Portland’s residential infill project still has major flaws, housing advocates say

A new economic analysis shows the current proposal would only create 86 net new homes per year.

by Michael Andersen | April 20, 2018

The current proposal would block homes like this below-market-rate triplex in the Vernon neighborhood, built in 2016 by nonprofit developer PCRI. In most of the city, each of these three 1,465-square-foot homes would be 47 percent too big to exist on the same lot. (Photo: PCRI)

Through two years of deliberation, Portland’s anti-McMansion residential infill project has been built on a simple compromise for lower-density residential areas: cap the size of new buildings, but also increase the total number of homes by re-legalizing duplexes and corner triplexes.

But as the project nears completion — it comes before the city planning commission on May 8 and 15, after which they’ll make a final recommendation to city council — some housing advocates are saying the plan’s fine print isn’t living up to its stated goals.

Here’s the gist of their complaint: Sure, you can re-legalize duplexes and other “missing middle” homes. But that means nothing if small homes on shared lots become financially impossible to build because of new rules you’re creating at the same time.

“This will only actually allow increased density on a tiny additional fraction of our city,” housing advocate Holly Balcom wrote April 4. “Most of the pages of the proposal are restrictions on height, setback, etc. Reducing possible development rather than increasing options. I’ve watched every draft become more and more restrictive.”

According to a new city-commissioned economic study of the current proposal, Balcom is right: The chance of creating more than a pittance of “missing middle” housing under this set of rules is grim.

We’re going to have to get a little technical here.

Below is a key table from the new study. It compares four ways to develop a piece of land: a freestanding home, two homes on “skinny” lots, a duplex and a triplex.

The table considers each of those options in two legal situations. “Current zoning assumptions” means the status quo, where there is essentially no cap on building size. “New zoning assumptions” means a scenario after the residential infill project has capped the size of new buildings but re-legalized midblock duplexes and corner triplexes.

Now check out the four cells in the lower right, labeled “RPV/SF.” They represent the value per square foot of land that new housing on that land could create after the proposed reform. The higher the number, the more likely a project becomes:

According to these rough calculations, the likeliest redevelopment outcome under the residential infill project would be a pair of homes on skinny lots — an option that isn’t currently legal on most lots and would become legal on even fewer under the current proposal. So that one wouldn’t happen much.

The second likeliest outcome would be a 2,500 square foot duplex, but not by a wide margin — at $28.91 per square foot, it’s only 11 percent more viable than a freestanding 2,500 square foot house. (And each half of the newly built duplex, it’s worth noting, would need to sell for $375,000 — cheaper than anything being built today, but not exactly cheap.)

Slightly less likely than a freestanding house would be a triplex, which under the current infill proposal would become legal in the common “R5” zone — that is, on most of the city’s residential land — on corner lots only. So triplexes like this one would be neither economically viable nor generally legal:

A 2,500-square-foot triplex. Image: Courtney Ferris.

To restate the above: according to its own analysis, Portland is about to overhaul its entire low-density zoning code to legalize small homes, and then make it financially unlikely that a meaningful number of smaller homes would get built.

(It’s worth noting that Johnson’s calculations assume that two exceptions to the proposed size cap, described here by infill opponents — not-quite-daylight basements and low finished attics — either get removed or are economically meaningless. Maybe those exceptions should be removed, at least for one-unit homes! The city needs to address this issue, and hasn’t.)

There’s another problem: According to these figures, by far the likeliest thing that would happen to any given property under the current proposal is nothing.

That’s because even the “skinny lot” scenario can pay only $32 per square foot, or $160,000, for a 5,000 square foot lot. Unless you could find a 5,000 square foot lot anywhere in Portland for $160,000, nothing would happen at all. The new size cap would effectively prevent nearly all redevelopment.

To be sure, there’s nothing inherently good about redevelopment. At other moments in Portland’s history, preventing redevelopment might be fine.

But Portland is booming. Only seven of the country’s 50 largest metros have been adding jobs faster. Homeownership in most of Portland is already out of reach for 58 percent of Portlanders, including a vast majority of Portlanders of color.

According to Johnson, the net impact of the infill project on Portland’s housing count would be 86 extra homes for each of the next 20 years.

Portland needs more small homes than that — and if it’s going to get them, they need to be more than just legal. They need to actually get built.

Four steps to a more pro-housing residential infill project

The below-market-rate triplex at the top of this post under construction. Its density comes not from looming over the area but simply by putting three mid-size homes right next to each other. The current infill draft would illegalize this. (Image: Google Street View)

So what could help more small homes get built?

And even better, what could the project do to help low-income Portlanders in particular?

In 2016, I wrote that duplexes are mostly about housing affordability for the middle class, and that Portland’s residential infill project as proposed wouldn’t do much for low-income Portlanders.

Some opponents of the project seized on those words to claim that the project was fundamentally flawed, without mentioning the 1,200 words that followed: all ways to make the project better and avoid preserving the even more flawed status quo.

Two years later, Portland still has the same basic set of options for making its residential infill project better. The Portland for Everyone coalition has been saying all these things for months.

1) Let buildings with MORE homes be bigger than buildings with fewer homes

Here is a simple way to get more small homes built in Portland: let buildings get a little bigger for each additional home they contain.

Each home in a triplex would still be smaller, and therefore cheaper, than each home in a duplex, which would be smaller and cheaper than one-unit homes. But it should be fine for a triplex to be a bit bigger than a duplex, and for a duplex to be a bit bigger than a one-unit home.

The proposed 30-foot cap on height, meanwhile — measured from the lowest point on the lot to the average roof height — could still prevent three-story buildings.

This is the way to end wasteful and widely unpopular 1:1 demolitions. According to Johnson, the current infill proposal would not.

2) Let buildings with CHEAPER homes be bigger than buildings with expensive homes

Portland has inclusionary housing for its busy corridors. It should have inclusionary housing for its quiet neighborhoods too.

One key to making this work is the four-plex.

Because they split the cost of Portland’s increasingly expensive land four ways, four-plexes could bring more new home prices beneath the magic number of $250,000 — the point at which nonprofits like Habitat for Humanity and Proud Ground can team up to help a lower-income household own a modest family-size home.

The current infill proposal gestures in this direction, allowing a corner triplex to reach a total of about 3,000 square feet of building, plus an attached ADU, on a corner lot if at least one of the homes is affordable to lower-middle income people. But that allows only 733 square feet per home on average — not much space for a family.

Just 500 extra square feet of space “doesn’t get you anywhere,” said Travis Phillips, director of housing development for the affordable-housing nonprofit Portland Community Reinvestment Initiatives.

3) Apply its benefits everywhere, not just west of I-205

Duplexes and corner triplexes would become legal only in the yellow area, even though building sizes would be capped everywhere.

It’s good that city officials are aware of the risk that residential infill can trigger site-specific housing displacement. Even in luxury-zoned areas where homes without yards and driveways are forbidden, there’s plenty of rental housing, some of it with low-income residents.

Unfortunately, the city’s current plan for dealing with this is mostly just to drop a line on a map, as if all of Portland’s vulnerable residents live on one side and not on the other.

What’s more, although new missing-middle housing would still be banned outside the “housing options overlay zone,” new building sizes would be capped … a change that would tend to reduce East Portland property values without any offsetting benefit in the number of homes that could be built.

In its comments on the city’s previous, and very similar, draft proposal, the Anti-Displacement PDX coalition did not like this approach:

BPS’ analysis of the displacement risk posed by the RIP consists of a map showing where low-income renters of single-family homes are concentrated, and the sole proposed mitigation measure is to exclude those geographies from the “housing opportunity” zone altogether. While we agree that renters of single-family homes may be at increased risk of displacement in the short-term (due to increased incentive for their landlords to redevelop or sell their properties), we do not agree that only those living in certain neighborhoods are deserving of protection from displacement. Nor do we agree that excluding these neighborhoods from the housing opportunity zone is an appropriate response to the potential displacement risk.
Increased housing opportunity is needed in all neighborhoods in order to reduce upward pressure on housing costs and rents, and to provide access to walkable, amenity-rich neighborhoods. Attempting to reduce displacement pressure in the short-term using a tool that limits housing opportunity and exacerbates spatial disparities in the long-term is counterproductive.

Instead, ADPDX recommended requiring that any property owner looking to redevelop should have to pay into a housing affordability fund or offer at least one below-market-rate unit … measures that, combined with the higher unit counts ADPDX also supports, would create income-integrated housing citywide.

Nick Sauvie, executive director of the nonprofit affordable-housing developer ROSE Community Development in outer Southeast Portland, offered an even blunter summary in an interview last week.

“I really strongly believe that they should apply this citywide,” he said. “Basically their exemption of East Portland will leave a bunch of crappy housing there. … East Portland is excluded from this, but there is no real plan for how these neighborhoods develop.”

Diane Linn, executive director of Proud Ground, said Monday that a recent meeting of nonprofit affordable-housing developers about the latest infill proposal had ended with a unanimous consensus: “Don’t downzone any part of Portland, especially East Portland. … That would be the wrong direction.”

4) Stop prioritizing parking over housing

The latest proposal waives on-site parking requirements for duplexes and triplexes inside the “overlay” area. That’s good.

But why should a city facing a housing shortage — and desperately trying to help prevent catastrophic climate change within the lifetimes of our children— require car storage on any lot at all?

This would not prevent anyone from having a garage or driveway on their property. But there is no good reason for the city to force people to have car storage if they prefer to save money by owning fewer cars, or simply by parking in the street.

Two weeks ago, I asked city project manager Morgan Tracy — typically very communicative about the residential infill project — to justify mandatory on-site parking anywhere in Portland. He has yet to respond.

There’s still time to fix all of this

Portland’s city council will vote on project details in the fall, but first it goes before the Planning and Sustainability Commission in May.

Until now, balancing all these details has been mostly in the hands of Tracy, his colleagues and his bosses.

Now it’s time for politicians and political appointees to start weighing in. Which means the role of public input is about to get much more important.

The first time to take part is a pair of Planning and Sustainability Commission hearings next month. You can submit testimony online until May 15, and/or testify in person on May 8 and May 15. In addition, Portland for Everyone is hosting happy hours to discuss this at two Lucky Lab locations on Tuesday, May 1 and Thursday, May 3. You’re invited.

Portland for Everyone supports abundant, diverse, affordable housing. This is a reported blog about how to get more of those things. You can follow it on Twitter and Facebook or get new posts by email a few times each month.