The Affordable Housing Thread

[mhays]

My point was about displacement, not construction. Maybe that was from the thread that preceded this one.

Obviously workforce housing is important to have a lot of in transit-friendly areas. And the truly low-income housing is best located in these areas as well since its residents depend on transit. The key is a high density of these units. And it's fine to tear down existing units if they're not dense enough depending on the location.

Some of that has nothing to do with your posts.

[2oh1]

Originally Posted by mhays

My point was about displacement, not construction

Gotcha. I didn't realize that. That makes a huge difference.

Originally Posted by mhays

Obviously workforce housing is important to have a lot of in transit-friendly areas. And the truly low-income housing is best located in these areas as well since its residents depend on transit. The key is a high density of these units. And it's fine to tear down existing units if they're not dense enough depending on the location.

On this, we agree.

I had a real shocker last night. A friend emailed me a listing for an apartment and I realized I knew place she was looking at because I almost rented it back in 2005 when it was renting for $875 - but ignore that price, because it needs to be adjusted for inflation. $875 back then would be $1,052 in 2015 dollars... though the building is also ten years older, whereas it was almost new when I looked at it.

How much is that same apartment renting for today? $1605. The building is ten years older, but even after adjusting for inflation, rent increased by over 50%.

That's nutty. And it's scary, but it's also a sign of the times.

Over the past decade, downtown got swanky. The West End became hip and trendy and it spilled over all the way to the Park Blocks. Eliot Tower. Benson Tower. Ladd Tower. The Indigo. Prices at the new lux buildings aimed for the sky, pulling prices at the older buildings skyward too as the neighborhood became more desirable.

Does this look like the kitchen of an apartment renting for over $1100 a month? That's the whole kitchen, except for the fridge which would be off to the left.



Ho. Lee. Cow.

It's not just downtown, of course. Prices are rocketing upward everywhere. A friend in Irvington just watched her rent go up by $200 again this year. Inflation does not push rent up that much, that fast, in old buildings. The rebirth of Lloyd has barely even begun, but it's going to push lots of people out of Irvington. I wouldn't be surprised of the changes coming to inner SE price most long time residents out.

I'm sure other cities have experienced this dramatic shift as well. Was there a time when NYC was affordable? Was there a time when San Francisco was affordable? Maybe, in another forum a few decades from now, somebody will be asking "Was there a time when Portland was affordable?" I'll be the first to admit, I had no idea how spoiled I was by the price of rent downtown as recently as a few years ago. In 2008 was renting a 515 sq/ft loft with hardwood floors, a gas fireplace and floor to ceiling windows for $745. Downtown. A friend was renting a loft in Eliot Tower when it first opened. 650 sq/ft for $800 a month. Adjusted for inflation, that's not even a thousand dollars today, but I guarantee the unit rents for over $1,700 now. Today, it requires subsidies and incentives to get housing built at prices that are still higher, even after adjusting for inflation, than larger units used to rent for without subsidies or incentives.

Obviously, there's a housing crunch. We need more market rate and affordable housing. I hate the term "market rate" because, these days, the market rate aims for luxury. What we really need is middle class and workforce housing. But even if we could get enough new housing built to satisfy demand, it wouldn't push down prices because more and more people are coming to Portland every day, not to mention that our booming tech economy is redefining what it means to be middle class in Portland.

[58rhodes]

Originally Posted by 2oh1

Gotcha. I didn't realize that. That makes a huge difference.



On this, we agree.

I had a real shocker last night. A friend emailed me a listing for an apartment and I realized I knew place she was looking at because I almost rented it back in 2005 when it was renting for $875 - but ignore that price, because it needs to be adjusted for inflation. $875 back then would be $1,052 in 2015 dollars... though the building is also ten years older, whereas it was almost new when I looked at it.

How much is that same apartment renting for today? $1605. The building is ten years older, but even after adjusting for inflation, rent increased by over 50%.

That's nutty. And it's scary, but it's also a sign of the times.

Over the past decade, downtown got swanky. The West End became hip and trendy and it spilled over all the way to the Park Blocks. Eliot Tower. Benson Tower. Ladd Tower. The Indigo. Prices at the new lux buildings aimed for the sky, pulling prices at the older buildings skyward too as the neighborhood became more desirable.

Does this look like the kitchen of an apartment renting for over $1100 a month? That's the whole kitchen, except for the fridge which would be off to the left.



Ho. Lee. Cow.

It's not just downtown, of course. Prices are rocketing upward everywhere. A friend in Irvington just watched her rent go up by $200 again this year. Inflation does not push rent up that much, that fast, in old buildings. The rebirth of Lloyd has barely even begun, but it's going to push lots of people out of Irvington. I wouldn't be surprised of the changes coming to inner SE price most long time residents out.

I'm sure other cities have experienced this dramatic shift as well. Was there a time when NYC was affordable? Was there a time when San Francisco was affordable? Maybe, in another forum a few decades from now, somebody will be asking "Was there a time when Portland was affordable?" I'll be the first to admit, I had no idea how spoiled I was by the price of rent downtown as recently as a few years ago. In 2008 was renting a 515 sq/ft loft with hardwood floors, a gas fireplace and floor to ceiling windows for $745. Downtown. A friend was renting a loft in Eliot Tower when it first opened. 650 sq/ft for $800 a month. Adjusted for inflation, that's not even a thousand dollars today, but I guarantee the unit rents for over $1,700 now. Today, it requires subsidies and incentives to get housing built at prices that are still higher, even after adjusting for inflation, than larger units used to rent for without subsidies or incentives.

Obviously, there's a housing crunch. We need more market rate and affordable housing. I hate the term "market rate" because, these days, the market rate aims for luxury. What we really need is middle class and workforce housing. But even if we could get enough new housing built to satisfy demand, it wouldn't push down prices because more and more people are coming to Portland every day, not to mention that our booming tech economy is redefining what it means to be middle class in Portland.

that is awful

[maccoinnich]

Originally Posted by 2oh1

Was there a time when NYC was affordable? Was there a time when San Francisco was affordable?

Yes, there was. I don't know what the date is for San Francisco specifically, but California as a whole hasn't produced enough housing to keep up with population growth since 1989.

Rents have risen rapidly in Portland due to shortage of housing built during the recession, which happened to coincide with an increasing population and the continued desirability of close in neighborhoods. As I mentioned upthread, the high number of buildings being built is having the expected and desired effect - rents dipped slightly in Northwest Portland last year.

[2oh1]

I understand they dipped slightly, but I can't imagine them ever coming back down. Even before the recession, prices in NW were skyrocketing. A 1br apartment on NW 22nd that rented for $550 in 2003 had escalated to above $1,000 before the economy crashed. I'd guess it's over $1,400 today, but I might be seriously underestimating with that price. It could easily be over $1,600.

Edit: it was still at $525 in fall of 2005 when my friend moved out because she'd bought a house. By 2008 it doubled.

[Nunya]

To the original question of the thread:

I think providing affordable housing should be a goal but it should be readily obvious that many of the other things that people are advocating for also make it harder to do that. Increasing density means higher prices (once you get beyond single family). Building taller and building interesting buildings means higher prices. Making vibrant attractive neighborhoods that are desirable equates to higher prices. The UGB creates higher prices, etc... (i.e. making a city not suck makes people want to live there, big surprise) Its not possible to have everything all at once, which ones do you want to cut?

People bemoan the low-rise buildings and want the sexy tall buildings, but the sexy buildings are never going to provide significant affordable housing. Even when it is required as a percentage of a new building it only means that the market rate parts of the building have to pencil out at an even higher number to support the affordable components. I'm not sure this is the best policy in the long run. We are never going to be a city dominated by skyscrapers so spending such huge amounts of money focused on little return seems foolish.

More areas need to be opened up to development (within the existing city, well beyond the core areas we typically discuss) to allow much denser mid and low rise development. Forcing all development into small areas makes land costs higher and makes it more difficult for many potential denser low-mid rise buildings to be built. I'd take the transit based zoning much further and allow much higher densities and heights anywhere near transit stops. The low/mid rise dense developments are much more likely to provide market rate housing closer to affordable housing and much easier to subsidize and/or for the City to build directly themselves. Spreading it out to multiple areas also makes it easier to provide different range of options. I think we need to stop thinking about one core central area and instead have multiple very high density nodes and then high density areas between them along transit corridors.

Then also provide incentives for including affordable housing in the sexy high rise buildings as well. How about allowing an additional floor (or 1.5 floors or 2) of height beyond FAR limits for every floor of affordable housing provided. The floor plate sizes would still be limited by FAR but let the penthouse views subsidize the affordable housing.

</soapbox>

[2oh1]

Great post, Nunya!

[maccoinnich]

Originally Posted by Nunya

I think providing affordable housing should be a goal but it should be readily obvious that many of the other things that people are advocating for also make it harder to do that. Increasing density means higher prices (once you get beyond single family). Building taller and building interesting buildings means higher prices.

I would question this. There are certain things that make multifamily construction more expensive than single family, such as the need to add sprinklers. However most multifamily buildings are built a square footage price not that different to single family houses. The largest single cost in building a new house in Portland (or most other large cities) is land, and single family houses are an incredibly inefficient use of land. The only reason we see so many single family houses demolished and replaced by another single family house is that's all that is allowed in the R5/7/10 zones. If builders were allowed to build duplexes or triplexes they might well do so, and would create new houses that were much more affordable/

Originally Posted by Nunya

Then also provide incentives for including affordable housing in the sexy high rise buildings as well. How about allowing an additional floor (or 1.5 floors or 2) of height beyond FAR limits for every floor of affordable housing provided. The floor plate sizes would still be limited by FAR but let the penthouse views subsidize the affordable housing.

The City is looking into doing something like this as part of revisions to the Zoning Code coming out of the new Comprehensive Plan. There are currently a whole range of bonuses for height / FAR, some of which are so esoteric that they have never been used (you can get an FAR bonus for building a theater on Broadway; no one has so far taken them up on this offer). The plans is to dramatically cut the number of bonuses available, and focus on bonuses for affordable housing, historic preservation and greenways along the river.

[2oh1]

Originally Posted by maccoinnich

The City is looking into doing something like this as part of revisions to the Zoning Code coming out of the new Comprehensive Plan. There are currently a whole range of bonuses for height / FAR, some of which are so esoteric that they have never been used (you can get an FAR bonus for building a theater on Broadway; no one has so far taken them up on this offer). The plans is to dramatically cut the number of bonuses available, and focus on bonuses for affordable housing, historic preservation and greenways along the river.

How seriously are they looking into it? Any thoughts on whether their plan would make a difference or would be more about talk than action? I realize planning tends to be a decade or two in advance before the effects are realized, but it seems to me that this should have happened at least a decade ago.

[maccoinnich]

Pretty seriously. There was a decent amount of discussion about it at the West Quadrant Plan hearings, and it's prominently featured in the Central City-wide action items:

Complete the Central City-wide bonus and transfer study and identify options to prioritize affordable housing development, historic preservation, seismic upgrades and publicly- accessible open space provisions. Present options to City Council along with the results of the bonus study. Amend the zoning code with specific tools to maximize benefit from FAR and height bonus and transfer programs based on council guidance.

Bear in mind that the last time the city updated its Comprehensive Plan in an, er, comprehensive manner was 1988. The current Zoning Code was adopted in 1991. It has seen ongoing revisions since then, but it's largely based on the thinking of the late 1980s and early 1990s. Keeping Portland affordable for middle income people just wasn't on the radar then. The biggest challenge was how to get anybody to build a substantial amount of housing in the Central City.

[58rhodes]

Originally Posted by maccoinnich

Pretty seriously. There was a decent amount of discussion about it at the West Quadrant Plan hearings, and it's prominently featured in the Central City-wide action items:



Bear in mind that the last time the city updated its Comprehensive Plan in an, er, comprehensive manner was 1988. The current Zoning Code was adopted in 1991. It has seen ongoing revisions since then, but it's largely based on the thinking of the late 1980s and early 1990s. Keeping Portland affordable for middle income people just wasn't on the radar then. The biggest challenge was how to get anybody to build a substantial amount of housing in the Central City.

we need an economic plan as much as we need a housing plan--simple

[2oh1]

Originally Posted by 58rhodes

we need an economic plan as much as we need a housing plan--simple

I certainly would agree with that. Threads about the economy rarely come up here even though there's an entire Business & Economy section. Want to get a conversation started there? I have to assume many of us would love to read along. I'm sure I'd learn a lot even if I didn't have much to contribute.

[58rhodes]

Originally Posted by 2oh1

I certainly would agree with that. Threads about the economy rarely come up here even though there's an entire Business & Economy section. Want to get a conversation started there? I have to assume many of us would love to read along. I'm sure I'd learn a lot even if I didn't have much to contribute.

to be honest I wish I had the answers for that. but I would love to have a discussion!

[PDXDENSITY]

Originally Posted by maccoinnich

Pretty seriously. There was a decent amount of discussion about it at the West Quadrant Plan hearings, and it's prominently featured in the Central City-wide action items:



Bear in mind that the last time the city updated its Comprehensive Plan in an, er, comprehensive manner was 1988. The current Zoning Code was adopted in 1991. It has seen ongoing revisions since then, but it's largely based on the thinking of the late 1980s and early 1990s. Keeping Portland affordable for middle income people just wasn't on the radar then. The biggest challenge was how to get anybody to build a substantial amount of housing in the Central City.

It seems like the bill to allow inclusionary zoning will have its hands tied behind its back due to being limited to ownership and not rentals... I've been writing to encourage this change, but it is likely they are just passing this as a false move.

Inclusionary zoning can work for us if we allow it to be used for rentals. And it does not limit new development, as you had said before.

I think we need to continue to focus on making density a reality around transit nodes. We need to lock our UGB in place, and then work on regulations that will allow affordable housing to be subsidized.

Let's not act like there's an elephant in the room; we all know some of our land use regulations have loftier goals than helping the impoverished. Ecosystem health is very important. This means that we need to continue to aim for density as well as affordability.

I think we:

1) need to reset property taxes on land that is lying fallow without PERMANENT development. They might could get an offset for food carts, but it shouldn't be seen as a permanent land use to be protected. This will put constant pressure on speculators to push their hand and provide us with supply, which we are in shortage of (all forms of housing is in shortage).

2)Need inclusionary zoning that applies to rentals. Yes, this is rent control. No, it doesn't need to be a hard cap. It can merely limit increases to inflation. It can also provide buffers for middle and low income. There are means to do this with fees for developers that are not onerous to the pace of adding housing stock.

3)focus on multi-modal transportation. This means discarding the "back to basics" argument that we need to be focusing on roads. We need to be focusing on walkers, bikes, and transit. Auto transit simply should be maintained. This is relevant because a car is a huge factor toward affordability. You can live in sprawl, but youll be tied to a car. Transit is necessary for the Portland vision of affordable housing.

[PDXDENSITY]

"Portland-area rents rising nearly twice as fast as home values"

http://www.oregonlive.com/business/i...rowing_ne.html

We must build faster than we are currently, or we will completely class the middle and lower classes out of our city. Our current boom is not meeting the demand fast enough.

[soleri]

Here's an article that underscores a basic intuition: what's happening in Portland is happening nationally. BTW, the WSJ, at least on its op-ed pages, often argues from types like Reihan Salam that cities need to increase their housing stock by simply forgoing niceties like historic preservation. That would be one way to dampen Portland's appeal - and rising housing costs.

http://www.wsj.com/articles/new-luxu...eze-1432114203

[58rhodes]

Originally Posted by soleri

Here's an article that underscores a basic intuition: what's happening in Portland is happening nationally. BTW, the WSJ, at least on its op-ed pages, often argues from types like Reihan Salam that cities need to increase their housing stock by simply forgoing niceties like historic preservation. That would be one way to dampen Portland's appeal - and rising housing costs.

http://www.wsj.com/articles/new-luxu...eze-1432114203

Housing can still be built affordable. I think everybody is just trying to cash in all at once on the bad years. The sad thing is that I see so much Portland investment money going to Seattle,Bellvue, San Diego and even LA. Its like our local investors have little faith in Portland. Most of you dont realize that one of the nations largest multi family builders is headquartered in Portland. Maybe Portland's own need to step up?

[mhays]

Investors and developers are (a) making massive bets, which can result in losses and ruin even while it more often turns out well, and (b) doing so with the best information they can find. Don't you think they'd "step up" if it made financial sense? Or do you think they should accept more risk than they want to?

As for the "housing can still be built to be affordabe" point: If there's a better mousetrap, great. But so far an entire industry obsessed about wringing cost out of development projects has resulted in what we have today. Are they all ignoring the holy grail?

[58rhodes]

Originally Posted by mhays

Investors and developers are (a) making massive bets, which can result in losses and ruin even while it more often turns out well, and (b) doing so with the best information they can find. Don't you think they'd "step up" if it made financial sense? Or do you think they should accept more risk than they want to?

As for the "housing can still be built to be affordabe" point: If there's a better mousetrap, great. But so far an entire industry obsessed about wringing cost out of development projects has resulted in what we have today. Are they all ignoring the holy grail?

Actually I think its less complicated to build in "other" places than Portland. After looking at vacancy rates Portland seems like not such a bad risk, however
the economy is more up and down here(historically) than other places. As far as building costs go it seems relevant to today's higher wages.Its never been real easy for the poor to to find homes or even first time buyers on lower middle incomes.

[soleri]

Originally Posted by 58rhodes

Housing can still be built affordable. I think everybody is just trying to cash in all at once on the bad years. The sad thing is that I see so much Portland investment money going to Seattle,Bellvue, San Diego and even LA. Its like our local investors have little faith in Portland. Most of you dont realize that one of the nations largest multi family builders is headquartered in Portland. Maybe Portland's own need to step up?

I'm not sure I follow you. What we call affordable takes into account what local economies are capable of sustaining. Portland is definitely not in the same league as Seattle, LA, or San Diego. Yes, there is this vaunted low-vacancy rate but there's a whole lot of product coming online and a great deal more in the pipeline. That vacancy rate is going to change. Multi-family builders don't focus on affordability so much as demand itself. If they overshoot, as is sometimes the case, the result is a more affordable marketplace. Stay tuned.

Upthread, there was a discussion about rental costs in NW Portland. I know first-hand they are stabilizing. Big rental buildings like the Vista St Clair and 735 St Clair used to have waiting lists. Now they're offering incentives to residents who can find a friend or family member who will rent there. That's what happens when 25% of your units are vacant. There is no crisis in Portland when it comes to supply. The crisis, if there is one, lies in the economy itself. Portland is a very attractive place to live but it's not generating enough high-paying jobs to justify the high rents in new housing product. One project to monitor will be Hassalo on 8th. Builders will be looking closely at how well it does. The market cannot lie because real-estate bullshit is always factored in as a business expense.

More OT but dovetailing if you will: should Portland scrap its basic planning model in order to accommodate the hysterics who scream about affordability? I read Oregon Live and I know they're out there. I see the upvotes their anti-Portland screeds get. Time to man up! Portland's greatest success has been in preserving its quality-of-life ideal. Indeed, that's a major component of its economy (how many comparable cities have Portland's large number of boutique hotels?). Maybe Portland doesn't have Boeing, Amazon, or Microsoft but it does have something Seattle is gradually compromising: livability. While I don't want to see young creatives work as baristas into middle age, I really don't want to see Portland lose its soul.