Planning and Sustainability Commission 02-13-2018
Fairly. Okay. I think we're ready now I. Think. I'm ready now. Welcome. Yep, go ahead Mike what was that that's. A little that's a little better. Okay. Say. That again really hear that. Okay. Turn. Up your volume Mike oh. I'm. Sure it is okay welcome, everybody in Mike, this. Is the, February, 13th, Portland, planning, and sustainability Commission. Meaning, on the agenda. Today we're, gonna have items. Of interest from commissioners, followed. By the directors, report and, budget update. We. Will then take on the consent agenda and on the agenda today as consideration, of the minutes, from January. 9th meeting. That. Will be followed by a briefing, which is an overview of the housing development trends. Another. Briefing, which is an inclusionary, housing. One-year. Permit analysis, update and, then. That will be followed by a briefing. That is on the residential, infill project. Economics background. So. Thank you being. February, 13th, Julie, was sweet enough to get everybody, Valentine's. Day sugar, which, is on the back table here so please help yourselves and thank Julie for doing that. So. With that kind of, interest. Okay. Theresa, so. Yesterday. We. Met with Castro. Portland, to work a little bit on the, affordable. Commercial bonus, so you know there's plans in place I think there's gonna be another briefing later with, some other commissioners, so things, are happening. Great. Anything. Else. No. Okay. Directors, report Joe. To. Two, items. So. As you know Andreas, is. Working. For the housing Bureau for a few months now and so he no longer can. As an active member of the PSC so we're starting, the recruitment for the next, youth. Commissioner, to. Fill this position, so. You all are going to be receiving an email shortly from, Susan. With more information and we're encouraging, you to sort of spread, this. Information out through your networks to get. A strong. Pool of applicants, who are interested, in this position. And. We'll be reviewing applications on. March 16th, and we, expect to have a new Commissioner in in May okay. The. Second item is. A. Number, of dates for. Upcoming, items. At City Council. First. The. City Council is going to vote. On. The amendments. For. Central city 2035. On March. 7th, at 2:00 p.m. so. That's the. The. First of the the sessions. That, that, closes. Down the total list of amendments. And. Then. Starts. To vote. On which, ones get into the plan. The. Map refinement, project. Is, at City, Council on March 14th, at 2:00 p.m.. The. TSP, the transportation. System plan is at City Council on, March, 21st, at 2:00 p.m. and, the. Reconciliation. Project. Is. At, City Council on March 21st. At 3:00 p.m.. So. That's. It. Great. Thank you. So. First, on the agenda, oh no I'm sorry we have the consent agenda next, move. Adoption all. In favor aye. Opposed, none. That. Passes, thank you, so. Now first. Briefing. On the agenda is the overview of housing. Development, trends, and I believe, that we've got Tyler, Nick and Tom, and you, guys get to be our panel for the whole day is that correct, fabulous. Welcome. Mic we can hear, you rustling paper so you might want to put us on mic on mute. Thanks. So. Thank you commissioners, for allowing me the. Time and space to provide an update on some of the development, and affordability, trends that we've seen in our city my, name is Nick Coble I'm on the Housing.
And Economic Planning team here at the Bureau of planning sustainability. The. Purpose of this presentation is, provide a foundation for, other work that we're doing in the bureau around the residential infill project, and the, better housing by a design project and today, I'm going to touch on a few themes, first. I'm going to talk about how, we are in a rapid growth development cycle, far surpassing, our pre recession levels. Next. I'll show that the way we're going is consistent, with how and where, we've plan to accommodate, growth. I'm. Going to touch on some specific, development. Trends in 2017. And lastly. I hope, to demonstrate how were becoming, a much more, unaffordable. City even for moderate, income families. So. In this first part I'll talk about some characteristics, of this development cycle which. Has seen record-breaking, volumes, of development specifically, in. Larger. Multifamily. But. Before talking about that, it's useful to look at the housing stock today that, makes up our city today the. Graph here represents, all. 256,000. Occupied, housing, units in Portland. The. Colors are the types of units from. Detached single-family in yellow to larger, multifamily in blue, on the left-hand. Side our. Owner-occupied. Housing units. Which comprise just over half the housing stock and on, the right hand side are renter occupied. Most. Units almost 60% are, attached single-family which is especially true for owner-occupied, and the, blue area are larger, multifamily units in structures. With 10 or more units. The. Crosshatch area here, is the share that's in the Central City which is about 60% for owner occupied condos, and 40%. For, larger rental, apartments. I. Think. This diagram is useful because it provides the context, context. About the growth, we're experiencing, today as I'll. Soon talk about um uh most of this growth was last, year was in larger multifamily, units. And. Although we're growing in other housing, types this piece of the housing composition, will, continue to play a prominent role. Quick, logistic, I use the term permits, and units interchangeably, the, trends we'll discuss today are for residential, permits that projects. That have been issued a building permit meaning, they've paid their SDC's, and the developers, are free to go build those projects, it's. Different than actual physical, production. And. It takes about 18 to 24 months to get from submitting, your permit. To getting. Your certificate, of occupancy so, the ish the units. That we talked about today in 2017. Will likely go online in 2018, or 2019. So. Let's dig into the numbers a little bit the. Chart here shows the trend in new housing units permitted annually, since 1995. What's. Immediately evident is the volume of development, following the RISC recession, followed. By a big spike in activity last, year in. 2017. We issued almost seventy, four hundred, units which. Is nineteen hundred more units than in, 2016. Or a 35%. Increase. Some. Of the spike was due in part to, developers. Rushing to have their projects. Vested prior to the inclusionary housing regulations. Which were announced in spring of 2016. When. We look at five-year unit totals it's clear we're booming having. Exceeded our pre recession levels by almost ten thousand units since. 2000, we've, added over sixty thousand housing units and this increase accounts for some of the growing pains that we hear about it's.
Not Clear though whether this is this post recession activity, is you know a new, normal or whether it's the, peak of a development cycle. Another. Theme on our recent growth is that it's remarkably close to how, and where we've planned to accommodate, growth the. Comprehensive plan calls for accommodating. 123. Thousand new households, primarily in centers and corridors and in the Central City and we're. Sticking to that plan fairly, well. To. Remind you of some of our planning geographies, and, goals there's three. Areas where we plan to accommodate new growth about. 50%, of growth is planned for centers and corridors which, is the orange, area. In the map about. 30%, in the Central City and about 20% in other areas, which is shown in yellow this. Is that the the 50 30 20 split that we've talked about in the past and in, the last five years of activity we are coming very close to the split with, a little bit more in centers and corridors and a little less in other areas so. This shows that we're going in the right places where we've planned for and expected, growth. The. Comp plan calls, as I said for 123, thousand new housing units between 2010. And, 2020. 35 and so. Far we've permitted about 34,000. Of them or about 20%. 27%. And this, growth rate is consistent, with the time frame where seven, years into a twenty five years period, which is about 28% of the way there if, we, can sustain this growth rate we, will be on track to meeting this growth allocation, so. Not only is the siting, of our units, consistent. With the plan but also the volume of growth is tracking as well. I'll. Talk now about the specific activity, in 2017. Last, year multi larger, multifamily projects, were the primary drivers, of new growth and most, of these units were. Studios. And one-bedroom, apartments, another. Key trend I'll mention is the prominent role that 80 users are coming to fill. This. Map is an overview of where the 7400. Units permitted in 2017, where we're. Permanent, larger. Structures, are shown in blue and smaller. Structures, in green and yellow, a, little, bit of good news is that about, 80 percent of these units were issued in existing, complete neighborhoods which, compares to about 65, percent of households, today who live in a complete neighborhood. Our. Portland plan goal is to have about 80 percent of all households, live in a complete neighborhood by 2035. So. Let's hope we can keep up with this rate, of growth. So. This graph shows the single-family multi-family. Split of. The 74 hundred units permitted in 2017, and, most units last year about 80 percent of them were in multifamily, which is what I'm going to talk about first. We. Can group multifamily into, small medium and larger projects, large, projects, with a hundred or more units accounted for 60%, of, multifamily, followed. By medium. Projects between 20 and 99. Units, accounting, for about, 30 percent of that growth. So. We can break apart the chart we just shown into greater, detail and here, we see permits yeah, Union units, permitted by the size of the project. Most. Projects were between 100, and 200 units, and about a third of, the. Larger projects, were in the central central. City a, quick. Fact 3 & 4 multifamily units, in 2017. Were in a de overlay. 3. Out of 4 75 percent I. Could. Do math. So. I did a quick stand of recently completed. Projects, using the best day that I could find to piece together a, profile, of what new multifamily, looks like, so. Most of my sample, was in the Central East Side and in the Williams, Vancouver, corridor. Which is at the higher end of the market it might not be representative, of all new recent. Multifamily. But it does offer a glimpse of some. Of the multifamily, that's coming online. So. What's immediately evident is that most, of what's on the market today and the, new market our studios. And one-bedrooms, together. They account for up to 80% of, the new multi-family market. Average. Rents range and affordability, from, 110. Percent MFI for a 500, square foot studio apartment, to, about one hundred and fifty five percent MFI for a two-bedroom. 1,100, square foot, apartment. Studios. Priced at this at this range, at 1450, is, affordable, roughly, to a single, a single, person earning roughly 58.
Thousand Dollars a year and. Lastly. Vacancy. Rates have tended to be in new construction and a, lot of times developers have in recent, years begun to offer concessions, with. One or two months free rent. So. I'll turn. Our focus now the remaining 20% of units that were in one in two unit. Structures. And. The, let's. See if there was a lot. Of 40-40-20. Split, with. Forty percent in single-family. Forty, percent eighty use and about 20 percent in town. Houses and duplexes. Again. We can break this previous. Chart apart, into greater detail, the, big story here is that ad use are playing an increasingly, larger, role in unit, production, because. Ad use are in garages they're, in backyards, they're in your basement the, rough in the hidden incremental, infill that we just don't see almost. Ten percent of new single-family. Houses included. In ad, you and its construction and although. We added over about, five hundred forty new single-family homes, we, also demolished, close to 300 last year so. If ad use are effectively, outpacing, the growth of single-family, homes. Lastly. Townhomes, row houses and duplexes, they continue to play an important, but, I'll be a small, role in the unit production overall I. Have. Two. More, themes. To touch on for development, which are the trend in unit types and the trends in location, the, main point here is that a to use and multi-family our construction. Is up while land supply continues, to constrain, growth in single-family construction. This. Slide shows the graph in dwelling units since 1995. Broken, out by the type of unit there. Are two points to make here first, the multifamily development, is capturing, an increasingly, larger, share of development. In this cycle and last. Is the recession. We. Didn't stop growing between 2007. And 2013, having. Added over 24,000. People but. Our unit production, dropped by over 50 percent in this period adding about 13,000. New units most, of which were studio, and one-bedroom apartments. So. These this, graph shows the same as a previous but each unit, type is broken out. Note that the skills do not match, they're, shown like this just so you can see the individual, trends, of each housing, unit. Pipe and. In each of these trends are multiple, factors that are acting, on it, including the regulatory, environment and market dynamics. 2012. Was the first year of the build built, small lived large conference, and it's also when the tiny house movement began. To take off the. SDC waiver for ad use was also introduced in 2012, and we've seen exponential, growth in ad, use since, that. Period. Single. Family single. Family has been the decline in this development cycle which. Is in part caused by the constrained land supply because. There's a mismatch in land values in. Construction. Costs and achievable sale prices, it's becoming less of being feasible. For single family to. Pencil out. For. Multi-family we've seen huge. Increases. In new units most, of which were in amenity and proximity, rich locations, and this, rise has been in and, in, this rises also because. Of an increase in lender confidence, and for. The return on investment. Lastly. Townhouses. And duplexes, geared toward ownership, typically, come on line at the end of a development cycle which we soon might be approaching.
Lastly. I'll dig more into the specific, locations, that we've seen growth the. Big themes here are that the central city and inner neighborhoods, are absorbing much of the growth while eastern neighborhoods and western neighborhoods. Start. Have slowed, a bit in this development cycle, in. This ship that will see is largely, demand driven. So. For. This part I'll referenced the five Portland, pattern areas here's. A map to remind you where those are one. Quick note is, that. In. The northwest district and south macadam although they're on the west, side of the river they're part of the inner, neighborhood. Pattern, area. So. Again this graph shows the permit activity between 1995, and 2017. But this time it's broken up, area the. Main point is that we seen a lot of growth in inter neighborhoods, in the central city together. Accounting, for 80 to 85 percent of the growth this development cycle. The. Contrast, here is that eastern, and western neighborhoods. Have started to dry up, the. Main driver behind this is demand we've, seen a lot of growth in higher wage jobs primarily in the central city and. The. Back to this in this back to the city movement means that a lot of people's preferences, have shifted toward amenity rich complete. Neighborhoods closer to where their higher paying job is. Again. This chart shows the same data we saw just a minute ago but broken out by pattern, area. Scales. Still don't match, internet. Roads have really, begun to boom they've tripled in volume since the recession. This. Is largely demand driven as I mentioned, but these neighborhoods, are also, have some of the greatest growth capacity, since more land is owned for higher density uses. The. Central City is also playing a prominent role but there could be more. Units in this cycle part. Of it is a rising cost of land acquisition as, well as. Stealing. Concrete's, and construction, but. Another reason could be that there's uncertainty around the Central City 2035. Plan which is yet to be adopted. Developers. Could be waiting to see if there's how. The new, potential. New density, allowances could impact the feasibility of their, projects, and, lastly. Eastern neighborhoods were slowing down even since before the recession and they, still haven't quite recovered. That. Was a lot of data. To talk about but, we're still not done. So. What I just showed you is that we've. The. Way we've been growing recently, has been close to how we planned for that, growth as in, terms of the.
Location Of it and the quantity of growth. We. Also looked at some of the trends in demand unit types as well as the. Specific location, of that development, I'm. Now going to talk about some of the housing. Affordability trends. And none. Of this is going to be good news we. Are entering an affordability crisis, even for moderate income families. And unless we forget this crisis has been ongoing for communities, of color for quite some time. I'm. Going to start off with an animated visualization. So let, me take, a minute to explain this each. Dot on the map in front of you is a home sale. Of. The either a detached, single-family or, a condo. And the. Year is shown in the top right here. It's if. I can give this here's. 2000. So. The blue dots correspond, to an affordable home sale while, the orange dots were unaffordable. And, affordability. Can, be defined many different ways in this case it's a. Mortgage, payment that does not exceed 30 percent of your monthly income. For. This visualization we're using, 100%. MFI which changes, based on the year but for 2000, it was about seventy eight hundred dollars per. Year seventy, eight thousand dollars that's. $1,700. You, it. Shows, the. MFI ranges, it shows the maximum monthly mortgage payment, that a household, could afford and a corresponding, maximum, home. Value that. That income, range could afford. There's. On. The far right column there's, a realistic scenario which I'll be referring, to it's, assuming, a doubt five percent down payment and, I don't want to get bogged down in the methodology too much right now so. I'm going to push through this what. I want you to focus on is how the orange dots in this map. Will. Express, upward and outward as the years progress. You'll. Notice too that the volume of sales change, over time through the density of the dollar, I'm. Gonna let this loop a couple times and I'll. Let you know when it starts over so. Let's take a look. We're, starting over again in 2000. Yeah. It's changed quite a lot. I'm. Gonna toggle back and forth between the year 2000, and 2017. Just for. A couple seconds here so we can see how Ford abilities to change between these two years so. In 2000. Since. 2000, meeting, home values have almost. Doubled. While. Median family income has increased effectively. Only 5%. Another. Stark contrast, is the difference between 2016. And 2017. So. Take a look at affordable, homes in East Portland and foster, in 2016, and. How. Those purchasing, options I've almost completely dried up in 2017. This. Chart summarizes. The trend we just saw showing, the, share of home sales that were affordable, to, the average household, of four in.
2007. And 10 homes were affordable and but. By. 2017. Only one in ten homes, were affordable to a family, of four earning 100%. Median family income. Another. Point this chart helps make is that although the recession marked quite a decrease, in home values it released, it relieved, released. Well, released. A pressure belt on this squeeze felt by potential, homebuyers. The problem with medians, and averages though is that it doesn't quite capture the racial disparities, the. Affordability crisis, is much more severe, for families of color for. Example median. Income for black households, is three times less than the median family income between 2012. And 2016. What. This shows of that right now the affordability crisis, is being, felt by moderate income households but. If you run the numbers we just saw four other groups it shows the affordability crisis, has been running on a lot longer for communities, of color. So. I just showed you this map was a minute ago 100%, MFI in 2000. We. Can run this as well for, 50%. If I to see how that could be felt for communities of color and. Near. 2000, this is what was affordable, for 50%. MFI. The. Next two maps, summarize affordability, data we've just seen but looking at the track level. For. The first one here 2007. It shows the share of homes that were affordable, to. A hundred percent MFI and keeping. These same, percentage, totals we can see what it was in 2017. This dark, purple dark blue area, in East Portland and st. John's that's. 22. 92. Percent, in 2007. Oh. That's. A share of homes that were affordable and. Then. In 2017. We. Don't get up we. Don't even get up to 92 we could up to 42 percent and that's mostly. Sticks, around. In East Portland and st. John's. So. Lastly I'm gonna touch on rent, increases briefly, the, map here shows the annual average percent, change between 2012, and 2017. In. This period real rents in the city went up 30 percent from, about 1430. To 1880. On average for all unit types, some. Of this increase here is associated, with new, growth for example along the Williams and Vancouver and MLK corridor, when. You add a large volume of new growth at, higher price points that, tends to to, lift the average up but. Another reason for the rise in rents is the demand to live in closer, in neighborhoods there's. Research, showing Millennials, are delaying getting married delaying having children and purchasing. And delaying purchasing, a home for. Many reasons and the affordability crisis, for homebuyers is one of those drivers. And. These dual income households, and others with higher incomes. And locational. Preferences, are the are the, ones who were pushing rents higher. So. This presentation has shown you the most up to the up-to-the-minute, most, accurate data that we could find it, confirms. Some of the stories we hear and some of the experiences that we feel although. This growth we've seen has been consistent, with how, and where we want to grow many. Residents are being left behind. Despite. Huge volume huge. Volumes of new units, coming online this development cycle it's, ultimately not enough, to demand of Portland's residence. This. Is especially alarming when we approach, the end of this development cycle what's. Going to happen when we get through the permit backlog of. Developers. Rushing have inclusionary, housing requirements. How, will increasing, cost of construction and capital as well as tightening lending practices. Impact. Our ability to bring new units to the market and, as, Portland continues to add new jobs and new residents who. Will be the highest bidders on rents. And homes so. These are all pretty tough questions for us to consider and I think you for, your time and attention today and I can take questions. Before, we move on to Tyler's discussion, on inclusionary. Housing. Thank. You that. Was quite, sobering, and very, appreciated. So. I see hands up over here, Chris. Teresa, Jeff pleasure, okay. Start. There and that, looks like maybe Eli, so we'll go. That way first so. I'm interested, in the shift in unit. Size towards. The studios, and one, bedrooms, an. Issue we've worried about here quite a bit and family.
Housing So. Do. You have any correlation. Between the, development patterns, and the, household. Size patterns, can, we see where the families are going how. Does that we're. Seeing families cramming, into bedrooms, and two bedrooms how, is that tension. Resolving, itself. So. There's. Some. Of the data points we're getting a feedback loop from Mike. Yeah. We are getting a feedback loop. Perfect. And that. Thank. You go ahead Nick some. Of the trends that some. Of the data points that we use are oftentimes. They, that they lag quite a bit behind the actual market, data that we come into contact with so, for, example to look at overcrowding, and to look at unit. Composition, the. The most the latest and most greatest, estimates, we have are between 2010, and 2014. Meanwhile. It's coming on the market today is. We. Have data that's talked, that. Looks. At 2007. Tene 2016. 2014. Production. So there's a mismatch between, what's, available and the, trends that we, have the. Data that we have access to however I. Think, we can try. To look into some of those trends at least looking. Backward in time. I'll. Just jump in real quick and add something when. Dick presented this information there was one thing that I thought was probably you're gonna need to get, that closer, when. Dick first presented this information there's, one thing that I thought was pretty. Surprising, and that was the. Amount of. New. Two-bedroom, units are being constructed multifamily, buildings, we hear a lot about only studios and only one bedrooms but I think there was a surprising share was that 20% of two-bedroom units and multi-family recently. Which is I think more than I, would have thought there would've been for two-bedroom units and so when, we think about affordability, in the end that sort of family, type or household, type that can go into that, using. The HUD fair encumbrance, that the housing bureau uses for affordability levels, a two-bedroom, unit is a three person household, so that is a family household, for a three-person family. Whether however. That composition is made up of adults. And children so. Two bedroom units are family size units but. A lot of those two, three. Sometimes. Four bedroom, units are happening in the single-family structures.
Single-family. Areas, are 5 or 2.5, and. Attached and, detached single-family. Right. But that single-family is way. Out of sight for most households. Right so that's, right well some. Of the suburbs you know what's, happening so. Tyler, I'd like your sort of macro. Economist. Look on we, had a couple charts that showed super. Dip in 2009. And then a pretty steep ramp just. From a, macro, kind of perspective. Is. That. A cycle, that we should see come down is, that, like a cliff, that's just gonna go wherever. Teresa. Wants to invest in the stock market or. The. Real estate market, but, Tyler, you could bring that microphone towards, you or. Maybe not its. Holiness. Best because I thank you thank, you. I'll. Just lean in as best as I can on this one you. Know calling, calling, the peak of the market is something, that nobody really feels comfortable, doing and. Nor do we have Oh. Thank You Sandra. That's. Much better nor do we have the ability to look at the data and see what's happening I think there's a couple things that we'll talk about the inclusionary housing, piece. And a single family piece that we're, starting to see concerns, about. The. Ability to deliver new construction, given. Higher construction, costs and given land prices and the ability for residents, in Portland where our wages are to support those higher. Rates. That you would need to get just for those increasing, costs so I think we can start to see something sort. Of kind. Of shifting, there a little bit and the geography of where we've seen development, happen has been started. Shifting a little bit as well the chase lower land values, but. I'll talk about that in a little bit for the next presentation. Yeah. Question. Or just thank. You great presentation, I hope we can get that can. You email it to us or it'll. Be anything else right, okay. Be. Destroyed it right after this presentation, we. Can't get our hands on it we have to memorize it tried. To take my notes, what. Technical question you showed the rent increase. 2012. To 2017. What's that annualized, or is that on yeah that's presented, her, year per year okay I thought so but it didn't say that so. My other question is sort of picking up where Chris and Tyler were going you were saying you were surprised or pleasantly surprised that it. Was 22% of the new multi-family were in two bedrooms. Seems. To me the real data point is are we, getting house are we getting kids, in, those, units or not I know I know totally, you, here in the pearl, Gigi. There seems to be a lot more kids but I'm wondering if we coordinate, with the school district can we get some some. Way because it seems to me the danger, of, you. Know turning, ourselves into, a multi-family. Cities are we gonna lose, children. We're gonna you, know damage, the school district, so I'd be curious if. You have a quick answer great but I just think as we think through what does that mean just saying, we have X number two bedrooms or three bedrooms, unless we know it's producing its. Children. Living there I'm not sure what we've gained other than people can afford you. Know either at roommates or people. Can afford it but we need to know if they're yeah. Or in the school district I think we can check, in with, the school districts, and look at their enrollment, trends what we've heard anecdotally is. Especially. The David Douglas school. District. Has seen it level, off or even decline. A bit which, when we were doing the comp plan it, was a big deal, about overcrowding, and. Such. So we, can go out and and pull together a report on those enrollment, trends over the last four. Or five years to look, at what what's. Happening happening. With. Families. With children aged, children which, we. Expect. To be a declining, share over. Out. To 2035, but, at the same time we expect, an increase in the overall number of those families. So we. Can. We can bring back as especially. For the three major school. Districts, Portland public park, grows and David Douglas. Just. A piggyback, on that and perhaps. It's. Not. Having children help educate, me so, kids. Going to school in the prole or kids and living in the Pearl District where do they go to school grade, school I get high school but. Okay. Yeah. And there is an era K through three program, in in the Pearl yes, they, both the Chapman, yeah and go home into, the Pearl some, Chapman is overcrowded right, and they're using.
They're. Actually, releasing, private, sector develop building, for. Portland, public school right, so, there's. There's. Evidence of the need and there's some creativity trying to solve it but there's. They're. Still trying to solve the problem. In, terms of families I think there's another point, that's non school-aged, children in between birth and school-age children that's directly, related to the recession and household form a formation an additional. Household. Cost that many families, and individuals, are facing now that are younger so. If you were. Entering your career, and you're under the age of 32. Or 33 you. Began your career in the recession in the middle of the recession and that impact, has, really, lasting, impacts on how you make decisions both, on the. Home-buying piece as well as on household formation and having, children so well we can look at what, the impact is on the school districts, I think another thing that we're going to want to look into that we will want to look into is is birth, information. From Oregon Health Authority, because, I have a sense that as folks. Have come out of the recession and gotten more comfortable after, the, devastating, and gnarly impacts a lot of folks felt they're, buying their first houses and they're having their children and. It might be happening in different locations, and it has before so I think it's worth us taking a look at and seeing that school-aged, children versus. Household, formation and new children after the recession because those the, recession did have very early impacts on individuals, and families with first-time. Careers with the ability to find jobs with student loan debt with all sorts of different things I think we have to a, lot. Of these issues we have to be pretty comprehensive and looking at make. Sense Eli. Had his hand up and then the shell and then Katie. Thank. You that's a great presentation dick um I've got all. The questions but all I went down to three, there's. Three people like. To do it, on the. Sink, on the family size. With. You. Mentioned that geography. Is just constrained for single-family homes, the, only other way, three. Plus bedroom units are getting built is probably in the duplex, townhouse model it seems a nice so, I'm wondering whether that seems, like you constraint market, also. The. Other day, I've, looked a lot at the east side but I hadn't looked at the west side so when we went through the iterations, of the map I looked there look like about two thousand six or seven that's when that area became unaffordable, pretty.
Much So I'm wondering about whether. That you, see is a constraint. Explanation. For why, it's, been affordable unaffordable. For longer on the west side and the, last question I had is the 80% I love the target of 80% or more of, households. Living in livable neighborhoods and, I'm. Wondering, whether. You, see much opportunity, you see opportunity, for that more. In creating, more. People living within existing, identified, neighborhoods, or creating, larger. Portions of the city that are identified, as, livable. Neighborhoods, I'm. Guessing that so, now it's been more of the former more people living in place that are already livable, I'm, wondering whether there's projection. That we get more, parts of more of the city universally, being livable. Just. To, take that last, question first, yeah. That's in in the growth scenarios, report, that we did for the comp plan it really showed that we. Can't grow our way to meeting, that goal that we have to expand, in the, area. Of the, livable. Complete, neighborhoods, through. Investment, in infrastructure. Parks. Transit, service. Using. Like prosper. Portland's, NPI. Program, to boost, up commercial, districts, and. Then that's the way we're, really going to be able to. Achieve. That, goal and, and have people live in complete, neighborhoods. Because. The, growth really is by. The time we get to 2035, is, is only. 3035. Percent of the city. Two-thirds. Of, everybody. Who's gonna be here in 2035. Are already on the ground today so you. Got to make those those, incomplete, neighborhoods, complete, through other investments. Not just growth. Turn. Your mic on please thank, you whether, there are other market. Constraints, either, in family housing in the duplex townhouse or maybe Westside in. General, I. Think. When. You saw, that, single-family. Curve, on. The activity, you, know it all dropped in the recession and there, was a little bit of a rebound where, where people you know we had a bunch of suburban.
Developers, Turned their attention to Portland, and infill and picked, off the low-cost. Single-family. Homes and we're, doing that and that has now tailed off and I think that, corresponds. With what, Nick showed in terms of the rising. Home. Values, that, make it unaffordable. In, terms of land costs to demolish. A home and do one or two replacements. And that's something. That Tyler, will get into later this afternoon. So. I think it part of that is the. Just. The market, it's coming, to a expensive. To, buy that home and, tear. It down and. Discover. Those two Lots that lie underneath it. Did. I get all three of your questions. And. I'm surprised. I'm. Surprised duplexes, in town house you don't see more of it because you're sharing the cost of land housing. Land, costs are high I'm, wondering, whether the. Lack of. Parts. Of the city where you can do that is tamping that market down or we're seeing there's. Enough market to do it that's, the what's. Being demanded for that. Michelle. Oh. Your. Turn your microphone please. Is. That on yeah so, in terms of people that rent rooms in single-family, houses, how, does that feed. Into all this do. We just lose. That or do we have some sense of how, people. Are using that as a tool I. Hate. To just. Say oh the data don't say it but but. I know people right. I just. Picked up my keys yesterday, to a new place moving out of the house with a single-family home owner I was, one of those people as of yesterday. But. It. Really, does state you have to really dive into. More. Micro, data, level stuff, which is you. Know. We. Have the capacity here, but not. So much. It. Was just curious how that plays, out even if the single-family homeowner doesn't live there if you have four people that are living in a, house and, the house is. 2,000. A month but, they're effectively getting the unit for five hundred I'm just trying to understand how. That. Plays into all this. I'll. Let Tyler Tyler that, just shows up as one four-person. Household. That's renting, their structure, okay. That's. How and, it would show up as a non family, or non, household. Without school-aged, children, okay. But. It's it's a larger four-person, household. In. The first sort of blocky, diagram. Chart that Nick showed it, was the blue, block. On the right-hand side of the chart which is the renter occupied single-family, structures, generally. A relatively. Small share of our overall rental stock but is widely. Distributed throughout all neighborhoods so we have some areas I have a higher share of residential. Rental, multifamily and we have areas, that have predominantly single-family. In character, and a lot of the rentals are in the single-family so a little bit varies depending on where you are in the city. But. It's mostly going to show up enough in that sort, of blue corner, in the right-hand side of that first chart. I. That. Was that. Was pretty it, was very graphic but very. Graphic you know. But. Also at, what I was seeing was just like. Two cities it seems like there's two cities and. That. Kind of you know, hurts. A little bit. One.
Of The things that I'm that. I. Was. What, I was thinking, was that our policies. And the way the. City is laid out seems, to really. Privilege. A certain part of the city. It you, know everything's, blooming, there. People. Are not necessarily. Happy, about all the change and the growth but a lot. Is going on. And. I I bet if we were looking at. How. Much people were making I was. That one of the slides I'm not sure if I saw that just, where the. The wealth was in the city I bet. We know where that would be I. Was. Wondering, I mean one of the things that East Portland. Activists. Are talking about now. Is doing, a plan. That. Really focuses. On East Portland not the way the East Portland action plan does but. Very detailed, on how to. Develop. East Portland and. Joe. And I have talked about it and we're going back and forth at this point we, one. Thing's is we were asking for a quadrant, plan and I I guess that does, isn't quite the right word for it, but. I. Just. Think, that you know you were saying that there's not even building. Happening. Out there that. There's less building, even happening, so, something. Is wrong. The, signals, are not, some. The market, signals are not working. In East Portland is. You. Got do you have a an. Answer, to that er yeah. I have. Kind of an answer maybe I. Think. It's changing and it's changing very quickly in. East Portland in terms of how the market can support new construction, we've started to see more permits, and. More potential. Investment, activity happening in parts of East Portland where we haven't seen it before, specifically. The 205. Or 80 second or 205 220 second so, there seems to be some, investment. In some activity, that's happening. How. The, community, sees that change because there are those that benefit from the change and there are those that burn that are burned from that change and in East Portland, where. Those, there's, there's a large share. Of the population that could potentially be burdened, by a significant, change I think we have to be pretty. Careful about how we how. We try to make the market work better and what does that mean and work, better for who. But, in general I think things are changing in East Portland just. A year ago we'd be a Knick I would get a pap and and, they'd, be talking about these rapidly, increasing rents and housing prices and we didn't see it show up in the data yet and then a few, months later we were looking at it we're like oh this is you know like it. Started showing up in the data and and those were real experiences, of folks in East Portland were happening so things are changing pretty, quick a so you're saying that you you're seeing changes that just are not showing up but this there's a lay there's, a leg between inner. East and outter East rather. Than a, stoppage.
Because It almost looked like was a stoppage, well, I also think, when, you look at this some. Of the home sale. Trends. And you compare it to these rent trends, that, the home values, in my, mind, popped first, and that. Those, home sales were, escalating. First and then. The rents, followed. Because if you if you look like at, a place like the vision, and. We're. Even beginning to see signs of this on foster, Road now is that the home values around that, sort. Of escalated. The. Attractiveness, that sort, of helps prove the market for the development, the mixed-use, development. On the. Corridor. Itself, and that sort of feeds itself because that brings new amenities. We've. Seen a big run-up on. Either side of foster, in, home. Value, sales and now. We're starting to see the development permits, come in to improve the buildings or new four-story, mixed-use. Buildings, on foster, itself, I think. What this shows especially. In the last year that you've seen the East Portland home values increase, home sales increase. And now. You're gonna you're, gonna be able to you're. Gonna see, more of the rent increases, and, then you'll see the development, follow that I think, to your first point and one of the things that we're working on to bring forward is sort. Of the demand side of this and the job trends, and. What is really driving that in terms of both job. Locations, and. Wages. And the fact that you, know two-thirds of our job growth has been in, jobs. That pay more than seven five thousand, dollars and so what I like to say is we have a lot of people walking around town with a lot of money to spend on housing and, they're, gonna outbid. Where. They want to live and. The. Further you out, you get, well, that's I'm not gonna pay as much I'm I don't, want that long a commute, and. That really is the challenge for East Portland is that. We've looked at on the flip, side the middle wage job side is where. Do these people work. Looking. At the Columbia corridor, and and working with trimet on the new north-south, bus, connections, getting 120, second, too. Frequent, service, getting a new line on a, hundred. And sixty, second, north-south, line on one hundred and sixty second, now, they're talking about. 24-hour. Service, to the airport, for. Employees, coming in you, know all of that is going to make a difference, to East Portland and and the. Access, to jobs right, and just final. Is just. That what, you said is true I mean it's like East, Portland is kind of the last one, of the last places for, lower income people to live and, and. If it's just kind of lagging behind, then. We. Need, to look at it in terms of affordable. Housing and, where it can go because, we, actually don't want to displace, people out, of East Portland I think that whole, city should have a know. That that's in their, best interest, to not do that. We. Just wouldn't be the same kind of city that we are now we, would be just a high-income city, so. So. To piggyback, on Katie's. Comments. And thoughts where, my. Head started kind, of going is a comparison. To, other. Areas outside of Portland that are the same distance away and, part. Of the reason I'm going there is i I've been hearing in the development, community that. They're. Interested. In developing, anywhere but Portland due to new regulations and, so. Let's. Just pick on Tigard for a moment or something like that like are they seeing a shift that we're not seeing. Yet. They have similar, areas, of service or lack of service or whatever and and what does that mean for East Portland. That could be good or bad I'm not you know I don't I'm not making a judgment call on that but it could be informative, as to. How do we make sure we understand. How. To keep, East, Portland from displacing, people as its development, patterns change because if the development patterns are changing in the outlying areas surrounding, Portland we know it's gonna start changing even more in in.
East Portland I do think there's gonna be a lag as as, we. Tend to have more regulations, and I think than some of our partners. Outside, the city. From. What I'm hearing anecdotally. Work. In those areas but anyway so I I don't have any answers there I just swear, my head was spinning I know. Teresa had a follow-up question and, then I will say Elie if. You wanted, we we, have budgeted, tilt to, 130, you can have a few more questions I know you have a whole bunch so, let's go Teresa and andreas had his hand up Jeff are you trying to signal me. Okay. So. With. 80 use being 22%, of your, category, of single-family. Do. You see any impacts, with the short term rental market. You know there B&B kind of stuff because those would not be available. For. Regular people to live in I. Don't. We haven't tracked, that. To. Figure out and there. Is a new PSU. Survey. On. Where, those units. Goes I think. Over. Time, that. Those, ad use can be different, things at different times but I think. It's important, to get that initial investment in, that structure that's going to be there for 50, 60, 70. Years and. That sometimes it's a short-term rental and sometimes, you have a. Boomerang. Kid. Coming back and sometimes it's an elderly parent and sometimes it's a caregiver, and. Sometimes, it's just a rental for income and and, that's going to change over time. Tyler. Do you recall what the recent, PSU. Survey, said about four terminals ad, use and what they're used for. We. Can we can track down that information and, and share, it but I, think, it is a mix I, think it I also, know you, know the. Proposal. From Commissioner, you daily on the renewal, of the SDC, waiver, is to exclude short-term, rentals so if you, want that SDC, waiver you got to have, a covenant, that promises, you won't use it as a short-term rental, that's. Probably a good step in the right direction to, be. Focused, more on the housing aspects. Of it. All, no to that I am working on some research specific, to the EU and the SDC piece and how it relates to the residential infill project, that. Will be forthcoming. And in the next few months and. Most of that is just to be able to answer questions internally, for staff about what's going on with a to use an SDC waivers and short-term rentals and and different, price points and all this stuff so. Within, the next few months we should have some more information Commissioner. Howe actually, texted me a question, related a to use all right tag. That on and that's what. Percentage, of new homes being, constructed, are being built with a to use. 10%. Okay. Thanks. Thanks. For, catching that I didn't have my phone in front of me I will now go. Ahead Jeff did you have a follow up just as. I looked at your chart which, was great showing what was happening to affordability, in the 2000. You're. All planners, as well as economists, and good thinkers, what. Should this city have been doing what, could the city have been doing in those years, to. Minimize, this affordability, crisis, because. By thinking about that we may be able to think about what should we be doing to make sure it doesn't happen in East Portland and. Maybe there ways to begin to bend. The curve back but, what where, did we as a city where we missed the boat it. Was sort of this creeping.
Problem. And I, don't know if the city he recognized, it or if the city responded and, response. Wasn't good enough but you have any thoughts. Going forward, as to what what, were the lessons learned from what we didn't do as a city ten, years ago I, think. Looking. Back. 10-15. Years ago. We haven't, done enough matching. The job growth, and the types of jobs were growing with, and. What that meant in terms, of pressure demand, for housing and where those people want to live so, we're, always out there we want to create more jobs and we want to create good jobs, but. Where. Where do those people want to live and and. And I, think the, sort of back to the city movement, and where you see you, know people in the pearl and and, in Portland. You, know the reverse commute out to Nike, and Intel, is. Also, a, indicator. Of that of just. How. Successful. We were starting, with the 72 downtown plan, and all our other plans in terms of our. Neighborhood, commercial districts, and yeah, I want. To live there and so you, know driving, that demand, and, with. The job growth and yet, all, the other sort. Of existing, jobs there and the flat wages that. We've seen over this same, period, that. Has that's, where the tension has been I. Think some, of that is we we are getting. Better at that you know the commercial. End. Of, the commercial. Excise or construction, excise, tax helped sort of feed back into that so that as we're building, office, buildings, and and other sort of commercial. Development that. At least provides, a 1%. Income stream, to help with affordable. Housing programs. But. I do I do think there has been a mismatch, between. Economic. Development and the. Resulting. Demand for housing, and and. What that looks like. Uli. A full Uli conference, there was a number of sessions, kind, of on housing. Affordability, and I do have one study that came out of San Francisco, which. Is definitely addressing, focused. On San Francisco but at the same time you, know they're saying there's a lot of lessons learned because we're seeing this up and down the west coast as we're also seeing it up and down the East Coast the, coastal cities. The. Big targets, they're targeting, as causing. Some of the affordability housing crisis, is lack of funding, for mental health programs like a funding for after, incarceration and rehabilitation. And more, incarceration, rehabilitation. Or. More incarceration, and lack of rehabilitation. Federal, housing dollars, having. Been drastically reduced, and this is all since, like the 60s 70s it's, just been a slow. Progression. Of a number, of things that, have kind of gotten us to a point where there's very little, funding compared. To that point in time that. Has amp this up and. They. Show a trend from the depression. To. Like the 60s when a lot of these programs were put in place to today and, similarities. To before, the. Great Depression to. Where we are today and, funding, for kind of these overall problems and how that's kind of tied into a housing affordability, crisis, in their, opinion so anyway, I'd be happy to share it pass it around. Eli. Yes and I'm, draya's in many way. So. Great. Presentation, I really appreciated. Taking. The comp plan goals. And putting, it into a chart I did. Back napkin, math and. It came out to about a little bit under 5,000, units a year as a goal is that accurate, yeah. And. I was wondering if we could go back to the slide that had the. Different unit sizes that's. Been talked about a few times. I'd. Be curious what the numbers are on three bedrooms and more as. A component of that as well. In. This I just did a quick sample and in an afternoon and it had maybe like.
400, Units and there, was one three-bedroom. Apartment and that whole sample. And. This, is again only for new construction, so things have built been built since 2014. Right. Yeah. I think, obviously. It's a large. Part of the conversation, but as we see with larger families especially larger, low-income. You need more than two bedrooms, and so cutting, it off at two bedrooms as family, size doesn't meet the need that exists, in Portland especially, for, families. That are struggling with affordability. Going. Off the conversation on, ad use. Especially. As we try to incorporate ways, of accounting. For short-term rentals, it'd be interesting. Recognizing, the ad is make a sizable, portion of the single-family, development, and, also. Our, frequently. Short-term rentals how we count that as unit production, for residential, use if these units are going to be sometimes, short term rentals sometimes. Residential. Rental and. We're trying to count how many units were creating. For people to live in on an ongoing basis, how we count, that because. I think the city has. Pushed. For more edu construction, and I think there's there's good reasoning, behind it but. If we're, counting that it's somewhere where someone can live and instead, it's someone somewhere, someone can live for nine months and get evicted for three months while it's a short-term rental or whatever that ends up hitting out - I think we should have a different way of counting that than, other residential, units I. Think. The last thing is I know we don't do a lot of school stuff but. There's a larger. Narrative around. People. Living in you developments. And where they send their children to school and so keeping, track of what, kids are going into public school systems and what kids are going into private school, system so it's not just the existence of children in units but are those children then, go into school districts that need more enrollment, and. Considering, that and how it plays out and then you developments, we see. Yeah. I think on that last part, you know PSU. Works, the, population, Research Center works pretty closely especially, with. Portland. Public Schools and David Douglas on, their enrollment, forecasts, and they have some pretty good data you know they track as, Tyler was saying they track sort of the birth. And. And the capture rate of people who were born in Portland and who shows up five years later. At the at. Kindergarten. In the, various public school districts, so they have a pretty good track record, on being. Able to predict that so we can we can bring some of that back. Okay. Quickly Eli. I'm. Interested let's, follow up on the reverse. Commute trend. And I, forget just looking, to San Francisco to the south there's, massive. Reverse community have being there probably. Because in the suburban locations, they create big job centers and those, jurisdictions are not required to provide any multifamily housing so they don't and some, people desire, to live in San Francisco or, Oakland because it's cool, and because there's nowhere else to, live and, I.
I. Guess. That that's a trend that we worrisome for Portland, if we end up being the destination, housing. Because. Our. Suburban, partners are, providing, opportunities, for people to live there. So. I'm just don't think it's been crazy here like it is there because Oregon's land use system requires you to provide multifamily housing but if it's becoming a big. Trend then I'd, be curious, to try, that thanks, yeah. Well we, can bring back some more regional, perspective, just. Anecdotally. I think, I think. You're seeing more of that higher. Density, mixed-use development, come in in Hillsboro, especially. I think a, renko. Station, has been, phenomenally. More successful. Than than, anyone, thought I mean they had continually, had to come in for plan. Amendments and, changes to, up the density, there the closer they got to the max station. Because. There was such demand, there I think you're starting to see that in. Downtown. Hillsborough itself and certainly. Downtown. Beaverton, is really trying to bring. That scale. And level of mixed-use. Development. To. Their city center so it would be interesting over the next five to ten years to see how that takes. Hold. Right. Thank. You very much, so. Next, item on the agenda is. Clusion. Arey housing, one-year, permit analysis. This. Tyler gets to do all the speaking now. All. Right Thank You commissioners. I. Think. I'll start real quick. Give. Everybody a reminder, of where we were about a year and a half ago as. We started going through the legislative process of, inclusionary, housing we. Came, to, planning. Sustainability, Commission in November, of 2016. A recommendation. Was forwarded, to City Council in December 2016. The. Planning, sustainability, Commission did send a letter along with that that raised additional. Issues. For consideration by council, and so, well I'm going over this one-year review I just kind of wanted to remind folks that we. Were here a year and a half ago and there were some concerns at the time based. On testimony. That you hadn't heard during the legislative process, that you forwarded on to Council and. With. That I will get started here the. Real reason that I started doing this when, your review is because you asked me to. PFC, and City Council directed. That housing variant bps to do, ongoing. Tracking. And see what's going on. The. I'll. Start off with a few slides that, are that, Nick had used in his presentation, to kind of break it out into the. Housing types that would be subject to inclusionary, housing of, our total 2010, to 2035, we're looking at about eighty seven thousand units of. 123. Thousand that are in housing types that would likely be subject to inclusion area housing that's 20 units or more.
Issued. Permits this is Nick's slide, this. Is the chunk of 20, n plus units that. Would be subject to inclusionary, housing nutrition, permits and 2017, some of those are subject to inclusion area housing and are included in the, unit, totals that you received in your memo that julie, sent out last week for you all but. For the most part these are projects that were invested prior to inclusionary housing that. Would have been subject afterwards, Tyler. Can I get it just a quick clarification yes. Because that says permits then you say vested, permits. Issued so, what. About a design, review application. That project, was vested I'll, get into this. Hardest, thing for us to do and tracking this stuff was was. Trying to figure out how these are true permits these are true permits permits issued yes. Those. These are permit to have a permit issued in, the, darkest Junction PDS right yep. And then again Dix map of where the 20 units are more happening, and mostly they're in the, in the blue areas, there you do see some more activity in these Portland's some things happening along Stark and Gleason we continue to see more activity. In these Portland along Stark and Gleason but for the most part the 2017, was in these inner neighborhoods, still things, started to creep out a little bit to what work sort of talking about now as the middle ring things east of 52nd, Sellwood. St. John's parts, of North Portland kohli, that. Sort of, past. Past, 39th or Cesar Chavez out to eighty second or two or five or so and the North Portland and emcell would as well so, a little, bit of a market shift to those areas, and. Then a real quick update on what inclusionary, housing is, I always like to give an overview of what our program, looks like we. Have two different pieces we have the inclusionary housing zoning, code which is our title 33 amendments, that we made to, implement. An, illusionary housing program the state lifted the preemption on March 6, 2016. And the, Portland housing Bureau and City Council started on a process, or City Council directed, the housing Bureau to, initiate a process very quickly actually even before it was passed so, that when it was passed we could start moving on it right away. We. Adopted the zoning code on December 21st, 2016. So. It was a relatively, quick process that, from March March. 2016. Through December 21st, 2016, is when the devel it had passed the. State legislature, and we had implemented, a program in. December 21st, 2016 so. In the inclusionary housing zoning, code is a threshold, or the target so if you build a project, that, has twenty or more units in one building you are subject to the inclusionary housing requirements, there. Was a lot of discussion, about the building, piece that you could do multiple buildings on a site you wouldn't be subject to the inclusionary requirements, we.
Haven't Seen too much of that happening, so far, but. It is something that we continue to keep an eye on there. Are also our income thresholds so you have an option of ten percent of your units at 60%, ami or twenty percent of your units at 80% of AMI for, the first year of the program it was and went into effect February 1st. 2017. Through. The end of 2017 December, 31st, 2017 there, was an interim, inclusion, rate for both of those it was 8% of the units at 60% a month I am. I and 15%. Of the units at 80% am I on January. 1st of this year that went up to the full 10 and 20 so there was this interim, rate there's, also additional options, for off-site medication, there's, there's a bunch of different things there's a fee and lieu option, but for the most part what we're talking about here is how projects. Complied, with this 10 at 60 most of them were going this this route. The. Pre inclusionary, housing development, pipeline so I did, the wrote a six month memo and sent it all out to you I think in August is. When I originally, started that and sent it out, and. We. Had estimated 19. Along, with VDS estimate about 19,000, units that. Were invested prior to inclusionary housing going into effect on February 1st 2017 as, I, had further conversations. With private, sector stakeholders specifically. Brokers. And architects. A lot of folks wanted, a better understanding, of how that, vested. Pipeline was moving through the development process or in the entitlement, process and, so I really spent a lot of time Nick and I spent a lot of time going, through and seeing actually, how these applications, that were either lantus review application, or a building permit application, had, moved forward so you, can have a land-use review application, that. Gets approved and then moves, to a building permit application, and your building permit application can get issued if you, don't have the requirements, for land use review, you can move directly to a building, permit application, so, we had to do a lot of work to remove the double-counting, of those that were land-use review, moving. Into building permit when, we did that we found, at. That, point in time they're about 19,000 units in the pipeline about 17,500. Of, those were in projects, over. 20 units or more so the big chunk of them weren't projects over 20 Hertz or more so what you're seeing here is where. Those have all landed, over the last year about 5,500, of them have, moved forward into, having building permits either issued or under inspection those, are projects that are going to come on have come online. In, the recent past or will come online in the very near future about 2,000, of those were, either canceled deemed incomplete, or abandoned, either in the land use review or the building permit process and. Then when we look through and figure out how many units are left invested, in the land use review pipeline there's about 5,000 in the building, permit, pipeline, so two separate things land-use review building permit there's also about 5,000, that. Are currently, working their way through the permitting process as well. So. Those are the ones that have fallen out of the. Total and what, we
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