Saturday, June 30, 2018

Sold! 19 New Units in SE Portland, Oregon

Lambert Lofts is a 2017 construction project in the iconic Sellwood neighborhood. Its location is central to the popular destination retail district for which Sellwood is known. The mix of studios and one-bedroom floor plans is attractive to the urban generation.

HFO represented a buyer who was actively looking for new construction projects. We were able to identify and negotiate the sale of this transaction, working through some management challenges with the company involved in lease-up. HFO helped solidify and verify an operating budget without historical operating numbers. For more details on this sold listing call an HFO broker at 503-241-5541.

Thursday, June 28, 2018

Sold! 16 Units in Newberg, Oregon

Mt. View Apartment consists of eight one-story duplexes. Each unit has an attached, direct-entry garage and private, fenced backyards. The asset is less than one mile from Newberg’s downtown and George Fox University.

HFO was hired to market this property for sale on a tight timeframe. HFO’s strong marketing efforts and extensive knowledge of the submarket and active buyers enabled HFO to complete the sale in under 30 days—a win/win for all parties. For more information on this transaction call an HFO broker at (503) 241-5541.

Report: Development Pipeline in Seattle & Portland Risks Short Term Oversupply; Long-Term Balance?

Yardi Matrix released a Supply and Demand Forecast by Metro area that indicates the following:

Note: The report’s methodology assumes the percentage of apartment renters will remain constant. This appears unlikely for the Pacific Northwest given the current and expected level of in-migration.

Metro
Apartment Supply 2-years
Apartment Demand 2 years
2-year Supply Growth %
2-year Demand Growth %
Seattle
23,197
9,695
10.0%
4.4%
Portland
8,438
4,665
5.8%
3.4%





Metro
Apartment Supply 5 years
Apartment Demand 5 years
5-year Supply Growth
5-year Demand Growth
Seattle
33,041
22,024
14.3%
10.0%
Portland
10,032
10,219
6.8%
7.3%

Tuesday, June 26, 2018

Affordable Oregon: Portland Is the Most Expensive Place to Build in the Metro Area

The Daily Journal of Commerce reports that a new study by nonprofit Affordable Oregon determined that Portland is the most expensive city to build in the metro area. The study looked at 19 jurisdictions and evaluated costs using six categories, including systems development charges, permitting fees, planning fees, time to market, total combined costs, and a building industry survey. According to the study, permits, fees, SDCs, and delays add $85,300 to the cost of a home in Portland, regardless of the home's size or value. Throughout the metro area, the median is $65,000. West Linn and Beaverton are the second and third most expensive jurisdictions. Read more.

Monday, June 25, 2018

Multifamily Marketwatch Podcast - June 25, 2018

This week: Portland's mayor proposes a plan to help renters expunge criminal convictions; climate change is having the least impact on Oregon and Washington; Portland and Multnomah county government are working together on a plan to allow homeless families to park overnight on church property and the Portland City Council imposed a 2% fee on short-term rentals to support Travel Portland and a $4 per night fee to support low-income housing.


Check out this episode!

Wednesday, June 20, 2018

Harvard JCHS Releases State of Housing Report for 2018

Harvard University's Joint Center for Housing Studies released its State of the Nation's Housing report for 2018. The report digs into a number of trends impacting the housing industry. Among the important takeaways:

  • Home-ownership rates for young adults and black households are near 30 year lows
  • Vacancy rates are lowest for Class C apartments, and highest for Class A apartments
  • Nearly 50% of renters nationwide are cost burdened
  • Multifamily starts were down 9.7% in 2016-17, while completions were up 11.3%
  • Median home prices in Seattle, Portland metro areas are approximately 5-7.9 times greater than incomes
  • Oregon and Washington are experiencing high levels of domestic in-migration of Millennials
  • The national rental housing stock is shifting to higher-cost units
  • Apartment properties are appreciating faster than single family homes

Portland City Council Approves New Short-Term Rental Fees

The Portland City Council voted unanimously today in favor of a 2% fee on total revenues for short-term rentals in the city. The 2% fee not only includes AirBnB and HomeAway vacation rentals, but also hotels with fewer than 50 rooms. In addition, a majority of the City Council approved a $4 per night charge for short term rentals. Although Commissioners Eudaly and Fritz argued that the flat fee was too regressive, Mayor Wheeler believes the fee is more legally defensible than an alternative based on a percentage of revenue. Funds raised by the 2% fee will be directed to Travel Portland, while those generated by the $4 nightly fee will go Portland's Housing Investment Fund. Read more.

Monday, June 18, 2018

Multifamily Marketwatch Podcast - June 18, 2018

This week: The Portland City Council puts off for another year a vote on seismic retrofit requirements; The National Multifamily Housing Council reports that over 30 percent of the cost of multifamily development is due to governmental regulation; and the Oregonian editorial board questions whether Metro's plan to place a $652 million affordable housing bond on the November ballot is enough to make a difference in the housing crisis.



Check out this episode!

Thursday, June 14, 2018

Study: More than 30 Percent of Multifamily Development Cost Attributable to Regulation

WASHINGTON, D.C.—Regulation imposed by all levels of government accounts for an average of 32.1 percent of multifamily development costs, according to new research released today by the National Association of Home Builders (NAHB) and the National Multifamily Housing Council (NMHC). In fact, in a quarter of cases, that number can reach as high as 42.6 percent.

Apartment and condo development can be subject to a significant array of regulatory costs, including a broad range of fees, standards and other requirements imposed at different stages of the development and construction process. However, until now there had been no previous research done to analyze the extent of this regulation. This joint research effort surveyed NAHB and NMHC members to quantify how much regulation exists and how much it is adding to the cost of developing new multifamily properties.

Breaking down the government regulation costs showed that an average of 7 percent of regulatory costs come from building code changes over the past 10 years, 5.9 percent is attributable to development requirements (such as streets, sidewalks, parking, landscaping, and architectural design) that go beyond what the developer would ordinarily provide, and 4.2 percent of the costs come from non-refundable fees charged when site work begins.

“The home building industry is one of the most highly regulated industries, and the multifamily sector is particularly subject to these obligations,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Housing affordability is a huge issue throughout the county, and this new research only further illustrates how the layers of excessive regulation translate into higher rents and reduced affordability for consumers.”

“The current regulatory framework has limited the amount of housing that can be built and increased the cost of what is produced,” said NMHC President Doug Bibby. “At a time when states and localities are struggling to address housing affordability challenges, public and private stakeholders should work together to streamline regulations and take the steps necessary to expand housing in communities across the country.”

Although local governments generally have authority for approving the development and adopting building codes, state and federal governments are increasingly becoming involved in the process and layering on additional levels of fees and regulations.

Developers can almost certainly expect average costs to be higher now or in the near future due to the effect of recent regulations that went in place at the end of 2017, such as the new Silica Rule. Further, the survey does not account for other price-influencing factors such as the effects of recent tariffs on building materials, or the extent to which local jurisdictions empower citizens to oppose multifamily development in their communities.

Read the full document.



Portland City Council Punts Mandate for Seismic Retrofits -- Another Year of Study

The Portland City Council voted yesterday to advance the retrofit requirement with the condition of a more inclusive workgroup to conduct further study. It means that the mandate may take effect depending on the vote a year from now.

In the meantime, city staff were directed to study and return in September with a recommendation on adopting an ordinance requiring URM buildings to post placards that they may be unsafe during a seismic event. The council discussed the following language:  "This is an unreinforced masonry building. Unreinforced masonry buildings may be unsafe in the event of an earthquake." If that language is adopted in September the signs would be required to be posted by March, 2019.

The city voted to separate churches from other buildings and to set up a separate committee to study church and other nonprofit needs.

The requirement of securing walls to floors was tabled pending further study by the committee, which will be required to report back to the City Council in six months, and the ordinance will be voted on again in one year. The committee was also directed to work to find ways to finance any required retrofits.

Public buildings and schools remained a top priority on the council's agenda for retrofit requirements.

Watch the council meeting:
June 13 - AM Session - Timestamp 3:03

Compelling testimony from local Pastors. 

While not entirely satisfied with the outcome, the group Save Portland Buildings was pleased owners were able to "impact and shine a light on the issues by exposing conflicts of interest and lack of representation."

Read the Oregonian story.



Wednesday, June 13, 2018

The Potential For Earthquake Damage in Portland: Another Opinion

We often hear from one expert (Chris Goldfinger) when it comes to how likely it is Portland will experience damage from an earthquake.

Let's take a step back for a moment to hear from Professional Engineer Andrew J McCann, who had this to say on the matter recently:

***
Education is the key to enlightenment.

Earthquakes occur on a daily basis - most very small, some very large.

Will a quake occur beneath Portland - only minor ones if any at all. Which means we will not bare the full force of a quake in our area of the world. When the news writes a quake of 9.5 will hit Portland - that gets everyone's attention, even in New York City! However, that is the maximum anticipated quack at the epicenter - that point over the quake it's self! Not what we will feel in Portland.

Will Major quakes occur around Portland - that's a broad question - the closest possible quake would come from the Cascadia Subduction zone 350 miles away - and/or Mount Hood located approximately 78 miles from the center of Portland - estimated maximum at a 9.5 at the Epicenter at the Casdadia seduction line. So we would probably see much less damage than occured in Santiago Chile; and nothing like the damage seen in the coastal towns of Chille located just 30 miles from the quakes epicenter.

Straight of Juan de Fuca Tectonic Plates - AKA Juan De Fuca Plate is approximately 1000 miles from the center of down town Portland. and extends from entry to the straight of Juan de Fuca, out into the pacific about 1000 miles, then back towards Eureka, California.

While the massive quakes off the coast of Japan and Chille damaged local towns and cities, the real damage came from the Tidal Waves/Tsunami's that occurred as a result of the quake. Note: Japanese quake was approximately 60 miles offshore while the Chilaen quake was only 20 miles off shore - and we are 78 miles from Mount Hood and 800 miles from the Straight of Juan De Fuca fault!

Tsunami's are deadly for those living on the coast. However, studies by Oregon State University have noted that the tide would rise to a point 6 feet above flood stage in Astoria and by Longview - no change would be noted. Besides, I don't think a 100 foot high wave would make it over the coast range! Even the Tsunami free zones are marked in blue located on the west side of highway 101 thru Newport, Oregon. So lets not think/worry any more about a tidal wave taking out the bridges and washing away downtown Portland.

Most quake's intensity is strongest within the first 20 to 40 miles of the epicenter - where most of the cities have major damage. So being 78 miles from mount hood 300 miles from the Cascadia Subduction zone gives us a lot of breathing room. Also, death tolls and injuries are minimal due to the rocking and rolling of the quake; while most people and homes are damaged/lost from the following tidal wave.

While I concur with our leaders that we must do something, the probability of a quake from the Mount Hood area is fairly minimal; and the Cascadia Zone - 10% probability of occurring in the next 50 years. We should not make a Knee Jerk reaction to something that requires thought and planning.

We should think about what we can do over the next 50 years to limit impact of falling structures, saving lives and take into account the cost to the general public.

My family and I own 5 of these URMB structures. However, as a Professional Engineer I must position myself to perform the duties I'm charged with: To Safe Guard the Public followed by Property and well being of all that there is.

We must prioritize what is most important, allocating resources in a logical manor and using methodical methods to prepare for what ever may come - whether it be an eruption, tidal wave, plane wreck or earthquake.

Last but not least - listen and watch the animals, as for centuries, people have noted wild life moving in droves to safety, hours before a major earthquake/tsunami occurs - would it not be more prudent/cost effective to place locators on all animals around Mount Hood and along the Pacific Coast; then notify people in those danger zones of an impending Quake or Tsunami???


Federal Reserve Raises Benchmark Interest Rate for Second Time This Year

The Federal Reserve raised its short-term interest rate a quarter point to 2% today. This is the second time it has raised the rate this year, after raising it three times in 2017. The Fed expects that it will increase rates a total of four times this year. Read more.

Tuesday, June 12, 2018

Wheeler Defends High Price of New Affordable Housing Bond Purchase

Portland Mayor Ted Wheeler announced last week that the city intends to purchase a nearly completed development at E 105th & Burnside using money from the affordable housing bond passed in 2016. The $14.3 million price tag works out to approximately $280,000 per door for the 51 unit building. Mayor Wheeler argues that the city is willing to pay more to purchase and develop affordable housing built with high-quality materials, but developers including Rob Justus of Home First Development are pushing back on that claim. According to Justus, the city assumes that their buildings will never require work, but all buildings require maintenance every 20 years or so. Since 2017, only three multifamily properties in the eastern portion of Multnomah County sold for over $200,000 per door. Two of those properties were originally built as condos, and all three included larger townhome units. The highest price per door was just under $236,000 for a converted condo building completed in 2000 and sold in 2018. Read more.

Hearing & Vote on Portland Seismic Retrofit Requirements is Tomorrow, June 13 at 10 am

The City of Portland will hold its final hearing and vote on requirements for seismic retrofits tomorrow at 10 am at City Hall.

Read more at the City of Portland website.

Read more at Save Portland Buildings website. 

Portland's Better Housing By Design Public Hearing is Today @ 5 pm

The Planning and Sustainability Commission will hear testimony on the Better Housing by Design project in person at the hearing and will accept written testimony up to June 25 at 5 p.m.

The public hearing will be held tonight at the PCC SE Campus at SE 82nd & Division. City officials are particularly interested in hearing from people in Portland's eastern neighborhoods.  

The Proposed Draft includes new rules to guide how new apartments and other larger residential buildings are built. Major topics addressed by the project include:
  • Greater housing options and affordability to meet more housing needs.
  • Outdoor spaces and green elements for children to play, gardening and outdoor gatherings.
  • Building design that helps create pedestrian-friendly streets and respects neighborhood character.
  • East Portland design standards and street connections that respond to the area’s distinct.
  • The Commission wants to hear what community members like about the proposals and think could be improved about the proposed zoning changes for higher density housing development.
PUBLIC HEARING: Better Housing by Design Proposed Draft
Tuesday, June 12,  5 p.m.
Portland Community College Southeast Campus
2305 SE 82nd Avenue
Community Hall Annex 
(the COMX building, located at the western end of the campus along SE Division)

Project staff will be on hand starting at 4 p.m. to help people sign up to testify.

WRITTEN TESTIMONY
Written testimony may be submitted through the Map App by June 25 at 5 p.m. 

Letters can be sent to:

Portland Planning and Sustainability Commission 
Better Housing Testimony
1900 SW 4th Ave, Suite 7100
Portland, OR 97201

  • Proposed Draft Summary, 8-page summary of the major proposals
  • Volume 1: Staff Report, summary and analysis of the draft Multi-Dwelling Zoning Code and Map amendments
  • Volume 2: Zoning Code Amendments, draft Multi-Dwelling Zoning Code and Comprehensive Plan text and commentary
  • Volume 3: Additional Zoning Amendments, additional code amendments updating other zoning code chapters, providing consistency with the core amendments in Volume 2
  • Proposed Draft Summary – Español [Mejor vivienda por diseño - Resumen preliminar propuesto]

For more information about the Proposed Draft:

Visit the project website: http://www.portlandoregon.gov/bps/betterhousing    

Helpline: Call 503-823-0195; interpretation services available

Email: betterhousing@portlandoregon.gov

The Bureau of Planning and Sustainability is committed to providing meaningful access. For accommodations, modifications, translation, interpretation or other services, please call 503-823-7700 or use City TTY 503-823-6868, or Oregon Relay Service 711. 503-823-7700.

Monday, June 11, 2018

Multifamily Marketwatch Podcast - June 11, 2018

This week: After holding off for several months, the City of Portland begins spending money from the affordable housing bond; Metro receives requests from four cities in Oregon to expand the urban growth boundary, and cities across the country begin to see the impacts of the national housing shortage.



Check out this episode!

Metro Council Sends $650 Million+ Affordable Housing Levy to Voters

This November, voters will decide on a $652 million bond that Metro claims will build up to 3,900 affordable homes in the Portland metro area. Gerard Mildner, academic director for Portland State University's Center for Real Estate, described the effort as a "feel-good measure that won't be very effective" because it  will not produce enough units to meet the need.

City of Portland 2035 Central City & Comprehensive Plans Final, Fully Enacted


The City of Portland has finalized and approved the official version of the 2035 Central City Plan. The 2035 Comprehensive Plan, adopted in 2016, became effective on May 24, 2018.  

Thursday, June 7, 2018

Decoding Portland's Renter Relocation Requirements

Portland attorney Andy Hahs offers details of the City of Portland's relocation fee program. Hahs also covers potential issues with the recent draft of the City of Portland's tenant screening worksheet.



Don't miss all the latest videos on HFO-TV.

Wednesday, June 6, 2018

Portland City Council to Vote Today on Central City 2035 Plan

The Portland City Council will vote on whether to adopt he Central City 2035 plan at 2pm this afternoon (June 6th). The plan will affect zoning, density bonuses, and height limits in the central city, and will also impact roads and transportation infrastructure. A fact sheet for the proposed plan can be found here.

Tenants Facing Rent Hike Ask City of Spokane for Help

Tenants at the 12-unit Westview Manor in the South Hill neighborhood of Spokane who received notices of rent raises up to $500 per month are asking the city for help. The building's new owner has stated that he is raising rents to meet current prices in the area, and he intends to renovate the building and install new appliances. Tenants were alerted in late May that the rent increases will go into effect July 1. The tenants proposed a program to help with relocation costs at Monday's City Council meeting, and are advocating for a law that requires landlords to give more than 30 days notice of a substantial rent increase. The City of Spokane announced on Tuesday that it is working with the Landlord's Association of the Inland Northwest to come up with a solution. Read more.

Tuesday, June 5, 2018

City of Portland Using Bond Money on First Turnkey Project

The City of Portland has agreed to purchase a development on SE 105th Avenue and Burnside using $14.3 million from the affordable housing bond passed in November 2016. The purchase is part of the new "turnkey" pilot program the city began late last year, which allows the city to purchase new developments rather than starting from scratch on a new development project. This is the the third purchase made with affordable housing bond funds, after the Ellington Apartments and the Safari Club, a former strip club on Southeast Powell Boulevard slated for redevelopment. The development on SE 105th and Burnside is 51 units and will open in July. Read more.

PSU: Hundreds of New Studio Rentals Planned Near Campus

The Portland State student newspaper Vanguard reports that hundreds of new student housing units will soon be available near PSU. The paper reports that the Portland Design Commission has approved plans from College Housing Northwest for replace two 100-year-old apartment buildings on the corner of SW 11th and SW Clay Streets with 259 studio rentals and 1,200 SF of retail space on the first floor, along with bike storage for more than 300 bicycles. Read more.

Monday, June 4, 2018

Oregon State Government Announces $54 Million For 837 Affordable Housing Units

The Oregon Housing and Community Services Department announced today that it will make nearly $54 million available for development of 837 affordable homes throughout Oregon.

The current round of funding is for nine affordable housing communities in Lincoln, Umatilla, Multnomah, Marion, Polk and Washington counties.

Another round of funding is expected in the fall.


Multifamily Marketwatch Podcast - June 4, 2018

This week: The Portland City Council took an initial vote to allow taller buildings in Portland's Chinatown; Tacoma appears on track to overtake Spokane as the Washington state's second largest city, and the CEO of Seattle-based real estate website Redfin blames restrictive zoning laws for the country's housing affordability crisis.



Check out this episode!

Friday, June 1, 2018

Oregon Economic Forum Director: Willamette Valley Economic Indicators Remain Solid

Timothy Duy, Sr. Director of the Oregon Economic Forum at the University of Oregon in Eugene, offers a comprehensive look at the factors influencing the current economic market in the southern Willamette Valley. Duy's remarks were delivered at the April 2018 Multifamily NW Apartment Report breakfast at the Oregon Convention Center.