Monday, October 31, 2016

Metro: 100 New Residents a Day - Where Housing is Happening in Portland & Why

The population of our area is increasing by 100 new residents each day. Where are they living? Metro staffers Crag Beebe and Nick Christensen explore expansions in the Central Eastside, North Bethany, Villebois, Happy Valley, and South Hillsboro in this in-depth, engaging look at today's housing growth.

Prepare for Inspection: Portland Housing Bureau Proposes Landlord Registry; May Seek Moving Costs for "No Cause" Evictions

Willamette week reports on two issues of interest to multifamily owners in a story this week:
  1. The Portland Housing Bureau has a budget for next year that includes funding for setting up a landlord registry, in anticipation of mandatory inspections;
  2. Oregon state legislative counsel has issued a legal opinion stating that landlords could be billed for tenants' moving costs for tenants evicted without cause on month-to-month leases. Read more.

Zillow: Portland's Popularity Driving Up Rents

The Portland Tribune reports that the online rental and research service Zillow has data indicating something we already knew: Portland's rents are growing because we're popular. Read more.

Friday, October 28, 2016

Portland Moves Up to #3 Spot on PwC US and Urban Land Institute Emerging Trends in Real Estate Report

The Portland Business Journal reports that after first making the top 10 list last year, Portland has risen to third place, after Austin (#1) and Dallas/Fort Worth (#2). According to the report, "niche neighborhoods" and "economic diversity" contributed to Portland's rise.  This is the 38th year PwC US and ULI have produced the Emerging Trends report, and the ranking is based on a survey of 2,000 investors, fund managers, developers, brokers, and lenders. Read more.

Tuesday, October 25, 2016

World's Largest Travel Guide Book Publisher Names Portland a Top 10 Best City to Visit in 2017

Lonely Planet has named Portland as the #10 city in their Best in Travel 2017 guidebook.  Portland is one of only two U.S. cities on the list - Los Angeles comes in at #3. The guide cites remote working, backpacking, sustainable travel, and micro-distilleries as top trends in travel, which may contribute to Portland's high ranking. Topping the list of cities to visit is Bordeaux, France. Read more.

Residential Infill Project to Go Before City Council in November

Portland's Residential Infill Project will go before City Council November 9th and 16th. The project aims to address concerns about the size of new houses as well as the rising cost of housing.  The goal is to limit the construction of "McMansions" while expanding the ability to build duplexes and triplexes. The plan would also rezone narrow lots to R2.5 in some areas. An article about the proposal appeared on the Portland-based Open: Housing blog, here, and a summary report by the city can be found here.

Monday, October 24, 2016

Portland Tribune: "How Far Did The City's Housing Efforts Go" Since Declaring Emergency?

The Portland Tribune summarizes accomplishments by the City of Portland since declaring a housing state of emergency a year ago. New city-backed affordable housing units opened: 335. Temporary shelters opened: two (since closed). Multnomah county offset the temporary housing shelters by opening two permanent shelters with 250 beds. The City says that with the $258.4 million affordable housing measure on the Nov. 8 ballot, they have 1,995 units in development. Read more.

68-Unit Plaza Townhomes in Humboldt Neighborhood Will be Rehabilitated, Remain Affordable

Home Forward has sold the Plaza Townhomes to Community Preservation Partners (CPP), which is rehabilitating 68 Units of affordable housing at a cost of $50,000 per unit. CPP says a federal tax credit will allow it to save the 68 units as affordable housing for another 30 years. Read more in the Portland Tribune.

Friday, October 21, 2016

New Mixed-Use Housing Project in Lents Town Center Breaking Ground Sunday

The Portland Business Journal reports that a 54-unit mixed-use market-rate development will be having an official groundbreaking 12 to 1 pm on Sunday, October 23rd. The project, called 9101 Foster, is one of four highly anticipated new developments intended to revitalize the Lents neighborhood. The Portland Development Commission took ownership of the property from Williams & Dame Development in June 2016. Construction is expected to be completed by Fall 2017. Read More.

Thursday, October 20, 2016

MultifamilyNW Apartment Report: Portland Area Rents Climb; Vacancies Increase

Yesterday, Multifamily NW released its Fall 2016 Apartment Report.

The survey includes data from nearly 73,000 units in Portland/Vancouver metro area's 20 submarkets, along with units in the Salem, Eugene/Springfield and Bend/Redmond areas.

The data reflect an increase in the overall market vacancy rate and an average year-over-year rent increase of 10.5%.

A summary of year-over-year vacancy rates:

West Coast Markets Are Q3 Rent Growth Leaders: Portland Ranks 4th in U.S.

West Coast metros continue to dominate the U.S. rent growth leaderboard in 3rd quarter 2016. Sacramento led the nation for the second straight quarter, with an 11.4% rent hike in the past year. The top 10 also had some surprises, including a very full Riverside/San Bernardino market, construction heavy Dallas and Florida’s new rent growth leader, Tampa/St. Petersburg.

Portland's Economic Outlook Changed as Economy Reaches Full Employment

by Josh Lehner, Economist, State of Oregon Office of Economic Analysis

The Portland metropolitan area’s job growth and wage gains continue to outpace the typical metro across the nation. Such gains are also on par with growth seen during the height of the housing boom last decade. Importantly, the expansion has now reached the lowest income households and broader measures of well-being like the poverty rate. However, the outlook for an economy approaching full employment differs in important respects from one that is digging out from a recession. The tighter labor market brings good news for workers in the form of rising wages, different challenges for businesses looking to expand and shifts the calculus for households looking to buy or rent.

First the good news. Economic growth in recent years is finally impacting broader measures of economic well-being. Median household income in the Portland region increased six percent in 2015, the largest gain in a decade. However, after taking inflation into account, local incomes remain about one percent below their pre-Great Recession levels. That said, median household income in the typical large metro nationwide remains six percent below pre-Great Recession levels.

Even as the lowest income households have suffered the largest declines in the past decade, the recovery is finally starting to reach them. Nationally and across Oregon, such households saw the largest income gains last year, at least in percentage terms. This welcome news resulted in a correspondingly large decline in the poverty rate. These improvements are seen in the Portland region among households in deep poverty, those with incomes less than half the official poverty level. Furthermore, poverty in Portland has improved proportionately for both whites and people of color alike.

The driving force behind these improvements is the strong labor market. Employment in the Portland region is not only considerably higher than back in 2008, but it has fully caught back up with population growth over the same period. The labor market is getting tight. As the pool of available workers shrinks, businesses must compete more on price to attract and retain the best employees. This is great news for workers as wages rise. Given that wages make up the majority of income for households at the bottom, such wage gains are pulling workers and families out of poverty today. Higher-income households have a wider variety of income sources besides wages, such as capital gains, dividends and the like.

The tight labor market does mean businesses looking to expand must cast a wider net to find workers. This includes potential hires that may not have been looking in the first place. Examples include stay-at-home parents, early retirees or discouraged workers who have previously given up looking. With the right opportunity, such workers move directly into employment, bypassing the job search phase entirely. Additionally, businesses can no longer be as picky in hiring the perfect candidate. Firms must take chances on workers without the ideal experience or a potentially incomplete skill set. On-the-job training becomes considerably more important.

The outlook for an economy at full employment differs in that net growth rates are expected to slow, but for a good reason. Statewide, job gains in recent years are more than twice as much needed to keep pace with the growing population. This is welcome news during a recovery and the large gains eat up the economic slack. However, such gains are not sustainable over the long-term; they are peak growth rates. As the economy approaches and reaches full employment, job growth is expected to slow to a sustainable rate, more in line with the working-age population.

Finally, the combination of a strong regional economy and the Millennials beginning to age into their mid- and late-20s, does mean the Portland metro is at peak renter. Homeownership across the region increased in 2015 with the largest gains among the 20- and 30-something households. While expectations are not for a return to mid-2000s ownership rates, the large shift into rentals over the past decade is likely finished. That said, in a growing metropolitan area like Portland, the overall number of renters and owners will both increase. The challenge is ensuring the housing supply keeps pace with demand. This has not happened in recent years and affordability has eroded.

Josh Lehner is a Senior Economist with the State of Oregon’s Office of Economic Analysis. He develops the quarterly Oregon Economic forecast, including outlooks for employment, income and housing. Additional responsibilities include the Oregon Index of Leading Indicators, tracking international developments in Oregon’s export markets and forecasting revenues for the Oregon Lottery, Oregon Judicial Department and state tobacco taxes. Mr. Lehner earned a B.A. in Economics from the University of Colorado and an M.S. in Economics from Portland State University.

Read more updates on the Office of Economic Analysis blog.

Tuesday, October 18, 2016

The Unintended Consequences of Law on Affordability

Builder Magazine cites regulations and fees as the reason California has priced itself out of the first-time homebuyer market. Read more.

Monday, October 17, 2016

Portland Cannot End No-Cause Evictions without Change to State Law, Lawyers Advise

The Willamette Week reports that the State of Oregon Legislative Counsel has issued two opinions on whether cities can pass laws banning no-cause evictions unilaterally.  It concludes that ORS 90.427 expressly permits no-cause evictions, and would have to be overturned prior to a ban. Ted Wheeler has stated previously that he believes the City of Portland has the legal authority to enforce such a ban. Portland Tenants United suggests that laws requiring landlords to pay relocation fees could still be legally enacted by the City of Portland. Read more.

Friday, October 14, 2016

Federal Transit Administration Awards $895,000 Grant to Southwest Corridor

The Portland Tribune reports that the FTA has awarded an $895,000 grant to Metro for the Southwest Corridor project, which includes the Barbur Concept Plan and the Tigard Triangle Plan. A measure on the November 8th ballot will determine the fate of the planned MAX line to connect Tigard, Tualatin, and Portland, which is the central piece of the Southwest Corridor project. The grant is aimed at identifying "housing, workforce, and economic development needs" of residents. Read more.

Tuesday, October 11, 2016

FHA Proposes New Standards for Financing of Mixed-Use Condo Development

The Federal Housing Administration is looking to update rules on mixed-use developments in an effort to evaluate projects based on what local markets will support. Currently, FHA loans are only available for projects that are less than 50% retail; under the new rules the ceiling could be anywhere from 20% to 60% depending on market conditions. The new rules do nothing to change the 35% ceiling for mixed-use rental properties, however, and urban planners are concerned that low- and mid-rise mixed use apartment buildings will continue to lose out. Read more.

Monday, October 10, 2016

Portland Monthly Magazine: "Portland Is Growing Like Never Before. What Should We Do Next?"

"Right now, almost 60 buildings at least 100 feet tall are in the pipeline for Portland’s central city—including at least 15 destined to rise more than 200 feet. And those are the projects we know about. Among Portland’s architects and builders, there’s talk of more—many more. Then there are the 14,000-plus apartments that have sprouted since 2012, across every neighborhood. And the 1,700 new hotel rooms expected by the end of 2017. And the 11 new buildings the Goodman family aspires to grow on its downtown parking lots, five proposed at more than 400 feet tall. (For comparison, Big Pink stands just over 530 feet.)

"Some call it a boom; others, another bubble soon to pop. But imagine, for a moment, that all the cranes swinging above the streets, all the new, bigger buildings rising where little old ones once stood, the moving vans arriving from across the nation—imagine that this is Portland’s new normal." Read more in this month's Portland Monthly magazine.

Friday, October 7, 2016

Tina Kotek Opinion in Oregonian: "Rent Stabilization Will Be On the Docket"

The Oregonian published an opinion piece today by Oregon House Speaker Tina Kotek, in which she calls for an end to "no cause" evictions and specifically states that "rent stabilization will be on the docket" in this coming legislative session, which begins February 1, 2017. Along with this she also calls for more units to be built, despite the fact that rent control has been proven to greatly slow, and in some cases stop, investment in new housing. "Some developers and property owners are making excessive profit and benefiting from this housing crisis," she wrote. Read more.

Two New Studies Say Housing Shortages Restrict Economic Growth

An article in the LA Times looks at two new reports from UC Riverside and UCLA indicating that starting in 2017, California's economic growth will be restricted by its lack of housing. Chris Thornberg, an author of the UC Riverside study, explains, "If we aren't going to build new housing to meet demand, we are going to limit population growth and limit economic growth." This is particularly the case in states with low unemployment rates, as expanding businesses require new workers who are likely to be moving from other states looking for jobs. Read more.

Thursday, October 6, 2016

Downzoning of Dense NW Portland Neighborhood Could Have Adverse Effect on Affordable Housing Projects

The Willamette Week reports that despite an ongoing Housing State of Emergency, starting October 6 the City Council will consider a zoning change to a 20 square-block area of the Alphabet District. The new zoning restrictions would decrease height limits by 10 feet, and according to Northwest Housing Alternatives would render some affordable housing projects currently in the works financially unfeasible.  Metro has publicly expressed opposition to the downzoning plan, while some city planners maintain it is necessary to preserve the character of historic neighborhoods. Read more.

Wednesday, October 5, 2016

32 Organizations Receive a Total of $92 Million for Affordable Housing from US Treasury

Multi-Housing News reports that the US Treasury's Community Development Fund has granted $91.5 million to 32 organizations in hopes of triggering $900 million in investment for low-income communities. The 23 community development institutions and 9 non profit groups that received the funding are expected to develop affordable housing and community facilities in 37 states and Washington DC. The funding is part of the Capital Magnet Fund launched in 2010. Read more.

Tuesday, October 4, 2016

The Case for Eliminating Parking Requirements to Lower Housing Costs

The Portland Shoupistas blog wrote about the costs of parking requirements for new developments, and why eliminating these requirements would enable developers to build more affordable housing. The blog encourages residents and officials to make sure the goal of reducing parking requirements is included in the 2035 Comprehensive Plan, which already aims to reduce parking in mixed-use zones that are served by public transit. There will  be a City Council hearing on October 6th where interested residents can express opinions on the Comprehensive Plan. Read More.

Monday, October 3, 2016

The Portland Mercury Reports Increased Concern in Portland over Lead Dust from Demolitions

According to The Portland Mercury, there is a loophole in Oregon law that requires safety precautions to protect against the spread of lead dust during home renovations, but not demolitions.  97% of the 973 demolition permits issued or applied for in Portland since 2014 are for houses built before 1978, the year lead paint was banned by the federal government. As of October 31, a new law will go into effect requiring buildings built prior to 1916 be deconstructed rather than demolished, but some neighborhoods are advocating for stronger regulations. Read more.