Big picture overview of Portland's housing and economic outlook. Includes historical data on SW Portland's development, and the City of Portland's infill proposal.

1. Southwest Portland and
the Housing Trilemma
Josh Lehner
April 2018

2. Portland Region
Overview

3. No Such Thing as High-Cost
Region that Builds Housing
Original Chart Idea Borrowed from Jed Kolko, then at Trulia

4. Affordability
Quality
of Life
Economic
Strength
Policy
The Housing Trilemma
Cities face tradeoffs in terms of
housing affordability, job availability
and quality of life. Comparing the
100 largest MSAs in the country.
Source: David Albouy, BEA, BLS, Census,
IHS Global Insight, Oregon Office of Economic Analysis
• Youngstown, OH
Detroit, MI •
• Albuquerque, NM
• Omaha, NE
Oklahoma City, OK •
Raleigh, NC •
El Paso, TX •
• Atlanta, GA
• Tampa, FLProvidence, RI •
Sacramento, CA • • Seattle, WA
Portland, OR •
Denver, CO •
Boise, ID •
Austin, TX •
For more: https://oregoneconomicanalysis.com/2016/06/08/the-housing-trilemma/

5. Migration Flows have Returned
• People have been
moving to the
region since below
Lewis & Clark
• Population gains in
recent years match
gains from the
1990s
• Population growth
rates larger in the
1950s, 1960s,
1970s, and 1990s
• Most migrants are
20- and 30-
somethings with
relatively low
incomes. Wealthy
migrants are a
minority.

6. Today’s Growth Discussion

7. No Real Building Boom*
*Except in a Few Neighborhoods
• There has been no real
boom in new construction
relative to population
growth
• Apartment boom
confined to a few select
neighborhoods, or streets
• SE Division
• NW Portland
• Pearl District
• N. Williams/Vancouver
• N. Mississippi
• Underbuilding during and
after Great Recession is
root of today’s issues.
• National problem
among locations with a
growing population,
not just Portland and
Bend
• Lack of available lots
largely driven by lack of
credit for land acquisition,
development and
construction loans a big
driver

8. Need to Keep Building
• If population
forecasts are
reasonably accurate,
need to continue to
build at current rate
to keep up
• To bring better
balance to housing
market we need
more supply
(building) or lower
demand (fewer HH),
which won’t come
until the next
recession when
migration slows
• Note: the spike in
2017 is in part due
to permits being
pulled ahead of the
City of Portland’s
Inclusionary Zoning
policy

9. One Big Problem

10. Portland Trying to Thread the Needle
• Growth in recent
decades results in
pockets of dense
development among
a dormant interior
• Portland very much
fits this pattern, even
as region is better
than typical large
metro and Denver
and Seattle
• If Portland wants to
restrain sprawl, it
cannot also limit
growth within the
UGB
• OTOH, as University
of Oregon economist
Tim Duy says, “The
only thing Oregonians
hate more than
sprawl is density.”
For more: https://www.buildzoom.com/blog/pockets-of-dense-construction-in-a-dormant-suburban-interior

11. How Does SW Portland
Fit Into Region?

12. Defining SW Portland
Census Tracts
SW Portland
SW Portland is Census
Tracts 58, 59, 60.01, 60.02,
61, 62, 63, 64.02, 64.03,
64.04, 65.01, 65.02, 66.01,
66.02, 67.01, 67.02, 68.01,
68.02
Does Not Include All
Residences in Portland with
a SW Address, But Follows
SWNI Reasonably Well

13. SW Portland Over the Years
SW Portland was really developed in the 1950s, 1960s and 1970s. Since then
population has been relatively stable, but still undergone demographic shifts.

14. • Another generation
of young families is
here
• Our little corner in
Hillsdale had 2
children when we
moved in 2009.
Today there are 16
children. 9 of
them are
preschool-age or
younger.
• Also, there are more
empty-nesters as
well
• 16% of
households are 1
person
households aged
55 and older
SW is Home to Young Families

15. SW Portland in Transition
• Strong
school
enrollment
trends in
recent years
in the
Wilson
cluster

16. SW Portland’s Evolution
• Increase in
housing in SW
has been small
in recent
decades,
particularly
outside of the
South
Waterfront
• Overall
construction
activity is
higher due to
remodels,
demolitions,
fires, and the
like

17. +200
+7%
+100
+4%
+100
+7%
+50
+3%
+150
+7%
+150
+5%
+150
+7%
+450
+11%
+50
+6%
+150
+5%
+50
+1%
+2,400
+99%
2000-2016
Growth
Boundaries based on 2010 census tracts, some are individual census tracts, some are 2 or 3 tracts.
Data is Census 2000 and 2012-2016 ACS | Source: Census
• Since 2000, SW
Portland has added
4,000 housing units
• 2,400 in John’s
Landing and South
Waterfront
• 1,600 in the rest of
SW, for an increase
of 6%, or 0.4% per
year
• Overall construction
larger due to
replacements,
demolitions, fires, etc

18. What To Do?
Benefits and Opportunities of the Missing Middle Housing
plus Real Life Examples

19. Portland’s Residential Infill Project
• In my own words
• Allows for Hillsdale-type
development along transit
corridors throughout the city
• Does not force any changes, rather
it removes the ban on missing
middle housing options
• Duplexes and Townhomes
• Human scale density
• Support walkable neighborhoods
• Environmentally friendly
• Better affordability
• Integrated communities have
better economic mobility
• Allows for aging in place
• Results in fewer demolitions due
to size limits on infill
Sign in my office

20. Hillsdale as Leader and Example
From the 1997 Hillsdale Town Center Plan

21. Hillsdale as Leader and Example
From the 1997 Hillsdale Town Center Plan

22. Hillsdale as Leader and Example
From the 1997 Hillsdale Town Center Plan

23. Juxtapose with Whatever the
Opposite of Visionary Is
Adjacent Neighborhood
Association in SW Portland is
soliciting donations on their
homepage to fund a legal
challenge to the City of
Portland’s infill project

24. Townhomes
Duplex, 4-Plex
Detached Single
Family Housing
Apartments
Hillsdale Town Center

25. Townhomes
Duplex, 4-Plex
Detached Single
Family Housing
Apartments
Hillsdale Town Center
Hillsdale has Great Transit Service
4 major bus lines into downtown Portland
that run all day plus 2 commuter bus
lines (1 & 55) plus 2 bus lines up to OHSU

26. Townhomes
Duplex, 4-Plex
Detached Single
Family Housing
Apartments
Hillsdale Town Center
Map of Current Use, Not Zoning

27. Townhomes
Duplex, 4-Plex
Detached Single
Family Housing
Apartments
1
2 3
4
optional
Hillsdale Town Center
Map of Current Use, Not Zoning

28. 1
One older ranch home on a double lot (10,000 sq ft) was demolished
and replaced with two detached single family homes. Standard infill.
Pic: Google Street View August 2011

29. 1
One older ranch home on a double lot (10,000 sq ft) was demolished
and replaced with two detached single family homes. Standard infill.
Pic: Google Street View September 2017

30. $809,922
Sold March 2016
Household Income Needed
$148,000 - $170,000
Share of Portland MSA
Households with this Income
11-15%
$699,900
Sold April 2016
Household Income Needed
$142,000 - $160,000
Share of Portland MSA
Households with this Income
13-16%
Income needed based on mortgage rate at time of sale, property taxes, and homeowners insurance. Costs do not exceed
30% of household income. Ranges based on down payment size of 5% and 20%.

31. 2
One tiny, run-down bungalow on a single lot (5,000 sq ft) was
demolished and replaced with a duplex. *Google Street View Aug 07*

32. 2
One tiny, run-down bungalow on a single lot (5,000 sq ft) was
demolished and replaced with a duplex. *I’m standing in my driveway*

33. $455,000 $454,000
Sold Dec 2015 Sold Feb 2016
Household Income Needed
$90,000 - $102,000
Share of Portland MSA
Households with this Income
29-36%
Income needed based on mortgage rate at time of sale, property taxes, and homeowners insurance. Costs do not exceed
30% of household income. Range based on down payment size of 5% and 20%.

34. 3
One older, run-down single family home on a double lot (10,000 sq ft) was demolished and
replaced with nine townhomes. Directly to the left are 5 townhomes. Across the street
one way are 2 duplexes/townhomes. Across the street the other way is an apartment complex.
Pic: Google Street View January 2016

35. 3
One older, run-down single family home on a double lot (10,000 sq ft) was demolished and
replaced with nine townhomes. Directly to the left are 5 townhomes. Across the street
one way are 2 duplexes/townhomes. Across the street the other way is an apartment complex.

36. Currently Listed For
$450,000 - $495,000
Household Income Needed
$93,000 - $115,000
Share of Portland MSA
Households with this Income
27-37%
Income needed based on current mortgage rate, property taxes of other new townhomes, and homeowners insurance.
Costs do not exceed 30% of household income. Range based on down payment size of 5% and 20%.

37. Vacant One Acre Lot. Zoned R2.5 (one house per 2,500 sq ft). Previous
proposals called for skinny homes and/or townhomes, at times included the
house you can see on the right for a larger parcel overall.
4

38. Neighbor Repeatedly Threatens to Sue using Historical
Covenants Regardless of Current Zoning
Today: No Development and No Plans

39. Bottom Line
• Ongoing economic & population growth
• Accommodate growth
• Sprawl
• Density
• Don’t accommodate growth
• Displacement
• Restrain or choke off economic growth
• To date results mixed at best
• Affordability worse and more dormant neighborhoods
• Affordability set to improve due to business cycle (incomes
rising, rents flattening as apt supply catches up)
• Lower-income households not leaving Portland region
entirely, although being displaced within region
• In some high-cost regions, like CA, lower-income households
are packing up and leaving entirely

40. When NIMBYs Start Talking about Portland’s
Residential Infill Project, I’m Like…
I mean, listen, we’re
talking about townhomes.
Not high rises! Not high
rises! Not high rises! We’re
talking about townhomes.
I mean, how silly is that?
We’re talking about
townhomes, man.

41. Questions and Contact
josh.lehner@gmail.com
Larger Set of Slides and Summary
www.joshlehner.wordpress.com