Monday, March 30, 2020

HFO Multifamily Marketwatch Podcast - March 30, 2020

Oregon and Washington issue stay-at-home orders; Oregon’s governor delays state tax filing deadline, and local, state, and federal government work on funding strategies to offset the pandemic’s economic impact.


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Oregon Governor Kate Brown announced last Wednesday that the state’s income tax deadline will be moved to July 15th. Her announcement came less than a week after Treasury Secretary Steven Mnuchin announced that the federal tax filing deadline would be delayed to the same date. Also, Portland arts tax filings will be due in July. Oregon’s filing extension applies to personal and corporate income tax filings. However, corporations that are making estimated tax filings for the current tax year will still have a deadline of April 15th. The extension is due to the impacts of the COVID-19 pandemic, but some lawmakers have expressed concerns that the delay in revenue collection could impact recovery efforts. State Senator Elizabeth Steiner Hayward of Portland estimates that the state could forgo $300 to $500 million in the short term as a result of this decision. Brown acknowledged the complexity of balancing these concerns, which required her to weigh lower revenues and the need for an expensive public health response against the large number of people whose lives have been impacted by the pandemic. OPB – Oregon Delays Personal Income Tax Deadline until July

The Portland City Council passed two measures on Wednesday that dedicate a total of $4 million to emergency efforts aimed at tackling the impacts of COVID-19. The first measure transfers $3 million in unallocated reserves from the General Fund to an “initial incident budget.” Of this, $1 million will be directed to a Small Business Relief Fund that will be distributed to approximately 150 local businesses. The rest of the $3 million funding package will be allocated to coordinated response efforts, including shelter beds, handwashing stations, and protective gear for first responders. The Small Business Relief Fund will be administered by Prosper Portland, which will also add $1 million from its own budget to the Fund. As of Monday, March 30th, businesses will be able to apply for grants up to $10,000. The city plans to prioritize companies that have seen at least a 25% decrease in revenue, but which have continued paying employees or providing workers with healthcare benefits. Businesses owned by women and people of color will also be prioritized. Prosper Portland plans to distribute money to selected companies by the second week of April. According to the Oregonian, Prosper Portland is also considering using $1 million from the enterprise zone tax abatement program to fund five-year, interest-free loans to businesses. Also, the City Council approved $1 million in direct payments to Portlanders, which will come out of the Portland Housing Bureau’s budget. The funds are intended to go toward necessities like food and cleaning supplies, but the specifics of the payments are still being worked out.
Oregonian – Portland Approves $3 Million in Coronavirus-Related Aid, Including for Impacted BusinessesPortland Business Journal – Prosper Portland Readies $2 Million Small Business Relief Package 

The Portland Tribune reports that the city of Wilsonville is considering significant changes for its Town Center area. The city’s Town Center plan was finalized in 2019 after years of public outreach and discussion among city leaders. In the plan, heights on Main Street were limited to 3 to 4 stories. But earlier this month, the City Council held a work session with city staff. After viewing a virtual visualization, Council Members argued that height limits for some buildings should be between 6 and 9 stories instead. Councilor Charlotte Lehan argues that taller buildings would provide scenic views of the community and that the city should be thinking about these structures from the rooftop perspective as well as the street view. Councilor Ben West agreed, describing the original design as sterile and “squatty.” But City Planning Director Miranda Bateschell explained that the public was in favor of shorter buildings and that taller ones would be more expensive to build. Mayor Tim Knapp also expressed concerns that there are not enough green spaces designated within the Town Center area. Bateschell believes that the visualization the staff provided to the city council, which spurred discussion of these changes, may not have captured the full scope of the plan. The City Council intends to revisit potential changes in the future, though a date has not yet been set. Portland Tribune – Nine-Story Towers? Wilsonville Thinking Big for Town Center

Governor Brown of Oregon and Governor Inslee of Washington both issued stay at home orders last week, telling residents to avoid going out unless absolutely necessary. Governor Brown’s order allows businesses and nonprofits to remain open as long as employees are allowed to work from home where possible. Companies that remain open must designate an employee who is responsible for ensuring social distancing measures within offices and physical workspaces. The state has opened a hotline for workers to report conditions that violate social distancing rules. Also, Brown’s order allows coffee shops, cafes, and restaurants to remain open as long as they are only taking pickup or delivery orders. Doctors’ offices, health care facilities, grocery stores, pharmacies, pet stores, and veterinary offices may also remain open. Childcare facilities that serve 10 children or fewer can continue to operate, though priority must be given to the children of medical professionals and first responders. Businesses that rely on foot traffic and close interaction with customers are required to close. The order also bans all social gatherings and outdoor activities where people are not able to maintain 6 feet of distance. People or businesses found in violation of the rule could face Class C misdemeanor charges. Governor Inslee’s order is similar to Brown’s, requiring the closure of a large number of businesses and the cancellation of social events as well as concerts, festivals, and parades. Inslee’s order includes a detailed list of the types of essential companies that may continue to operate, such as law enforcement, health care, manufacturing, childcare, food and agriculture, transportation, finance, defense, media, and local government. While Brown’s stay at home order is tied to the state of emergency, Inslee’s mandate is scheduled to end on April 8th. Oregonian – Oregon Stay at Home Order: Where Can I Go? Seattle Times – Here’s What Gov. Inslee’s New “Stay-at-Home” Order Does and Doesn’t Restrict

In the wake of Oregon Governor Kate Brown’s stay at home order, many homeless residents are wondering how they will be impacted. Unlike similar rules in other states, Governor Brown’s order did not carve out an exemption for homeless residents, who are, by definition, unable to stay at home. The rule requires residents to keep a distance of six feet from others, and a violation could result in up to 30 days in jail or a fine of up to $1,250. But homeless residents and social workers argue that it is much more difficult for people in homeless encampments to maintain an appropriate social distance. Raven Drake, who runs Street Roots' coronavirus action team, says that when distributing items like hand sanitizer, her group works to mark off six-foot intervals, but it is difficult to enforce them. Advocates worry that the order will give police officers more of an incentive to arrest residents who group together to keep warm at night. Social workers who hand out free meals have also expressed concerns about the order. Brown’s spokesman Charles Boyle argues that the law is not meant to criminalize homelessness. Still, without explicitly addressing the needs of homeless residents, it may not do enough to protect them from being disproportionately targeted. Oregonian – Oregon’s “Stay at Home” Order Leaves Unanswered Questions for People with No Homes

To encourage other developers to adopt mass timber technologies, Ben Kaiser of Kaiser Group + Path Architecture is publicly releasing all drawings, technical specifications, and engineering documents for his Carbon 12 building in North Portland. At 8 stories, Carbon 12 is one of the tallest mass timber buildings in the US. Corey Martin of Hacker, another firm that has completed mass timber buildings in the city, believes the mass timber movement is bringing people together due to its potential for innovation. He describes enthusiasts as a, quote, “open-source community.” Both Martin and Kaiser argue that there is a lot to learn about mass timber and that the knowledge gained from completed projects should be shared with other developers. In building Carbon 12, Kaiser found that mass timber buildings fare better in seismic events due to the lightness of the structures. They are also easier to build on brownfield sites. Since Carbon 12 was completed, Kaiser has received several information requests and has given more than 200 tours of the building. The high level of interest among building professionals spurred his decision to make plans public. DJC – Eager to Stimulate a Mass-Timber Revolution

The Seattle Times reports that as Washington residents are told to stay in their homes, construction professionals who continue showing up to building sites have mixed feelings about being designated as essential. While workers on some sites have been told to go home, Inslee’s order carved out exemptions for the construction of some critical projects, including health care facilities, transportation infrastructure, and housing. Maintenance workers at public housing facilities are also exempt from the stay at home order. Construction industry groups had lobbied Inslee to allow them to continue working, arguing that they had already begun taking precautions against COVID-19 infections. But Seattle Times reporters spoke with some construction workers who say that these precautions are all but impossible to follow in some circumstances. One worker explained that on residential building sites, a large number of workers may end up crowding into unventilated rooms as small as 600 square feet. While homebuilding is allowed to continue, at least one home builder, Sellen Construction, has halted work for two weeks due to health concerns. CEO Scott Redman has pledged to continue paying the company’s 320 employees during this time. But despite the risks, some construction industry professionals would prefer to continue working to ensure that residents continue to feel safe in their homes. Portland Business Journal – Portland Building Owners Stress Cleaning, Other Precautions amid COVID-19 Pandemic

Finally, a new report titled “More for Less?” published by Harvard’s Joint Center for Housing Studies evaluates design and construction strategies that could begin to address the high cost of housing. The report’s author, Hannah Hoyt, conducted 30 interviews with construction and policy professionals to determine the extent to which construction choices could impact the cost of housing. Hoyt acknowledges that significant policy changes at both the local and federal levels are needed to increase the construction of affordable housing. Still, she also points out areas where building professionals could start to reduce costs until these policies are adopted. Hoyt points out that the solutions will not be the same in every market, and that industry leaders must evaluate what makes sense for a specific project or region. One aspect of construction that is more universal, however, is time. The longer a project takes from inception to completion, the more it will cost. While developers do not necessarily have the power to reduce approval timelines, they may be able to lessen the amount of time spent on design and construction. Hoyt also argues that a focus on building efficiency can improve the design as well as lowering costs. In her analysis, Hoyt focuses on ways to reduce land costs, soft costs, and hard costs, which include site preparation, structure, interiors, and services. She hopes that by sharing strategies gleaned from these interviews, she can provide best practices for cost reduction in multifamily construction projects. JCHS – More for Less?

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