Exploring Affordable Housing in NW Portland
Land Use Leadership Initiative participants explore affordable housing policy and developments
On Friday, June 22, the 1000 Friends of Oregon Land Use Leadership Initiative took a dip into the interesting and challenging world of affordable housing. The topic is perennially discussed in Oregon, particularly in the Portland region, as evidenced by a recent Oregonian series on the challenges faced by a region where residents have a very wide range of economic ability and housing is expensive or hard to find in some key areas.
LULI participants observed and discussed two approaches to bringing affordable housing to one such key area: Portland’s Pearl District. Internationally heralded as a livable and largely successful redevelopment of a former railyards and warehouse district, the Pearl has struggled to meet its original vision as a place with room for everyone, including families and those who aren’t as well off.
But the LULI participants visited two places that prove it is possible to build attractive, well-constructed, sustainable, and affordable housing in the Pearl. It takes a bit of creativity, some incentives and assistance from government, and a lot of patience to make it happen. While one of the sites we visited was built by a for-profit company, the other was built by a non-profit. Each has its advantages, and we were pleased to learn about both.
The first site we visited was The Ramona Apartments, on NW 14th and Quimby near the towering Fremont Bridge. Ed McNamara of Turtle Island Development, which built the Ramona, explained how his company sought to create a building that could bring families into the Pearl. To that end, he included a range of housing options, a well-designed playground, and even classroom space (where Portland Public Schools currently operates and early childhood education center).
McNamara noted that many scoffed originally at the idea that families would want to live in the Pearl. Over half of the buildings’ first tenants had children—half of these were single parents. Indeed, altogether there are more kids living in the Ramona (115 at last count) than in any other city block in Portland, McNamara says. McNamara, who carefully tracks his building’s success through surveys and other tools, noted that 40 percent of these first families had come from outside the city of Portland, but many of them work downtown or in the Pearl. Although they may still own cars, have found that they are far less dependent on them now, with good transit and biking options very close by.
McNamara also emphasized his building’s attention to sustainable design, including efforts to reduce energy and water use. By using different systems on different floors, the building’s management has been able to find systems that work well for residents and save a lot of resources and money. For example, whereas the average Portlander uses 82 gallons of water per day, Ramona residents use just 28.
Who lives in the Ramona? Since McNamara’s company (which is for-profit) received subsidies and other public investments, he is required to be very strict about who can live there and how much they can pay. Only families making 60 percent or less of the region’s median family income (adjusted for their family size) are eligible to live in one of the building’s 138 units. McNamara must ensure that these residents pay a total housing cost (rent plus utilities) of no more than 30 percent of their income. He says he currently charges well less than this maximum. These restrictions are in place for 60 years.
McNamara described the many high-quality features of each unit, including highly soundproofed walls and windows, ventilation systems that provide healthy air, granite countertops and high-efficiency appliances in the kitchen, and a design that helps every apartment feel more spacious. His goal, he said, was to achieve a low rate of turnover, since that is very expensive for apartment managers. So far, he has succeeded, and word has spread: the building has over 200 people on its waitlist.
McNamara was clear: it takes subsidies to make developments like the Ramona possible, because the rate he is charging is far, far less than what the market can bear in a desirable neighborhood like the Pearl, and most private lenders won’t provide financing for a development charging so little. So to get the project built, he depended on a public loan based on a tax-exempt bond, an urban renewal loan from the City of Portland, and private investors who receive a tax credit. Building a great building isn’t cheap, he said, but it’s a good investment for the City. “We will pay this loan back,” he said, and the entire city will benefit from a more diverse and livable Pearl District. In the end, McNamara said, both his company and the city will succeed with the right policy tools and investments.
REACH: Station Place Tower
Our group next walked several blocks to the 14-story Station Place Tower, an attractive and noticeable building on Lovejoy Street at the west end of the Broadway Bridge. Station Place is a differs from the Ramona in two key ways: the organization that built and manages it, and the population it serves.
Station Place Tower was built by REACH Community Development, a Portland-based nonprofit founded in 1982. Executive Director Dee Walsh, who has been working with REACH for much of that history, described how REACH worked hard from the beginning of the Pearl’s conception to fight for including affordable housing in the vision. Today, REACH has built and manages scores of developments of many types, all around the Portland region, with a focus on transit-oriented and sustainable development. Walsh, like McNamara, disputed the notion that housing can’t been green and affordable at the same time. Indeed, the organization is building the nation’s first passive affordable housing in Hillsboro near Orenco Station, and she is confident the project will succeed.
Where the Ramona targeted families and young people, The 176-unit Station Place Tower is solely for seniors—what Walsh teasingly calls “youthful seniors,” those 55 and over. The building is for mixed income, with 76 units for people earning earning 30 percent or less of the region’s median family income, 81 for people below 50%, and 19 for people below 80% of median income. The building is designed to contain many elements of the community that seniors desire, including a large community and arts room, a library, a computer lab, and many activities for residents.
The building took a great deal of collaboration between the Portland Development Commission, REACH, and private partners to construct. Although the original vision included a never-built grocery store on the ground floor, the building is well connected to transit, and within walking distance of many amenities and services (the building’s website proudly proclaims its WalkScore of 88). REACH also depended on loans and subsidies from the public sector to finance the building’s construction.
From the 14th floor garden of the building, where an expansive view of the city’s busy riverfront and bridges opened before a well-tended garden, it was easy to see that Station Place Tower is a beautiful and livable place, far from some common misconception of “affordable housing.” Indeed, as one resident pointed out to our group, “I have the same views as the millionaires down the street!”
Challenges and Future Directions
Both Walsh and McNamara emphasized that the affordable housing mission works best when there are actors of various types involved, including public agencies, private investors, for-profit builders, and non-profit housing providers and managers. (Indeed, McNamara himself has been on both sides of the issue; he was once Executive Director of REACH.) But it will take continued commitment and determined policy choices on the part of leaders and taxpayers to ensure that the region’s housing supply reflects the region’s income distribution. Neighborhoods that do will be more lively, stable, and livable, but it won’t happen by accident. “You’re doing more than just building a building,” McNamara says.
Another challenge that both mentioned is the “doughnut hole” of middle class families, those earning between 60 percent and 120 percent of median family income. There are little to no affordable housing programs that reach this group, and most still can’t afford to live in a place like the Pearl without some assistance—particularly families. The result is a neighborhood that can only accommodate the wealthy or very poor, which isn’t the mix that policy makers and the community as whole desire.
The group discussed tools that could assist with this problem, such as inclusionary zoning, which would require developers to include a certain number of below-market units in any housing development, sometimes in exchange for added density or other incentives. It is currently illegal for any Oregon city to have such rules; however, many groups are organizing to overturn this law.
Finally, Walsh noted that many of the tools she has for creating affordable housing in urban areas aren’t available in suburban or rural areas—places where affordability is still a problem for many, especially when transportation costs are included in the equation. She also noted that affordable housing can still often carries a stigma in these places, even when it is attractively built and competently managed, as REACH’s projects are.
If there was a single lesson from our afternoon tour, it was this: Breaking down the barriers to affordability, and creating the kinds of neighborhoods with a mix of incomes and family types, takes a great deal of effort and creativity from intelligent and competent builders, managers, and policy makers. The results, when done right, can be extremely attractive—places that could fetch a good price at market level, that many would not even recognize as “affordable housing.” But we have a long way to go in Oregon, and new or updated tools may be necessary to keep us on the path envisioned by Oregon leaders for several decades.