By David Krogh

In June the Homebuilders Association of Metropolitan Portland (HBA), Metro and the Build Small Coalition hosted a virtual tour of modern middle housing project examples intended to shift the way people think about housing in response to HB 2001.

That bill, which the Oregon State Legislature adopted in 2019, requires cities to plan and implement zoning permitting middle density housing within traditional single-family neighborhoods.

Middle density housing includes duplexes, triplexes, multiplexes, accessory dwelling units (ADUs) and cottage-style homes.

Leading the tour were Oregon State Representative Julie Fahey, Chair of the House Interim Committee on Housing and representatives from Portland area building companies Blue Sky Property Northwest, Green Hammer, Marnella Homes, Portland Houseworks, Roost Homes and SQFT Studios.

This tour video is accessible to the public on YouTube (bit.ly/MiddleHousingTour) and shows a variety of middle home types. Several project examples were illustrated, many located in SE Portland.

Roost Homes illustrated a stand alone ADU which fits into the back yard of an existing house. Another example was a cluster of small homes near the PCC Eastside Campus (Tabor 77, SE 77th Ave. and Sherman Court) which includes a central courtyard shared access way.

Another example is Montavilla Court Condominiums at SE 76th Ave and Alder St., a small townhouse complex (units of 800-1,000 square feet per unit) arranged in a cluster around a central landscaped courtyard.

In all cases, the units are small and energy efficient and according to the participating builders, all are available at market rates with town homes being available for sale or for potential rentals. Builders stressed that keeping the units small is one way to keep costs down.

Eli Green with SQFT Studios expressed a goal to “make small spaces more functional, including such unique features as lofts.”

Another way is to not provide onsite parking. Blue Sky representative Douglas MacLeod said, “parking drives up the costs and reduces flexibility.” Other builders echoed that, although most buyers would like onsite parking, it usually doesn’t pencil out for builders or buyers.     

The Southeast Examiner participated in the tour as did close to 200 other area participants.

State Representative Fahey was asked if the bill included provisions to guarantee affordability. Fahey responded that no, affordability was not built into the bill. However, it was hoped that by providing a large number of new units, prices would become more affordable than at current price levels.

The Southeast Examiner asked if any of these builders were going to seek the bonuses potentially offered by Portland’s just adopted Residential Infill Project (RIP) to make some units “affordable.”

Rebecca Small with Metro responded,

“The Deeper Affordability Bonus (per RIP) is geared towards non-profit affordable housing developers and community development corporations (like Habitat for Humanity or REACH) rather than private developers,” she said, “since producing units affordable at 60 percent or below MFI (median family income) still requires a significant public subsidy to pencil out.”

This means most middle housing will not be constructed as “affordable housing” by commercial builders.

What is affordable housing? Basically, it is housing that a household can pay for and still have adequate money left over for other necessities such as food, transportation, clothing and healthcare.

The federal Housing and Urban Development Agency (HUD) generally calls housing affordable if it costs no more than 30 percent of a household’s income (considering monthly rent/payments). However, since household incomes are extremely variable, affordability is not something one can realistically pin a particular value on.

For informational purposes, the US Census identifies Portland’s median household income in 2018 at $65,740. This averages out to one person earning wages at roughly $31 per hour or two people at $15+ per hour. This median has been increasing steadily over the years largely due to the influx of professional workers into the area.

This is one of the reasons why finding affordable housing is so difficult in Portland for those in lower wage brackets.

After the tour The Southeast Examiner asked what the estimates are for needed units versus how many units builders are capable of providing (in terms of middle housing).

Small responded.

“One recent study by Up for Growth showed that we under produced over 155,000 units of housing since the great recession. Between 2010 and 2016, Multnomah County saw only 59 units of new housing for every 100 new households formed. This means that every 10 new families were competing for a mere six units of housing!”

It should be noted that these housing totals include all unit types, including apartments, and that since 2016 there has been substantial construction of new apartment buildings in SE Portland.

What is needed is more variety in available unit types and not just more apartments, which both HB 2001 and the RIP have largely attempted to provide.

In middle housing projections, Johnson Economics projected for the Portland Planning and Sustainability Bureau (PSB) that there is a possibility of 24,000 middle housing-style units being built over the next 20 years, or about 1,200 new units per year.

Another study, more recently released by PSB indicates that value could be as low as 4,000 units. Most of this development is expected to be constructed on currently vacant or infill lots.

Small said, “It is expected that the majority of middle housing, particularly types that require use of an entire property such as triplexes or cottage clusters, will only come to fruition on vacant lots since redevelopment is extremely costly and presents a whole host of challenges.

“But many other middle housing styles, such as detached duplexes, single family home conversations and accessory dwelling units, can be easily incorporated into existing single-family home properties without requiring the destruction of the original structure.”

Several other facts became available as part of the tour and subsequent questions. For instance, no builders of color and few women are currently involved in middle housing construction. It is especially hoped by Metro that this situation will improve based on the current high demand for housing and growing opportunities within the housing industry.

In addition, no projects are being built at this time considering the needs of residents to maintain social distancing, a key function in limiting the spread of COVID-19, due to an assumption that the pandemic will be resolved soon.

Many projects actually have common or central areas for socializing, but since units tend to be smallish and yard areas are small to nonexistent, outdoor private areas and landscaping are often not provided or only minimally included within many of these projects.

This may constitute a new normal for living units in order for Portland to increase its housing density to comply with the middle housing standards of HB 2001.

Photo of ADU by Roost Homes