There are some hotly contested debates going on in Portland surrounding development of new homes.  There are historical preservation groups like Restore Oregon that don’t like the the infill development and movement towards density within the city.  They hope to preserve the city as it is and save architecturally significant homes and buildings.  Which we believe is a noble cause.

These groups, and their supporters feel that everywhere you turn in the inner core of the city there are new homes popping up and older homes being torn down.  The fear is that the charm of Portland’s urban neighborhoods will soon be lost if the trend continues.  Builder’s and developers are being demonized as money hungry land hogs only out for a quick buck.  Often times tearing down an under maintained older home in place of 2 or 3 new larger homes.

A Need For More Housing

The question becomes is there a need for all of this new housing?  And if so, how do we accommodate the growing population that is relocating to Portland?

In a recent article from the Oregonian titled “Is Portland building enough new homes? Not to keep up with population analysis suggest,” have suggested that we are falling behind the demand for new housing.  But why did this happen?

During the downturn of the housing market, financing for land and building dried up and lenders have been very conservative in their efforts to jump back in.  The suburbs have been most effected by this.  Lead times on developing of large plots of land are often 1-3 years.  And since development had completely stopped during the down turn, we have fallen behind in the production of new housing.

So what about all of that over developed inventory that flooded the market during the housing downturn?

Believe it or not, as compared to other major cities nationally, Portland did not have a huge overbuild of new homes during the housing boom.  This insulated us from a worse crash than we saw when the bubble burst.  However it is causing issues of a different kind now, a housing shortage.

Study Shows People Are Relocating To Portland 

The Oregon Office of Economic Analysis is in the middle of a 4 part series on Portland housing and in part 2 they discuss Construction & Demographics.

Their findings indicate an acceleration in housing demand. Even as household formation has slowed nationally, it appears to be picking up in Oregon. As the economy continues to improve there is evidence of strong flows of relocation to Oregon, and Portland in particular.

The study shows that the largest demographic for this insurgence of people relocating to the city are well educated millennials and gen-Xers who want to live in the urban core.  They are moving to Portland Oregon for the laid back, food centric, emphasis on sustainable living, culture.

So as more and more of these urban dwellers migrate to the inner neighborhoods, prices rise and inventories fall.  Causing a housing shortage.

Could this be why city planners are pushing density within the inner core?  Maybe they trying to keep up with the demand. Maybe they trying to provide more affordable options for the young, not ready to move to the burbs, demographic?

Honestly, I cant blame the builder’s who are capitalizing on this demand.  The lead time on infill lots are much shorter and the speculative risk is smaller.

Solutions For The Housing Shortage

However this type of building doesn’t really solve the housing supply problem entirely.  There is only so many double lots that can be developed and only so many areas for new condos or apartments.  Unless the city allows and subsidizes, the leveling of entire city blocks and starts building high-rises, the system will stay broken.

Obviously the city is not going to start displacing residents in favor of high-rises, so what is the alternative?

How about take the urban setting to where the land is available.  Why can’t we build more Orenco Station type developments?  Let’s expand more urban villages to the suburbs!  If Portland can turn a wasteland of abandoned warehouses into the thriving Pearl District, we can surely create something great in our suburbs.

Urban Villages In The Suburbs

There are tons of opportunities for urban villages in the suburbs, but how do we make Tigard, Sherwood, Beaverton and Hillsboro attractive to the urban minded hipsters?  That’s a great question!  What if we started with a higher standard for building reviews for Washington County.  What if we incentivized builder’s to get creative and build a more diverse product.  What if our best creatives got excited about living in and creating for our suburbs.

I have seen some small 10-30 lot subdivisions of quality vintage homes scattered across the burbs and they seem to sell really well.  Imagine if the powers that be, didn’t allow national builder’s to come in and build a cookie cutter product and instead promoted the quality replication of the inner core?  Would it be so bad if Hillsboro became to Portland what San Jose is to San Francisco?

If Portlander’s don’t want infill building in our historic neighborhoods, lets work together to provide awesome alternatives elsewhere and make sure we have ample supply for the right demographic of buyers moving to Portland Oregon.