown is the center of the city. From a practical and convenience standpoint, it makes sense to have government offices in the center of the city so everyone from surrounding areas needing to do business with the city, has roughly equal travel distances to those offices, depending on their distance from the center. To cut travel time down and improve convenience, the city could set up some satellite offices in neighborhoods to help expedite business transactions, permitting procedures and so forth.
The geographic and population center (centroid) of the city is in the Hollywood District.
Is that all you’re saying? Hollywood isn’t Downtown, which also is the business center of the city.
Yes – there are 300,000 people in SE and East Portland alone, vs 115,000 in NW and SW. (Source: http://www.portlandonline.com/portlandplan/index.cfm?c=52257&a=288621) Add in another 100k people in Central North and NE and it’s pretty clear that if shorter average travel time to city services is the priority, that Gateway would be substantially better than downtown offices.
And it’s not an all or nothing either. I bet that direct customer service staff are a small minority of city staff. No reason we couldn’t keep those downtown and move the rest of the workers out to cheaper digs.
You’re right. The city population centroid is the southeast of Hollywood, probably on Mt Tabor, with a commanding view of downtown.
Probably just as well to move city government to Gateway, as the downtown is scheduled to liquefy during the next big earthquake, and what doesn’t collapse will get flooded by the resulting tsunami. The Maintenance and Water bureaus are already on the other side of the river, as are two police stations and most of the fire stations, and the main water reservoirs are on Powell Butte & Kelly Butte. All 3 of the Bull Run aqueducts run through East Portland. PSU wants the 1900 Building for $29 million, so Planning and BDS could be moved immediately.
Looking at this website https://affordablehousingonline.com/housing-search/Oregon/Portland (and it is a little unclear because there are different buckets of below market rate housing) yields the following results:
There are about 120,000 rental units in the City.
About half of renters (or about 60,000 of the units) have rates that are “overburdening” the occupants (generally accepted definition is that rent >30% of income). Apologies for the rough math.
The inclusionary zoning plan is looking at adding (optimistically, if developers start proposing projects again) 1,000 units per year in below market rate housing. If we wait a few decades, the BMR housing might finally start making a dent in the affordability gap, but realistically it is a drop in the ocean.
When you look at these numbers, it becomes clear that the only way to address the housing affordability issues for the vast majority of overburdened renters is to figure out how to make market rate housing cheaper.
” the only way to address the housing affordability issues…”
this kind of narrow language is quite silly not to mention unhelpful. If we insist on defining the spectrum of solutions as always and only encompassing housing supply strategies, fine. But why would we do that?!
You may notice that when you define the problem in that way all solutions lead down very frustrating blind alleys, just as you discovered in your last post.
#lack of imagination
I didn’t say anything about supply issues. I’m saying when the issue is afflicting 50% of the population you have to fix the market. Creating a “below market rate” carve out can never adequately address such a large problem.
Actually I think you (and pretty much everyone else) did.
There is housing supply (buildings, cheap and not cheap, old and new) and there is housing demand (people, poor and not poor, currently housed and not). These discussions, interesting though they always are, *never* allow that the demand side of the equation offers some strategies that could be useful toward achieving the goals we (mostly) share. I would even go so far as to suggest that they offer an end run around the whole problem. The fact that this is ruled out of order is unfortunate. I’m not criticizing Michael’s piece – his focus is on other dimensions of this – but in the comments I am pretty much the only one to ever raise the demand side, the population growth aspects, of this. Seems kind of odd, no? I mean, just because it is easier not to talk about population growth isn’t really a very persuasive reason to abridge our conversation deny ourselves the opportunity to actually make some real progress.
I am trying to think of how you make sure that limitations on growth help the people who can’t afford it here. Let’s say we put a hard cap on city population. Why would we assume that the people who live here would be the ones who get to stay? If living in Portland becomes an even more scarce asset, I imagine that the rich and politically connected would be able to screw over the disadvantaged in a competition for that asset as well.
See, this is the problem with never fleshing out the details.
Can you explain how you get from –
“Let’s say we put a hard cap on city population.”
“If living in Portland becomes an even more scarce asset” ?
That is not how supply and demand works. You seem to be confusing a limit on population with a limit on square footage. To take your idea about limiting the city’s population (demand), that says nothing whatsoever about housing construction, infill, etc. (supply). In fact it says the opposite. By capping population growth, all these great ideas people trot out here about supply are great, but are wholly inadequate to solving this problem without addressing exponential population growth. But if we were to contemplate how to wrestle with population growth, come up with strategies for this, then all those ideas could actually deliver, make life better and enable more people to be housed.
It is not hard; we just don’t have the will to tackle the dimensions of the problem that aren’t fundamentally economic, or market-compatible.
I am fully aware that we don’t have the means or the will to ‘cap population growth’ as such, but as Hello, Kitty pointed out here the other day, there are and could be lots of derivative strategies that could be tried and tweaked to counter our current set of policies which incentivize and reward additional people (millions) moving here.
Good points and I’ll let you have the last word.
Asking a serious question: can you give examples of those derivative strategies? Restricting internal / domestic migration feels pretty powerfully authoritarian to me and not very appealing. While the status quo sucks, I do think it’s better than either forbidding people to move here or discouraging people from moving here (though it depends on the specific approaches, I guess).
How do you think this might be approached?
“Restricting internal / domestic migration” is essentially banned by the US constitution.
“Asking a serious question: can you give examples of those derivative strategies?
How do you think this might be approached?”
Thanks for asking. I will reiterate that this kind of policy, and discussions of it should be approached with caution, mindful of unfortunate past hijackings of this topic by xenophobes and racists.
Just to get things started, I would respond by suggesting we look at sunsetting or reversing the child tax credit. In a full world there is no logic in rewarding fecundity. A fascinating document on the subject of population growth, which I’ve linked to in the past, is the 1972 Rockefeller Commission Report. The findings may surprise you, not to mention the fact that most of us have never heard of it, do not know there ever was a high level commission tasked with asking these questions.
“After two years of concentrated effort, we have concluded that, in the long run, no substantial benefits will result from further growth of the Nation’s population, rather that the gradual stabilization of our population through voluntary means would contribute significantly to the Nation’s ability to solve its problems. We have looked for, and have not found, any convincing economic argument for continued population growth. The health of our country does not depend on it, nor does the vitality of business nor the welfare of the average person.”
We could decide, as a state or region to stop subsidizing new housing, stop paying businesses to locate here, cap the number of license plates we issue, or the number of building permits …. but my off-the-cuff suggestions aren’t nearly as interesting or well-articulated as Andy Kerr’s list of 25 Actions to End Growth in Oregon. Here’s his list: http://agoregon.org/files/25%20Actions%20for%20Oregon.pdf
I don’t agree with every word he writes but the gist of his pitch is definitely worth considering.
““Restricting internal / domestic migration” is essentially banned by the US constitution.”
Yes. And slavery was also once included through the three-fifths clause. And I learned recently that we also are forbidden from creating an HOV lane from an existing lane but must build an additional one for this purpose. There are thousands of laws and statutes that never made any sense or have outlived their usefulness and should really be abolished or rewritten.
I am fully aware that the Interstate Commerce Clause would need to be revisited to literally restrict population movement across state lines, but there are many other ways we could approach this set of issues if we as a state came to the conclusion that it made sense.
The 25 actions to limit growth are mostly wishful thinking and some are outright harmful.
If people want affordable housing, we need to quit trying to freeze things to conform to a tiny sliver of history that benefits a select few who disproportionately belong to privileged groups. If you don’t build up (i.e. increase density), the only alternative is for people to be spread out which requires more transport for both people and goods.
Well intentioned ideas such as rent controls and requiring units to be provided at below market rates exacerbates the problem by reducing the quality and quantity of housing for everyone not getting this benefit and it builds in strong incentives for people to stay in housing situations much longer than it makes sense.
Providing valuable assets at below market values causes problems because it encourages behavior that wastes resources — allowing the streets to be used for free or extremely low cost storage of vehicles is a case in point.
The US does not need closed cities. The whole logic behind closing them ultimately relies on the recognition that the residents get a disproportionate benefit not enjoyed by others.
One way to test the political feasibility of restricting immigration is to try and prevent homeless people from moving here or even to restrict services to homeless people who are from here. If we can’t keep out people who contribute nothing and take up resources, how can we keep out people coming here for jobs or who who start businesses or can afford to live here and pay taxes and fees.
for your test you stick it to the most vulnerable, who are not actually driving up rents or ruining it for everyone else. Whose ecological footprint is so small it is very nearly imperceptible.
did you actually read Kerr’s piece?
“The 25 actions to limit growth are mostly wishful thinking and some are outright harmful.”
“If you don’t build up (i.e. increase density), the only alternative is for people to be spread out which requires more transport for both people and goods.”
You don’t appear to have digested the central tenet here that growth is not inevitable, needn’t be subsidized, and, moreover, if we were to stop it then we could skip your zero-sum, lose-lose, build, build, build framing of the problem.
It can be difficult trying to have a conversation with you.
I got that part just fine. As a matter of fact, that’s practically the only solid concept in the whole document which is really a manifesto written by sloganeer who doesn’t have any particular insights.
Just because I don’t buy into unlimited growth does not mean I agree that the population of the city should be static.
Public transit, distribution of goods, maximization of natural resources, etc works best if people are densely populated. Otherwise, you need to move both people and stuff around. Even if the population of Oregon falls over time, it still makes sense for people to be in cities.
There seems to be this concept that the people who are already here have some inalienable right to be here and the others are somehow messing it up. This is a new state, and its history is not good. There are people alive today who have met people who personally assisted with driving the original inhabitants off the land.
This place is especially homogeneous by design, and why that should be intentionally perpetrated is beyond me. When people talk about protecting history, it’s a tiny sliver that protects their own interests and has nothing to do with the population as a whole.
“Just because I don’t buy into unlimited growth does not mean I agree that the population of the city should be static.”
Well how would you then proceed? What actions would follow from your recognition that unlimited growth is problematic?
Growth needs to be managed, and there also needs to be a recognition that even if the population of the state falls, it still makes sense for the population of certain places within the state to increase.
How to do that is a complex topic, but it boils down to policies that encourage the right behaviors/infrastructure/whatever and discourage harmful ones. There are a lot of things we shouldn’t be subsidizing, but some kinds of development could be good in the long term. Having said that, I think people overestimate the influence of tax and legislative policy on behavior as those things are too unstable to make long term plans on.
We cannot forget the business location side of this problem. Focusing on housing alone, while the businesses choose to build outside of the city does not actually solve the stated problem.
There is a certain irony in the fact that the taxation to implement transit and housing programs contributes to the proximity problems. Either that, or you acknowledge that the preferred housing location for a family working outside of Portland city limits is outside of Portland.
“acknowledge that the preferred housing location for a family working outside of Portland city limits is outside of Portland” . . . I’m not sure what you’re getting at, but what is the argument against the quoted statement?
“…Portland wants to officially concede that its recently approved comprehensive plan didn’t legalize enough density for Portland to join the ranks of the world’s best cities for biking…
…In 2014, we looked at Dutch travel habits to show that even in the world’s best country for biking, most people drive for trips of more than three and a half miles…”
And that’s before topography is factored in. Amsterdam is really, really flat. So are portions of Portland, but most people will need to move through sections that aren’t.
For people to want to ride bikes to get around, it needs to make sense to them. Spending large periods of time on bikes with little cargo capacity that they can barely move is a hard sell.
Not arguing with you, but I think it is naive and simplistic to think that density is the primary factor in bicycling mode share (% of people who get around by bike).
Link below shows some cities more dense than Portland: Seattle, New York, Boston, San Francisco, Amsterdam, Chicago, Los Angeles, etc. Of those, the only one with a higher bike modeshare than Portland is Amsterdam. So clearly density does not create high bike share.
I think that high bicycling mode share results from a combination of
– good bicycling infrastructure (probably not a controversial conclusion here)
– good norms of driver/cyclist behavior (safe driving, safe riding)
– flat topography (obviously – but e-bikes may affect this)
– healthy population (although there’s some chicken-and-egg aspect, I imagine)
– good transit (so people have an alternative when cycling isn’t convenient, like when the weather is foul, and also for mixed-mode commutes)
– disincentives for car use (also probably not too controversial here) and incentives for bike use (the flip side that doesn’t get talked about much).
– manageable weather (but see transit)
– density (to a degree . . . if the route is flat and the bike lanes/roads good, a 5 mile ride isn’t that much less attractive than a 3 mile ride, the extra 2 miles will only take an extra 10 minutes).
I am really disappointed by the city’s rush to water down its bike mode share goals. The rationale for that is naive, simplistic, and maybe worse. Build good bike infrastructure, slow cars down, improve transit – don’t just throw up your hands and say “sorry, unless you all want to cram into expensive high density housing packed into the city center, we’re going to give up on our bike mode goals”. That’s passing the buck . . . and feels like an excuse to not invest in better bike infrastructure where it is needed, e.g. East Portland etc.
I’d discount the weather. According to a list of the 700 cities with the greatest bike mode share, where Portland is #157, most of the top cities have much wetter and colder weather than Portland: http://www.cityclock.org/urban-cycling-mode-share/#.WYdPOoqQzDY
I would add to you list: Having a young college-age population with actual degrees or pursuing degrees (as opposed to military personnel, who are often the same age.)
“…I think that high bicycling mode share results from a combination of …” john liu
Infrastructure favorable to biking, are important, it seems to me, as well as reasonably level terrain. I feel that proximity of home to key weekly and daily services and destinations may be equally important to enabling daily increases in use of bikes for travel.
From the point of everyone interested in aiding increases in this mode of travel, how many such destinations and services is it manageable to pack into say, the 3.5 mile radius that’s frequently cited as the distance people will ride in cities having high bike share road use? To aid increases in walking, an even smaller radius within which key destinations and services are located, is great. I’d say, one mile radius, approx 20 min walk from side to side.
There’s a a couple of assumptions here I’d like to challenge:
1. That additional housing density needs to be congruent/adjacent/in proximity to the Central City to move the dial on bicycle mode share. Not everyone works downtown. In East Portland, where the population density is increasing the fastest (in all Comp Plan Scenarios) the majority of folks do not work in the Central City.
2. That it’s just about housing/bike infrastructure. If we’re looking beyond Nick’s game that just focused on adding biking infrastructure and looking at modeling increases in Housing we should also be looking at strategically increasing Jobs density – I’d wager you’d get a lot of bang for your buck if there was a concerted effort to increase the number of Multi-family developments along the 205 MUP coupled with building up Gateway as the secondary downtown/central city that all the local and regional land-use strategies intend it to be. This is a case where we’ve already got a stellar piece of infrastructure in place that could be leveraged.
“…the secondary downtown/central city…” potter
The central city, surrounded by multiple secondary downtown’s as needed to supply as many as is manageable and reasonable within a confined area, of the residents’ daily needs. Effectively, some neighborhoods in Portland could fill out to become townships in their own right, having enough of what residents need, so that a majority of them don’t have to be driving to Downtown Portland, Vancouver, west to Beaverton, Hillsboro, Clackamas and so on, to answer those daily needs.
1) The largest share of workers living in East Portland still commute downtown, but there is also a large share that work within East Portland, particularly the Columbia Corridor industrial area. Still, 85% of people living in East Portland do not live in East Portland, according to the Longitudinal Employment-Household Dynamic (LEHD) data, freely available at https://onthemap.ces.census.gov/
2) Gateway and the 205 corridor is already zoned fairly dense, but we haven’t seen the development out that way because the market will not yet bear it. Jobs that are similar tend to cluster together, so until there is a critical mass, it will require significant public resources to make Gateway a desirable place to do business and to live.
I’m not sure where you’re seeing commuters that live in East Portland commuting downtown. Most commute to 97080. The next highest destination is 97230 which is in East Portland. All of the downtown zip codes combined barely add up to 2% of workers.