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Construction costs, generational demand are changing the residential housing market

COURTESY: DON VALLASTER - Hawthorne, which features 16 townhouse units, is an example of the current trend in residential architecture.As the Portland metro area strives to produce enough housing amid rising construction costs, baby boomers and millennials are driving the market for residential architects and the types of projects being built.

Dave Giulietti, AIA, principal at Giulietti/Schouten Architects, said many baby boomers who are also empty nesters still living in single-family homes are planning for less mobility by adding elevators and other amenities such as more open bathrooms that provide greater accessibility without looking institutional.

Others are opting to install accessory dwelling units (ADUs) on their property as their primary residence or to create more living space for visiting children and grandchildren. Giulietti said the ADUs also create opportunities for supplemental income.

"Many retirees want to keep their house but also want to be mobile for traveling. They like the ideas of having a small ADU as a home base for themselves, and renting out the larger home while maintaining control over their lifelong investment," he said.

Some baby boomer/empty nesters who love Portland and have maintained large, older homes for years are looking to downsize, but want to maintain the quality of materials and lifestyle that they have grown accustomed to. They want to be in walkable neighborhoods and have flats in an elevated building rather than multifloored homes.

"Many, however, would prefer smaller homes over the condo life, but the in-city small house geared to that demographic is almost non-existent," Giulietti said.

He notes that Portland doesn't have a housing crisis because of a lack of housing or a lack of the ability to construct more housing. Nor does Portland have a lack of investors and developers who want to build more housing.

"What we have is a cost-of-construction crisis that is causing the increase in the costs of housing to all socio and economic demographics," Giulietti said. "It's the most expensive time I've ever seen, and I've been doing this for 33 years."

More multifamily housing is being built in an effort to increase density, respond to the influx of people moving to Portland and Oregon, combat the high costs of construction and infrastructure, and honor the urban growth boundaries.

"The current trend has been for rental apartments as opposed to condominium units. The ability to purchase and pay for condo fees has a limited market," Giulietti said, adding that many millennials and younger generations do not want to buy a house and settle down.COURTESY: DON VALLASTER - The Jefferson shows how the current trend of ground-floor retail combined with market rate apartments are making an impact on Portlands urban residential landscape.

"They want to be more flexible, to be able to travel, change jobs, and potentially move from city to city or even neighborhood to neighborhood," he said. "To some degree, they feel it is an impossible dream to pursue with the costs the way they are. The demand for studio and one-bedroom apartments is responding to that need. The costs to rent, however, can also be extremely expensive and, often, two-bedroom apartments are being shared."

Giulietti said apartment buildings have replaced the rowhouse and townhouse trend that was happening before the housing need increased.

"The land is too valuable, and developers need to maximize the number of units to offset the costs. There have been some smaller developments, like duplexes and fourplexes, but they tend to be being pushed further out of the central city where available land is less expensive."

Don Vallaster, AIA, founding partner at Vallaster Corl Architects, has a long history of renovating and adapting historic buildings and specializes in multifamily, mixed-use and residential projects. His firm's work includes the Central Eastside Lofts, a five-story building with ground-floor retail space and four levels of market-rate apartments; City Lofts, the first condo project in the Pearl District; Hawthorne, one building that features 16 townhouse units; and The Jefferson, an 83,000-square-foot, mixed-use development with a variety of residential units, live/work lofts and retail space. COURTESY: DON VALLASTER - The Central Eastside Lofts building combines market-rate apartments with ground-floor retail.

Vallaster said the project types he works on, depend on the neighborhood.

"The east side tends to be more millennials and the Pearl District tends to be more mixed and multigenerational."

He added that while several hotels are under construction, the market for multifamily projects is slowing.

"Things were going strong a few years ago, and now we're in a real slowdown," Vallaster said. "It's transitioned from apartments, and there are still a few affordable projects going through, but it's been a surprise to a lot of us how much it has slowed down."

Melody Finnemore is a contract writer who regularly contributes to the Business Tribune. She can be reached at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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