These 6 Cities Are Smarter Than Portland About Housing

If Portland wants to fix its housing crisis, these towns show the way.

In Tokyo, government officials place much fewer restrictions on developers and homeowners. (Marco Verch)

In Portland, housing costs are like the weather: Everybody complains, but nobody does anything about it.

Nearly a year ago, Mayor Ted Wheeler and City Commissioner Chloe Eudaly entered City Hall on platforms promising to tackle Portland's affordable housing shortage. Soon, the City Council will wade into its latest plan.

It looks like treating a heart attack with a Band-Aid.

The program, called the "residential infill project," will receive public hearings next year. Wheeler wants to allow duplexes and granny flats in city neighborhoods set aside for single-family homes. His plan has infuriated neighborhood associations and historic preservationists.

Even if successful, the infill project would barely address Portland's housing shortfall. The city Planning Bureau projects the program would add 4,700 duplexes and triplexes by 2035.

That's a fraction of the 120,000 new units of housing Portland will need over 25 years, according to a 2015 analysis by the regional planning agency Metro.

Wheeler and Eudaly have done other things: They passed a requirement that landlords pay tenants' moving expenses after rent hikes and "no-cause" evictions. They've also tried to speed up the process for issuing construction permits, and they've legalized tiny homes and allowed RVs to park in people's driveways.

Commissioners Chloe Euday and Amanda Fritz, and Mayor Ted Wheeler. (Thomas Teal)

But even the mayor acknowledges his latest plan is insufficient.

"As a stand-alone [plan to increase housing], it wouldn't make a difference," Wheeler says. "It's a small number. It will not solve the problem."

Related: Portland's Laurelhurst neighborhood fights to keep the housing crisis outside its gates.

Portland has to do more—and observers who have watched the crisis deepen say this is no time for half measures.

"In light of our city having declared a housing state of emergency over two years ago, City Hall could be moving a lot faster," says Madeline Kovacs, who coordinates Portland for Everyone, a group advocating land-use reforms and more affordable housing.

"We continue to expect big things out of the mayor, especially since he ran his campaign with the idea of solving the homeless crisis and making housing his No. 1 priority," says Israel Bayer, departing executive director of Street Roots.

If Wheeler wants to do big things, he'll have to look outside Portland. In fact, he'll have to look beyond the West Coast. From Los Angeles to Seattle, housing supply has failed to keep pace with new residents flocking to desirable cities.

Related: Sightline Institute first spotted many of these civic success stories.

"All of our West Coast cities confront severe housing shortages," says Alan Durning, executive director of the Sightline Institute, a Seattle-based think tank. "All of our West Coast cities have political debates that ignore real lessons. The current dialogue ignores places that have built abundant [housing] supplies and do not have rising costs."

Six cities around the globe have tried solutions on a far more ambitious scale. Some are bold, some are small, some are dubious, and others may be impractical. But each of them has demonstrated the kind of outside-the-box thinking that Portland badly needs.

Here they are.

Montreal (Hubert Figuire)


The big idea: Allow more row houses.

Imagine the side-by-side walk-ups you see on Sesame Street. Such buildings flourish in East Coast cities: brownstones in Brooklyn, row houses in Philadelphia, townhouses in Washington, D.C. Houses with shared walls cost less to build and are a more efficient use of space.

In Montreal, row houses abound. "People are much more comfortable living in apartments," says urbanist blogger Simon Vallee, a Quebec native who lives in Montreal. "Montreal is a city of low-rise apartment buildings. They're much cheaper to build than high-rise apartments. You can build it fast, and you can build it cheap."

Montreal is now the second-most densely populated large city in Canada. And average monthly rent last year in the city of Montreal was $658 U.S., according to the latest Canadian census data. The average in the city of Portland is $1,347, according to the city's 2016 State of Housing report.

(Terra DeHart)

How it works:

Percentage of Montreal's housing units in townhouses or apartment buildings that are four stories or less: 75

Percentage of Portland's housing units in townhouses or apartment buildings that are 19 units or less: 25

Montreal (Montreal Maelick)

Would it work in Portland?

Allowing row houses on the scale of Montreal would require massive rezoning. There is no current plan by the City Council to do that.

In Portland neighborhoods, the backlash to residential infill has long been intense.

Related: The history of how old Northwest Portland homes fell, and new row houses burned.

In the 1980s, developer Phil Morford began tearing down old houses in Northwest Portland and replacing them with row houses. The "Morford houses" were greeted with protests and arson.

Opposition today is nonviolent but no less passionate. The Laurelhurst and Eastmoreland neighborhoods are pursuing federal historic designations to block cottage clusters and garden apartments in single-family neighborhoods. "We believe [infill] does nothing to address our near complete lack affordable housing, which has risen to the level of humanitarian crisis," reads an online petition from the Multnomah Neighborhood Association.

Imagine the complaints about parking if row houses were to go in next door.

Wheeler says: "No. No. I wouldn't advocate that for neighborhoods,
because we don't have to do that yet. Fifty years from now, it might be
a different story."

Tokyo (Kevin Dooley)


The big idea: Massively increase building heights downtown.

In Tokyo, government officials place much fewer restrictions on developers and homeowners. And Tokyo has been able to keep housing prices in check. It costs 4.7 years of the median annual salary to purchase the average home in Tokyo. In Portland, that number is 5.5 years, according to the Demographia International Housing Affordability Survey.

For decades, Tokyo was a low-slung city, much like Portland. But unlike Portland, property owners can tear down old houses as they please. And in recent decades, Tokyo has eased its rules in some trendy downtown districts to allow for much taller skyscrapers.

"Tokyo is fascinating place," says Daniel Kaven, a Portland architect. "They're really vertically developed. You can go into a tall building, go up 10 floors and there's a restaurant."

(Terra DeHart)

How it works:

Tallest residential towers currently planned for Tokyo: Two 770-foot-tall, 65-story apartment buildings in Shinjuku's business district. They'll replace 1,000 housing units with 3,200 new apartments on a 12-acre lot.

The height of Portland's biggest planned residential development: 400 feet at the U.S. Post Office site, where 2,400 apartments are planned on 24 acres.

Camden’s Blue Star donuts Tokyo (Taro Shinozuka)

Would it work in Portland?

The maximum height limit in Portland is 460 feet. That's a lower height limit than in any other major West Coast city. Seattle, San Francisco and Los Angeles all have buildings in the works that will rise higher than 1,000 feet.

Because the Portland area, unlike most other parts of the U.S., limits sprawl—the urban growth boundary restricts development outside the boundary—one might think that if you can't grow outwardly, you should grow upward.

Related: Sick of Portland changing? Too bad. Here are 7 places where the city go big.

But height has long been a delicate subject in Portland. Residents get agitated at the thought of apartment buildings blocking their view of Mount Hood.

"Portland is known for its historic vistas, most of which disappear in this plan," said West End resident Wendy Rahm, objecting to Portland's central city plan in September at City Hall.

In the Pearl District, residents oppose an apartment building that could block views of the Fremont Bridge.

"It's an eyesore, and it's problematic for a lot of people," said board member Ed O'Rourke of the Pearl District Neighborhood Association in the NW Examiner. "I'm in the north end of the Pearl for one reason, and that's the view."

Kaven, the architect, recently floated constructing the West Coast's tallest building at the Post Office site in the Pearl. The idea wasn't taken seriously at City Hall—because it would be 50 stories taller than the cap allows.

But pressure to go higher is getting some traction in Portland. In October, developers proposed a 400-foot tower along the South Waterfront, designed with help from internationally renowned Japanese architect Kengo Kuma. The project's investors, Portland-based NBP Capital, have asked City Hall to raise the height limit along the waterfront.

Related: A Portland developer dangles the prospect of 500 affordable apartments—in exchange for the right to build high.

Wheeler says: "If price is your only consideration, height is a great strategy." Wheeler has said he favors height increases along transit corridors and in the central city, but said he'd take a wait-and-see approach to the Post Office site.

He has no appetite for eliminating all height caps: "You could put it under livability. We get feedback from everything from view corridors to shadows on public spaces and appropriate levels of density."

Pittsburgh (David Brossard)


The big idea: Tax land to spur development.

As a general matter, property taxes are based on the value of land and the buildings on it, in equal measure. But in Pittsburgh, one of the early and few American cities to adopt a "land value tax," property taxes were heavily weighted toward the value of the land over the improvements on the land. This taxing system nudges owners of vacant lots or underdeveloped property to build and build sooner.

In short, a vacant property became a tax burden: It produces no revenue (or, in the case of a parking lot, little revenue) but is taxed as if it did. So the owner is spurred to build or sell.

"It incentivizes more intense development and takes pressure off the urban growth boundary," says Tom Gihring of Common Ground OR-WA, which has long advocated a land value tax.

In one of the most definitive studies of the subject, a 1997 article in the National Tax Journal, Pittsburgh, which ultimately repealed its citywide land value tax in 2000, saw a 70 percent increase in building permits in the decade following the adoption of the land value tax as a vast majority of similar Rust Belt cities without such a tax saw dramatic declines in permits.

(Terra DeHart)

How it works:

Property tax paid by the owners of a 10,000-square-foot vacant lot on Portland's Northeast Alberta Street: $469

Estimated tax the owners would pay under a system like Pittsburgh's: Upwards of $25,000

Urban Cities City Pittsburgh Pennsylvania Pnc Park (Max Pixel)

Would it work in Portland?

If there's anything Portland hates more than skyscrapers, it's a wasteland of parking.

Portland could call this plan the Goodman tax. The Goodman family is among the largest land owners in the central city. Roughly 5 of their acres consist mostly of parking lots, which they have just begun to develop.

"It's flipping the script on how the property tax works," says Joshua Vincent of the Philadelphia-based Center for the Study of Economics, noting that regular tax structures have perverse incentives. "If you do the right thing, if you build affordable housing, you are putting a lot of money and providing housing, you're going to be punished by really high taxes. We reward the vacant lots."

Wheeler says: "It's really interesting what [Pittsburgh] is trying to do—put the tax on the land, not on the construction. You want to discourage large landholdings in your central core that don't have housing. It makes really good sense from the logic perspective.

"Now the reality check: I've been advocating for property tax reform for how long? The chances of a complete radical reframe of the property tax system in Oregon is somewhere between zero and zero."

The French Quarter (Jason Paris)

New Orleans

The big idea: Ban Airbnb, at least in some neighborhoods.

In 2016, New Orleans legalized the short-term rental marketplace Airbnb, just like Portland did two years previously. But New Orleans kept a ban on short-term rentals in one part of the city, the French Quarter, where the city wanted to retain the historic character and longtime residents in its most iconic neighborhood. Before then, short-term rentals had flourished illegally in the French Quarter.

"They've done a great job of enforcing the ban in the French Quarter," says Meg Lousteau of Vieux Carré Property Owners, Residents and Associates. "The impact of the ban has been hundreds of housing units are being returned to the market as actual units. Those are options for people who live here."

New Orleans has a powerful hotel industry, which lobbied for the Airbnb crackdown. But it is also keenly aware of how hard it is to pay rent in a city where median incomes are in decline.

And it isn't the only city to place restrictions on Airbnb. New York City has simply banned renting out entire apartments in large buildings.

(Terra DeHart)

How it works:

Area of New Orleans where Airbnb is banned: Most of the French Quarter, roughly 423 acres.

That's roughly the size of Laurelhurst or the King neighborhood.

French Quarter, New Orleans (Max Pixel)

Would it work in Portland?

A recent estimate shows short-term rentals remove up to 1,391 units from the city's housing market, according to June 2017 data from Inside Airbnb, an industry watchdog.

Portland has struggled to regulate Airbnb. The city has rules for short-term rentals, but Airbnb hasn't agreed to ban scofflaws from its website or hand over addresses of homes being rented out.

Related: Portland's short-term rental rules are such a joke that an Airbnb employee ignored them.

Portland doesn't have one particular tourist destination where Airbnb is wreaking outsized havoc. But New Orleans provides a useful model of what might happen if Portland took enforcement seriously: More apartments would go back on the market.

Airbnb spokeswoman Laura Rillos says the company has voluntarily removed 500 illicit listings—but is open to further discussions with City Hall about reforms.

Wheeler says: "I'm not prepared to do that. But as Airbnb grows, we reserve
the right to regulate."

Singapore (Brian Jeffery Beggerly)


The big idea: Increase public housing dramatically.

This is Portland—a leftist hotbed. What if we bypassed capitalism altogether?

In Singapore, 80 percent of the housing is developed by the government.
The small, autocratic nation-state builds the housing and sets the prices, sells homes and condos to citizens, and places heavy restrictions to limit real estate speculation.

"On average, buyers can expect to use less than a quarter of their monthly household income to pay for the mortgage installment of their first flat, a figure lower than the international benchmarks for affordable housing," says the Singapore government's Housing and Development Board.

The price of an average home is 4.8 times the average annual income, according to the Demographia International Housing Affordability Survey. That's in line with Tokyo, and cheaper than Portland.

(Terra DeHart)

How it works:

Percentage of Singapore residents who live in public housing: 80 percent

Percentage of Portland residents who lived in some kind of public housing or publicly subsidized housing in 2015: 8 percent

Singapore (Nicolas Lannuzel)

Would it work in Portland?

There's certainly political will for some public housing: Portlanders passed a $258 million housing bond last November to subsidize apartments for people who can't pay market rates.

And to be sure, affordable housing advocates are fans. "We cannot begin to climb out of this crisis without securing large-scale investments in deeply affordable housing," says Kari Lyons, director of the Welcome Home Coalition, which advocated for the housing bond.

"Public housing is an infrastructure that we should think about just like our roads and bridges and our parks to have a healthy society," says Street Roots' Bayer.

That said, public housing represents 8 percent of the living units in the city right now. It's hard to imagine that number growing by more than a few percentage points.

Wheeler says: "It's a completely different form of government. They built
tall and they built dense, and that's what we're trying to do in the central city. We should be building more public housing."

Marina City skyscrapers, Chicago (Mattchobbs, Wikimedia Commons)


The big idea: Cut red tape.

By speeding up the permitting process, it takes Chicago as little as 90 days to approve building permits for high-rises, according to city figures. Part of Chicago's process is overseen by private contractors. In Portland, it's at least seven months. Neither figure takes into account the design review process, which is far less onerous in Chicago—as little as two months, according to a consultant.

Greater central Chicago grew the number of housing units by 50 percent between 2000 and 2010, according to Daniel Kay Hertz, senior policy analyst at the Chicago's Center for Tax and Budget Accountability, and in one neighborhood, South Loop, condo prices didn't keep pace with inflation.

(Terra DeHart)

How it works:

Standard time for a high-rise building to be permitted in Chicago: 5+ months

Standard time for a high-rise building to go through design review and permitting in Portland: 12 to 18 months

Chicago (Walter Lesus / Flickr)

Would it work in Portland?

Everyone agrees Portland's permit system is slow: politicians, architects and, of course, developers.

Jeff Smith, founder of J.T. Smith Companies, told the Portland Tribune last month he would no longer build in the city. The reason: He's waited more than two years for various city bureaus to approve new lot lines in East Portland. (Bureau of Development Services officials say some delays are J.T. Smith's fault.)

"It takes less time to change the Oregon state constitution," says another builder.

BDS director Rebecca Esau says Portland differs from Chicago because state law gives neighborhood a say on design. "That does add time to the process," says Esau, "but it also helps enrich the process."

If no one disagrees the system is broken, they can't agree why: whether it's finding qualified employees in the midst of a housing boom or years of bureau mismanagement. Eudaly, who now oversees the bureau, says she's made some reforms and is trying to get city bureaus to work together. "Unfortunately, our form of city government doesn't encourage cooperation," she adds.

Wheeler says: He wants reforms. "Time is money for developers. The longer their permit stays hung up in the bureaucracy, the more risk there is the project will never be started."

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