Tuesday, March 27, 2018

Portland Tribune Breaks Down Why Rent Is High in New Buildings

The Portland Tribune published an analysis of the rent payments of tenants in new apartment buildings, breaking down what that money pays for. According to their analysis, development companies and investors only take home about 10% of the theoretical rent payment, while over 50% goes to land, materials, and construction costs. Read more.

Monday, March 26, 2018

Multifamily Marketwatch Podcast - March 26, 2018 Special Report

The City of Portland apparently plans to move forward with an ordinance requiring seismic upgrades to hundreds of Portland apartment buildings without funding assistance in place. The group Save Portland Buildings argues such a plan will result in the reduction of affordable housing stock through demolition due to the cost to owners. A group spokeswoman discusses how the process has worked -- or not -- thus far. The ordinance comes up for a vote in April.

Check out this episode!

Friday, March 23, 2018

Eudaly Changes her Vote, City Council Okays Riverplace Height Increases

Two weeks after a preliminary vote against increasing height limits to 325 feet in the Riverplace neighborhood to allow the possible development of over 2,600 new apartment units, the Portland City Council has reversed course and approved the height increases. Commissioner Eudaly changed her vote, explaining that while she likes the idea of a step-down in theory, she does not believe it has created a "vibrant waterfront" in Portland. The City Council is requiring NBP Capital, the local development company that requested the height increases, to go through a master planning process that would give the city more input on what is ultimately built. Currently, the plan calls for two skyscrapers designed by Kengo Kuma, which could include up to 500 units of affordable housing through the inclusionary zoning requirement. Read more.

Tuesday, March 20, 2018

Willamette Week: Pearl District Residents Divided Over Growth

Willamette Week reports on the divisiveness that exists within the Pearl District Neighborhood Association over the City Council's rejection of a recent housing project there. Read more.

Monday, March 19, 2018

City Observatory: Educating Portland Council on Housing Economics 101

City Observatory has had quite the slog this past week educating the Portland City Council about Housing Economics 101. Today, the commentary included this quote:

"... to make up for the displacement effect of NOT building [275-unit] Fremont Place, Portland is going to have to come up with something like 130 units of affordable housing. Those are currently running in the range of $300K (and up), so that’s like $40 million worth of affordable housing you would have to build to offset the displacement from not building Fremont Place."  Read more.

Multifamily Marketwatch Podcast - March 19, 2018

This week: The Portland City Council weighs whether to support a 10-year tax abatement to improve the results of its inclusionary housing program; Portland ties in 9th place with Boston and Nashville in a list of the best markets in the country for commercial property investments and -- if somehow you missed it -- there was new reporting on a potential damage from a future major quake off the coast of Oregon.

Check out this episode!

Thursday, March 15, 2018

Commissioner Fish Claims Portland Doesn't Need to Foster Private-Sector Development; Economist Joe Cortright Responds

According to the Willamette Week, Portland Commissioner Nick Fish claimed that new housing development, particularly at the high end of the market, does not benefit renters at the lower end of the market. He referred to the case for increasing housing supply in the city as "trickle down housing," and called it "so preposterous on its face, that it is not worthy of discussion." The Willamette Week reached out to local economist Joe Cortright for a reply. Cortright responded with a lengthy email explaining housing economics and the impact of a supply shortage on rents in the city. According to Cortright, "If you care at all about affordability, you have to build all kinds of housing, including for upper income households. If you don't, the ones who will pay the price will be the ones that Commissioner Fish says he cares about." Read more.

Wednesday, March 14, 2018

Recent City Council Decisions Could Have Chilling Effect on Housing Development

The Willamette Week reports that recent city council decisions regarding developments in the Pearl District and RiverPlace neighborhoods could discourage developers hoping to build in the city. Portland is already facing a shortage of development applications due to the inclusionary zoning requirement, and has been facing a housing shortage since 2015 when a Housing State of Emergency was first declared. Rents had started to flatten in the city after a large number of new units were completed in 2016 and 2017, but as new residents continue to move to the metro area new developments will be needed to meet demand. Michael Wilkerson, a senior economist for ECONorthwest, told the Willamette week that the City Council is sending a message that "if you're expecting to go quickly through the design process, it can be slowed down and derailed." Read more.

Tuesday, March 13, 2018

Multifamily Marketwatch Podcast - March 12, 2018

This week: the City of Portland expands rental relocation assistance fees to owners of even one rental unit, and makes the fees permanent; Washington State's legislature passes a law prohibiting landlords from discriminating against tenants with section 8 vouchers; the Portland City Council rejects 300 apartments in the Pearl District and rejected construction of 2,617 additional housing at RiverPlace that would have added 500 units of affordable housing.

Check out this episode!

Monday, March 12, 2018

Tribune: Portland City Council has Rejected 3,000 New Homes, Including 500 Below Market Rate Units

The Portland Tribune reports that despite its multi-year declaration of a "housing emergency" the Portland City council has recently rejected housing projects totaling 3,000 units, including 500 that were below market. Read more

Commentary: "Portland Doesn't Really Want to Make Housing Affordable"

Joe Cortright opines in today's City Commentary that the City Council's actions last week speak louder than its words, and that by blocking new housing, all five councilors are helping drive rents upward. Read more.

Friday, March 9, 2018

First Annual Urbanism Next Conference Comes to Portland

The University of Oregon's Urbanism Next Initiative held its first annual conference in Portland March 5th through 7th. The conference convened experts and professionals from the public and private sectors as well as academia to focus on the potential primary and secondary effects of new and emerging technology on cities and the people who live there. The three-day event featured speakers from the Portland area and beyond, who focused on what public and private sector leaders in cities can do to prioritize equity and accessibility while embracing new technologies, and how these advances will impact where and how people want to live.

The two disruptive advancements at the forefront of most conversations at the conference were automated vehicles (AVs) and the rise of e-commerce and drone delivery. Robin Chase, a co-founder of ZipCar, painted a picture of two possible outcomes of AV adoption: a utopian city with increased ride sharing where car ownership is not a requirement and multi-modal travel is quick and easy; and a dystopian city where streets are always congested and mobility is only possible for higher-income residents in the city core. Both she and others emphasized that planners, developers, and politicians should work together to come up with a vision of what they want their city to look like, and put regulations and incentives in place that foster the desired outcome. Portland Bureau of Transportation director Leah Treat emphasized that while Portland would like to see AVs introduced by the end of the year, the city has also put forward goal-based conditions to help ensure that vehicles would be shared, would meet environmental goals, and would be available and accessible to all residents in the city.

Developers and architects at the conference discussed how they are working to make sure that space allocated for parking and retail is flexible. If most city residents transition away from privately held cars within the next ten or fifteen years, parking lots in newer developments could be wasted space. In a panel titled "Reshaping Cities in a Post-Parking World," local developers discussed the ways they are trying to accommodate the expectations of lenders and investors while "future-proofing" their developments by building parking that could later be converted to storage or other uses. In addition, both AVs and the rise of e-commerce have made the concept of the curb a point of contention, which could impact how streets are designed and developments are built. AVs will need pick-up and drop-off points near where people want to go, while trucks or drones will be delivering packages and food to people's doors. City planners, residents, and developers will likely face questions in the near future of who owns curb space.

The University of Oregon plans to make this an annual conference, after drawing 500 attendees to the city in its first year. There was agreement among panelists that in order to build a framework to move forward, crucial voices including labor unions, people with disabilities, and underrepresented minority groups must be brought into the conversation.

Read more: Urbanism Next Research Briefs

Thursday, March 8, 2018

Housing Emergency? City Council Denies Construction of 275 Apartments in the Pearl

Willamette Week: Yesterday the Portland City Council denied construction of 275 units because the neighbors complained it would block their view of the Fremont Bridge. Read more.

Portland City Council Approves Permanent Relocation Fee Ordinance

The Portland City Council approved a permanent relocation fee ordinance on Wednesday, which eliminates the exemption for landlords who rent a single housing unit. The new law also establishes a rental registration system, and requires landlords to report when they issue a no-cause eviction or raise rent by more than 10%. The law goes into effect immediately. Read more.

Wednesday, March 7, 2018

HFO-TV: An Update on the City of Portland's Push for Seismic Upgrades of Unreinforced Masonry Buildings [video]

Angie Even of Save Portland Buildings offers an update on how the City of Portland plans to force owners of unreinforced masonry buildings to complete seismic retrofits.

1,300 New Apartments Set to Replace Regal Lloyd Center Theatres

In case you missed it -- the first phase of the new apartment community will be built on the current parking lot of the 10-screen Regal Cinemas at Lloyd Center. Regal Cinemas will move into a new 14-screen multiplex on the site of the former Sears store and then the theatre will be demolished to make way for additional apartments. Read more.

Monday, March 5, 2018

Multifamily Marketwatch Podcast - March 5, 2018

Last week: The Portland City Council heard hours of testimony, mostly from renters, on a proposal to make Portland's renter relocation fee permanent while expanding it to all landlords of one unit or more. The City will also consider whether to begin a landlord registration system as discussion is expected to continue this week; Metro plans a $1.7 billion affordable housing bond measure for November's ballot.

Check out this episode!

Friday, March 2, 2018

Sold! Taylor Place - 30 Units in Astoria

Taylor Place is a 30-unit apartment complex in downtown Astoria. The property had been extensively upgraded in recent years. HFO approached a Portland-based client with the opportunity and received an offer well above any market comparable. Taylor Place closed at $2,200,000, significantly higher than market average. The buyers plan to continue making strategic improvements to the property to capitalize on Astoria’s popularity and future growth.

Thursday, March 1, 2018

U.S. Census: Portland Ends 2017 With Nation's 5th Lowest Rental Vacancy Rate

The U.S. Census Bureau reported that the year-end rental vacancy rate for the Portland-Vancouver- Hillsboro metro area was 2.6% percent -- a drop of 3.6% over the prior quarter and a 0.5% decrease from one year earlier. 

The next definitive report on the area's vacancy rate -- by Multifamily NW -- is due out in April.

Seattle's Vacancy Rate - 3.4%
Census estimated Seattle-Tacoma-Bellevue's vacancy rate remained flat year-over-year at 3.4% -- despite a surge in multifamily construction projects that were quickly absorbed.

Metros with the lowest rental vacancies for Q4 2017 were:

  1. Akron, OH (1.0%)
  2. San Jose-Sunnyvale-Santa Clara, CA (1.4%)
  3. Fresno, CA (1.9%)
  4. Dayton, OH (2.0%)
  5. Portland-Vancouver-Hillsboro, OR-WA (2.6%)
  6. San Diego-Carlsbad, CA (2.7%)
  7. Seattle-Tacoma-Bellevue, WA (3.4%)
  8. Los Angeles-Long Beach-Anaheim, CA (3.7%)
  9. Riverside-San Bernardino-Ontario, CA (3.8%)
  10. New York-Newark-Jersey City, NY-NJ-PA (4.0%)

Average National Rental Vacancy Rate
The average national rental vacancy rate for Q2 2017 was 6.9 percent for multifamily dwellings of five or more units -- unchanged from one year earlier, despite ongoing delivery of multifamily units throughout the national market.

Year-over-year vacancy rates in the western U.S. increased only slightly, from 4.2% to 4.5%.

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U.S. Homeownership Rate Increases
After falling to a 26-year low in 2016, homeownership rates remained at basically the same rate from one year earlier at 64.2%. Homeownership ratesas the fourth uarter of 2016 have been increasing. The current homeownership rate in the West increased over the past 12 months from 59% to 60%.

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Portland City Council Debates Renter Protections

The Portland City Council heard testimony on Wednesday afternoon regarding a proposed renter protection law that would, among other things, make the city's relocation fee ordinance permanent. Commissioner Eudaly advocated for expanding the rule to include landlords who only own a single rental unit, and the Council also plans to track landlords who request exemptions. Under the new proposed law, landlords would be required to notify the city when issuing a no-cause eviction or raising the rent above 10%. The ordinance includes 11 exemptions for the new rule, including owner-occupied duplexes, affordable housing units, and landlords who are serving in the military. Renter advocates urged the Council to bar landlords from increasing fees such as pet rent or parking and storage fees. Mayor Wheeler did not seem sold on that idea, but Commissioner Eudaly appeared to be in favor. Discussions are set to continue next week. Read more.