How car parking makes new housing much more expensive

Let’s turn the eastside of Portland in Queens, NY without the transportation infrastructure to support it.

Does this mean developers would actually charge the much lower price? How does a city or state guarantee they would? (Serious questions, not trying to stir the pot.)

An unfortunate aside for someone like me is that I have so many bicycles that I need a garage, basement, or area to store and work on them.

Worse yet, most of the condo buildings that offer secure bike parking are often targeted rather successfully. Nothing more than a relatively cheap commuter would go into one of these spaces. Beyond bicycles I would say the same goes for any sporting goods. I would imagine that solutions to this would become more common eventually, but it is a massive hurdle for me.

Additionally, the a huge detriment to me in a condo are the often very significant HOA fees. Some are nearly the cost of my rent of a bedroom with roommates on the east side.

This issue isn’t whether a builder can put parking or a garage, it’s whether they should be required too. Many apartment complexes in the burbs build garages because they believe there is a market for it. Granted, the municipality makes them build car storage (dumb) but that’s an issue too. To the guy said “I have so many bikes I need a garage” well, think about that. Do you need a room that could be used for housing for your inanimate objects?

My preferred solution to this housing price problem is let the oncoming real estate correction turn the $729,000 town homes in to $280,000 town homes then I can have a garage to put all my bikes in.

Kalifornians all have cars. And demand places to park them.

Seems to me the Townhouse probably has 3 bedrooms, and more certainly bathrooms, the Condo probably only one. If you’re going to make the comparison, at least make it equivalent, talk about price per square foot, etc.

Hello, Kitty
Developers are not really competing with older housing; they are very different things. And I think you are overthinking the motivations of homeowners. I have literally never once heard anyone in Portland lamenting new construction because it would somehow reduce the price of their house by diluting the market. That’s just not how people think.Recommended 0

It is surprising how many inquiries a neighborhood association receives from home owners next to proposed multifamily developments. The inquiries sound benign enough, “As an adjacent home owner next to these proposed apartments, who is looking to sell within the next few years, how will this affect my property values??”

The simple reality is that an area with development potential and activity will translate into higher property values. The fear is that development which fails to personify the “dream” of a detached, single-family household falls short of this ideal and nearby property values could be reduced due to apartments, skinny houses, condos, and other multifamily housing being perceived as “less desirable” and therefore of lower value. This is not the case at all.

Increased housing choices are good for a community’s resilience, its economic diversity, and simply providing a means for which our supply is failing to meet. Nonetheless, concerns of multifamily housing somehow lowering the value of nearby single family households is not an uncommon thing to hear. It may not be directly articulated as a “dilution” of property values but it is not a stretch to read that message behind such concerns.

To summarize, people do fear that new development will lower the price of their home and yet they may not express it in simple, direct terms.

I think many people are resistant to apartments being built because there’s a broad generalization that they bring people who are not connected or invested in the neighborhood; moreover there’s a worry of cars of gobbling up parking and the potential for crime to spike.

…and then there’s the fact that PBOT doesn’t require certain developments to install ADA curb ramps even though they require driveways for auto access…

NE 13th and Saratoga… NE Rodney and Prescott… to name just two

The no-parking condo solution should require the developer to install a few parking spots with electronic charging stations which are owned by the HOA and provide a few vehicles that unit owners would have access and reserve with an online system. Then people would have the option to have a vehicle if traveling where biking/weather/public transportation makes it difficult. I think this would ease a lot of “carless anxiety”, especially given carshares are starting to pull out of metro areas such as SEA (lime) and PDX (care2go).

Hello, Kitty
>>> concerns of multifamily housing somehow lowering the value of nearby single family households is not an uncommon thing to hear. It may not be directly articulated as a “dilution” of property values <<<Because it isn’t a concern about value dilution. I think people do express their concerns in simple, direct terms: they are most typically about noise, light, privacy, and other direct impacts of a large building on its immediate neighbors.Think about it: who says “How will I be able to get full value for my house when the buyer could just rent an apartment next door?” They may say “This sucks; how can I sell my house when there is a loud garbage pickup next door that wakes me up at 4AM?”Recommended 0

A renter and a buyer are in different markets – Someone selling a house won’t think that someone may rent the apartment next door rather than buy the house. It’s more likely that homeowners obviously want to protect the investment of their house – and generally, a house next door to a house will be worth more than an equal house next door to an apartment complex.

Rent is cheaper when you live more compact. Wife and I paid $1500 for two bedroom apartment in a three plex. We pay $2150 now for our own space which we can do whatever we want to. We never had a garage or backyard with our apartment. I suppose one could invest that additional $700 a month at 8% and after 30 years walk away with some cash, but then you’re stuck living in a place that’s never truly yours and subject to increased rent. Our mortgage rate is 4.5% and we’re looking to pay off 30 year loan in 20. We know housing as investment only yields 1-2% as a return on investment, but it’s not subject to the ups and downs as the stock market.

Anderson is not a “reporter” but an employee of a “think tank” that receives financial support from real estate industry figures. I was somewhat skeptical of the $280,000 price point for a new condo in inner Portland and decided to check the source.

I found this discussion in the introduction:

Market-rate sales prices: because the markets in which these zone districts are situated vary widely, the model’s assumptions generally reflect sales prices not as strong as close-in neighborhoods, but not as soft as eastern-most neighborhoods. Feedback from the development community indicates a general consensus about price points converging around the $450,000 mark.

https://www.portlandoregon.gov/bps/article/738561

So it turns out that these modeled sales prices are not meant to reflect inner Portland prices after all.

I will also note that Mr Anderson only lists mortgage costs, and not true monthly costs which should also include hoa fees, insurance, and taxes. Zillow and Redfin estimate these to be in the ~$1520-1650 range for a $280,000 condo.

Great article, Michael! As others have already pointed out, Portland’s housing market has been fundamentally supply-constrained for decades, relative to demand. That’s why prices have risen so much: this is a great place to live, the economy is strong, and there’s much more demand than supply — especially in close-in neighborhoods.

Now that all of the area’s “greedy developers” are no longer limited to single-family zoning, they can build whatever is most profitable. And since (as Michael’s article makes clear) more density = more profitability, developers can now maximize their profits by building stacked flats and thereby help alleviate the housing shortage, rather than by replacing a small, relatively affordable bungalow with a massive McMansion.

It seems pretty clear that with more supply, prices will either: 1) continue to increase, but more slowly than they would with less new supply; 2) stabilize; or 3) start to drop. That’s how markets work. Yes, even housing markets. I’m hopeful that that’ll now start to happen.

However, I’m nearly certain that these $280k stacked flats will, if sold as condos, initially and until the supply:demand balance is restored, sell for WAY more than $280k — maybe even twice that much. And if they’re rented as apartments they won’t be “affordable” either. And that’s ok. Because every developer who makes a ton of money will build as fast as they can — as will other “greedy developers,” and more housing will be added to the overall supply. Again: almost none of this NEW supply will be “affordable,” but the overall regional housing supply will still increase. And as the lower end of the market becomes less supply-constrained, prices at all price-points should stabilize.

…at least until we’re inundated with climate refugees from Arizona.

Portland has plenty of water and is still pretty temperate, IMHO our corner of the nation is unlikely to become a less desirable a place to live anytime soon. Given that fact, even with the recent zoning changes and rapid increases in new housing supply, I suspect that it’s going to be hard for all of the area’s “greedy developers” to build enough housing fast enough to avoid ongoing housing cost increases.