Wednesday, May 17, 2017

Portland School Bond Passes, Adding to Portland Property Tax Bill

The $790 million Portland Public School (PPS) bond passed with 61% of the vote in Tuesday's special election. The bond will cost property owners $1.40 per $1,000 of assessed value for the first 4 years, and then will cost $0.68 per $1,000 of assessed value annually for 30 years. Portland homeowners are still paying for the 2012 PPS bond, which cost $1.10 per $1,000 for the first 8 years, and $0.30 per $1,000 annually for the next 12 years. In PPS bonds alone, Portland property owners will be paying $2.50 per $1,000 of assessed value for the next few years.

Supporters of the new PPS bond point out that Portland school buildings are 77 years old on average, and many have health and safety issues including high lead levels. The bond will provide the funding needed for projects such as improving water quality, removing asbestos and lead-based paint, improving fire alarm and sprinkler systems, and ADA/accessibility improvements. In addition, Benson, Madison, and Lincoln high schools and Kellogg middle school will be rebuilt and renovated. Read more.

Tuesday, May 16, 2017

Multifamily Marketwatch Podcast - May 16, 2017

This week: Portland Mayor says housing trumps need for parking; conflict continues in the Eastmoreland neighborhood and the Portland Development Commission is now Prosper Portland. Our podcast returns next Weds 5/24.



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Multifamily Permit Applications Still Down, PHB Looking to Increase IZ Incentives

Since the City of Portland's Inclusionary Zoning (IZ) requirement went into effect February 1, the number of applications for multifamily permits has stalled. The Portland Tribune estimates that a valuation of $270 million worth of development could be eliminated by the IZ program. The Portland Housing Bureau claims that the slowdown in development is due to a softening of the market, a tariff on Canadian lumber, and increasing interest rates rather than the IZ program itself. The bureau is offering incentives to projects that were vested prior to February 1 in hopes of getting more affordable units built in the city. In January, the city received 20 permit applications valued at $74.7 million. Since February, there have been only 6 permit applications for developments with more than 20 units, the threshold for the IZ requirement. Four of those projects are being developed with assistance from PHB. Read more.

Friday, May 12, 2017

Esco Decommissioning 15 Acre NW Portland Site to Allow for Redevelopment

Just north of NW Vaughn Street and two blocks west of NW 23rd Avenue, the Esco Corporation plans to decommission a 15 acre site that was previously home to its main plant. The northern portion of the Northwest neighborhood of Portland has seen a flurry of development activity, including the new Slabtown redevelopment project and the currently under construction George Besaw Apartments. The neighborhood's walkability and access to transit have attracted new residents and developers alike. City zoning for the Esco site would restrict the possibilities for development, however. The site is zoned for "mixed employment," which would allow for office or industrial use, but not residential development. Read more.

Wednesday, May 10, 2017

Federal Housing Assistance Goes to Homeowners, Even as Renters Become Increasingly Cost-Burdened

PBS reports that of the $200 billion per year the United States government spends on housing assistance, 70% goes to subsidizing homeowners. Since the 2007 recession, however, an increasing percentage of the population has become renters, with many unable to purchase a home. As of 2015, over 11 million households spent more than 50% of their income on rent, up from 8.9 million in 2007. Andrew Aurand, president of research for the National Low Income Housing Coalition, attributes this phenomenon largely to the decline in federal investment in public housing and housing assistance vouchers, which occurred at the same time as demand for rental housing surged. Read more.

Tuesday, May 9, 2017

Multifamily Marketwatch Podcast - May 9, 2017

In this episode: newspapers worldwide reporting on Oregon's battle over rent control; a zoning bill in Salem causes uproar in Multnomah Village and Portland Mayor Ted Wheeler proposes financial support for a Portland startup website to help renters.


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Monday, May 8, 2017

Website to Help Renters Find Home With One Application, One Fee, Plans Launch This Fall

KGW reports on a new app that the City of Portland will spend $125,000 helping to launch this fall. The website will charge a single $35 fee for a background check that will tell applicants which apartment communities they qualify for. Read more.

Thursday, May 4, 2017

U.S. Census: Portland Rental Vacancy Rate Climbs to 3.9% - Nation's 8th Lowest

The U.S. Census Bureau reports that the rental vacancy rate for the Portland-Vancouver- Hillsboro metro area was 3.9 percent for the first quarter of 2017. Census data indicates an increase in Greater Portland's vacancy rate from 3.1% in Q4 -- but down significantly from the 6.6% vacancy rate reported for the first quarter of 2016.

Seattle Vacancies Nation's 3rd Lowest
Census estimated Seattle-Tacoma-Bellevue's vacancy rate at 1.9% vacancy rate, making it the nation's third lowest. Metro areas with lower vacancies than Seattle were Sacramento (1.2%) and Cape Coral-Fort Myers, Flordia (1.8%).

After Seattle (#3) the remaining lowest vacancy rates were:

Allentown-Bethlehem-EAston, PA-NJ (3.0%)
Charlotte-Concord-Gastonia, NC-SC (3.1%)
Los Angeles-Long Beach-Anaheim, CA (3.6% (TIE)
San Diego-Carlsbad, CA (3.6% - TIE)
Salt Lake City, UT (3.8%)
Grand Rapids-Wyoming, MI (3.9% - TIE)
Portland-Vancouver-Hillsboro, OR-WA (3.9% - TIE)

Average National Rental Vacancy Rate
The average national rental vacancy rate for Q1 2017 was 7.0 percent for multifamily dwellings of five or more units -- the same as one year earlier. Vacancy rates remained lowest in the western U.S. where it declined from 5.1 to 4.7%.

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U.S. Homeownership Rate Continues to Fall
U.S. Homeownership rates have fallen from a recent high of 65.1% at the end of 2013 to an estimated 63.6% in Q1 2017. Homeownership rates in the Western U.S. has been on the upswing since reaching a 26-year low during 2016. The current homeownership rate in the west crept up 0.3% over the past year.

Click to Enlarge




Wednesday, May 3, 2017

Do You Need a Helipad? Adding Value in the Age of Amenities Wars

From helipads to breweries to concierge services that can just about read a resident’s mind, amenities have been a hot topic in the apartment industry for years, and the bar just keeps getting higher. For apartment owners and operators who have neither the capital nor even the demand for these over-the-top features, there are plenty of ways to increase their communities’ appeal through amenities, many of which are simple to implement and require little up-front investment. This report seeks to identify top amenities in their communities nationwide and in 11 selected cities, at both the community and unit level, and which ones have the greatest impact on revenue. Read the full story.

Multifamily Marketwatch Podcast - May 2, 2017

In this week's episode: Oregon economist Josh Lehner says he expects homeownership to grow relative to renting in the years ahead; a new expert report says inclusionary zoning has a near zero effect on increasing affordable housing.



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Tuesday, May 2, 2017

HB 2007 Faces Opposition from SW Portland Neighborhood Groups

The Oregon House of Representatives is currently working on HB 2007, which aims to increase housing production by:

  • Requiring affordable housing projects to be approved in 100 days
  • Blocking cities from denying housing development applications due to failing to meet discretionary standards
  • Prohibiting local governments from adopting standards that would discourage needed housing
  • Stopping local governments from reducing density of housing applications if the application meets zoning requirements
  • Requiring local governments to allow detached affordable housing on properties zoned for non-residential places of worship

According to the Portland Tribune, both 1000 Friends of Oregon and the Oregon Home Builders Association support the bill, which is sponsored by 6 legislators from Portland and Southern Oregon. Supporters argue that increasing the supply and type of housing (including "missing middle" housing) would increase overall affordability. 

Neighborhood groups in areas like Multnomah Village in SW Portland strongly oppose the bill, however. These groups are worried that adding multifamily developments would "destroy the character of existing neighborhoods." Read more.

Monday, May 1, 2017

New Market Rate Housing Essential for Overall Affordability

In San Francisco-based marketing blog Art + Marketing, California State Senator Scott Wiener lays out the case for increasing the supply of market rate housing to increase affordability. He argues that while affordable housing projects subsidized by state and federal governments are badly needed, those projects will not provide enough units to house the vast majority of rent-burdened citizens, particularly middle class renters who do not qualify for subsidies. In an argument that will be familiar to Portland developers, Wiener suggests that excessive zoning restrictions and an overly complicated housing approval process have contributed to a shortage of new units as well as skyrocketing rents in California. He argues that the problem is not an overabundance of "luxury" housing, but rather a scarcity of units that has caused housing to be a luxury. Read more.