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All said and done at the Dekum Charles Condos, it's 'largely a very philanthropic venture'

This article has been updated from its original version.

It's well known that in some close-in neighborhoods such as Nob Hill and Eastmoreland with historical architecture, single-family homes have been razed to make room for denser living styles — to the dismay of some neighboring homeowners, who lose out on beautiful aesthetics as well as potential property value.

But in Woodlawn, a husband-and-wife development team created four condos from an 1890s Victorian-style house renovation, increasing inner Portland's density sans angering neighbors with a historical demolition.

Located at 6817 N.E. Seventh Ave., the Dekum Charles Condominiums in the historic Woodlawn neighborhood are now for sale — and one unit is already bought.SUBMITTED: WOODSONG PROPERTY RENOVATION PARTNERS - The renovation of this 1890s Victorian house ultimately cost a total of $1.6 million.

It's the first project for small business Woodsong Property Renovation Partners, a spousal team. The new condos are fully renovated and brought up to modern-day code, the original yard intact — with an added bike shed. The team has its second project in the works in Southeast Portland, a 1906 Craftsman.

"It's a prototype, maybe a template or proof of concept, so it's definitely unique," developer Garlynn Woodsong told the Business Tribune. "We've taken a lot of lessons and one question we have is whether it's worth it to save the structure, or whether you could get to the same place via deconstruction and new construction for less money and less time."

The units are approximately 1,000 square feet each, and three have two bedrooms while the fourth unit has three bedrooms. They're on the market in the $382,000-399,000 range.

"They're not quite done yet, so we're sort of reserving judgement until we close the books and see the bottom line on just what the damage is," Woodsong said. "We're also keeping an eye on what the City's doing next and whether they will take steps to improve or reform, or whether it's going to be just as dysfunctional a BDS as ever going forward."

Woodsong and his development partner Carrie Wennington have been back in Portland for five years now.

"We kind of modeled it after a few years we lived in San Francisco," said developer Carrie Wenninger, Woodsong's partner. "A lot of old Victorians are broken up into flats that way. They work really well: San Francisco has a lot of that kind of housing. It's no longer affordable there, but I think there's a lot of possibility for that here in Portland."

She and Woodsong started the company in July 2014 before they purchased the property.

"We saw an opportunity in Portland, it's such a great city," Wenninger said. "We were living in California at the time, but really my partner's from Portland and when we had a child we really wanted to be up here closer to family in a slower-paced environment."

So, they moved and Woodsong worked remotely for his former, Berkeley-based firm until they asked him to move back.

"He said no. We wanted him to have the opportunity to do that kind of real-world work here in Portland, instead of going back to school to get a Master's in city planning," Wenninger said.

They bought the Dekum property three years ago in January, and have only recently completed it due to complications as an emerging small business, kerfuffles over permitting and access to laborers.

"We're just hearing a lot from people in Portland about not demolishing old homes, and seeing if there's a way to save them," Wenninger said. "I will say after having done it, it's largely a very philanthropic venture."

Renovation

"We did a lot more to it in terms of digging out the basement to create a lower unit, lifting it up to pop in some walls to create another floor, adding dormers to the top floor so that can be a unit as well," Wenninger said. "We wanted to do something different, but keep the existing structure instead of demolishing it because it's a beautiful home, make it still fit into the neighborhood without being a super-imposing, too modern-looking building."

As for materials, they used tile and wood — no carpet, for the best indoor air quality — either hybrid pumps or on-demand heaters in all units and energy-saving appliances.

"We really wanted to make it something that would function as optimally as possible with as little input from people as possible," Wenninger said. "In terms of the yard, we've got drip irrigation, put together permaculture-type design irrigated by graywater that comes from the building that can be turned on or off."Wenninger

There have been 50 trees and bushes planted onsite, as well.

"Most of them are edible, we felt strongly about that, planting edible landscaping and shade and that sort of thing," Wenninger said. "We put in a bicycle garage so people can hang up their bikes there ... we retrofit to all new commercial standards, earthquake codes and that sort of thing."

Each unit also has a private balcony or porch outdoor space, as well.

"We've learned so much about the process, we've met so many of the right people and connected with like-minded folk, I think that's been a huge success," Wenninger said. "Ultimately bringing back a falling-down, leaky building that was just sitting there also feels really good."

Challenges

"It's very difficult ... I understand a lot more now why developers would raze a building, which I think a lot of people would like to hear, because the cost is so high to renovate," Wenninger said. "You can get something (new) framed so quickly, but renovating an existing building, that can be a really slow process for renovators."

The team faced many challenges that drew out the whole process.

"Working with the City has been a big challenge, it's not an easy process," Wenninger said. "The permit process, we waited a year for permits for the renovation work, when you can get a demolition permit very quickly."

Some challenges were purely small-business related.

"I also think just not having all the perfect connections yet in place in terms of vendors and suppliers and contractors you're going to work with," Wenninger said. "You think you're going to get it done quicker — you have timelines that show that — but inevitably things are going to crop up, you don't know what you're going to run into underneath walls. When you scrap the site, you have a clean slate, you can move so much quicker."

Bringing an 1890 building up to modern-day code included many changes, such as a second railing going up the stairway. But in the old, narrow stairway, another railing would block modern-day furniture and appliances during move-ins or maintenance from fitting up the stairs.SUBMITTED: WOODSONG PROPERTY RENOVATION PARTNERS - Each condo is a full floor.

"We applied for a (variance), they agreed this is how the original house was and we can leave it that way, but they denied that so we have to figure out what to do," Wenninger said. "Little things like that make getting to the end very challenging."

Zoning

The Dekum condos are in a commercial zone.

"Four units is not yet allowed by the City of Portland if it's in a residential zone, but we're trying to get that reconsidered," Wenninger said. "This definitely could've been something completely different. In a commercial zone, it could've been a 30-unit building. We felt for the neighborhood, wouldn't it be nice to have four condos people could purchase?"

The property is in a CM zone, or mixed commercial/residential, which promotes development that combines commercial and housing uses on a single site. This

zone allows increased development on busier streets without fostering a strip commercial appearance. Many developers have built apartment buildings with dozens of units and retail on the ground floor in this type of zoning.

"In a commercial zone, you're allowed to do a lot more than in strictly residential zones," Wenninger said. "What we did is treat this like residential, and build four units where normally, if that were zoned residential, you wouldn't be able to do — just to show people, to show the City of Portland what you can do: I think if you allow that fourth unit, then you can bring small developers into the game."

The BPS's Residential Infill Project is happening right now, and Woodsong sat on the advisory committee. The project takes a fresh look at the allowances for development in single-dwelling neighborhoods. BPS staff, other City bureaus and local agencies are working together to draft zoning code and map amendments that address the scale of new houses, create more housing opportunity for Portlanders and refine narrow lot development standards.

"That would allow it — we think — to pencil, but with just three, which is what's currently allowed, it's very different unless you're a big company with big connections and can do things very quickly," Wenninger said. "That's something we would like to further bring to the table and see if we can get the City to consider implementing."

While Wenninger was always sure they'd reach completion, the straws piled up.

"All those tiny details multiplied by a hundred make it really much more understandable to me now why someone might choose to demolish a home and start from new," Wenninger said. "Build in an older style maybe, but you don't hit those snags that will hold you up and cost you money — every day you're in construction costs."

She said they learned a lot over the whole process, although it took a lot longer than anticipated.

"I'm pretty sure for us as individuals, it's not going to be dollar profitable, but we've got a PhD in development now," Wenninger said.

Financing

The actual cost of the project, roughly twice the original budget, ended up being nearly $1.6 million.

"That's including a bunch of costs including lender fees that weren't originally anticipated because we anticipated a much shorter time frame and we're using debt rather than equity financing and that really drove up the cost," Woodsong said. "Without full accounting, (we spent) between $80,000-90,000 on SDCs (system development charges), permit fees, water connection fees, etc."Woodsong

Woodsong said there are two things the City could do to make projects like this more viable: planning and predictability, and changing the zoning code — which the City is working on in a variety of ways, including not only the Residential Infill Project and the Design Overlay Zone Amendment (DOZA) project, but also the Central City 2035 Plan. The 2035 Plan replaces the 1988 Central City Plan as the primary guiding policy document for the Central City with goals, policies and tools designed to make the Portland's urban core more vibrant, innovative, sustainable and resilient, which includes updating the zoning code in volume 2A. The draft is currently the subject of City Council discussions, and is anticipated for adoption in early 2018.

"If the BDS could guarantee a turnaround time on permit issuance, say 30 to 60 days if plans are complete, it would provide a certainty to the builder that costs would be contained and the project could reach completion within one construction season," Woodsong said.

He believes this change could increase predictability for the builder and lower cost for the consumers.

"Four-plexes need to be legal in residential zones, by right: not as a conditional use permit or via discretionary review, (but) rather you have the right to pull permits and build," Woodsong said. "You can get a residential mortgage on four units, so allowing four-plexes in residential zones would be bringing city residential zoning regulations into line with federal residential lending regulations."

CORRECTION: An earlier version of this story incorrectly reported Carrie Wenninger's name.

By Jules Rogers
Reporter, The Business Tribune
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