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Could Rose City gentrification turn region into another expensive Bay Area?

Photo Credit: TRIBUNE FILE PHOTO - More affordable housing, like these micro apartments in Northwest Portland, could require changes in the way the city handles onsite parking, according to a San Francisco housing expert who spoke to the City Club last week.If Portlanders hope to address the area’s growing housing affordability problem, maybe they should get over their aversion to apartments built without parking spaces.

That bitter pill was offered Friday at the Portland City Club by an emissary from San Francisco, who joked he was sent “back from the future” to warn Portland how to prevent the housing mess now faced by millions of Bay Area residents.

“We certainly think that parking (or the lack thereof) is a housing affordability strategy,” said Gabriel Metcalf, executive director of SPUR in San Francisco.

Metcalf was a featured speaker at a City Club forum on gentrification and housing affordability: “A Tale of Two Cities — Playground for the Wealthy or Home for Working Families?”

Portland city planners have promoted a new wave of apartments being built without parking lots as a way to discourage driving and encourage tenants to take a bus, walk or bike. Much has been made of the environmental benefits, but far less has been said of the financial benefits to tenants.

In San Francisco, requiring apartment developers to provide parking can add as much as $50,000 to the building cost of each unit, Metcalf said.

He called for Portland to stop requiring developers to install parking with housing projects, and instead leave it up to developers.

Such policies should work against gentrification, Metcalf said, because affluent people won’t want units “if they don’t come with a parking place.”

But don’t tell that to folks living along inner Southeast Division Street, where a wave of hip new restaurants, bars, ice cream parlors and other attractions have sprung up along with a string of four-story apartments with little to no parking spaces.

Once the dinner hour approaches, it’s getting harder to find a parking space in and around Division or on side streets to the north and south. That’s caused a backlash among residents in the area against the city’s apartment policies, some of whom have to walk far from their parking space to their house.

In response, Mayor Charlie Hales pushed for a slight modification to the no-parking standards last year. The revised rules require a small number of parking spaces for new apartments proposed after the policy change, if they have more than 30 units. Projects larger than 30 units built on corridors well-served by buses now must have one parking space for every three to five units, far less than the standard requirement elsewhere in the city of one parking space for each unit.

Allen Field, who lives in the Richmond neighborhood that includes inner Division Street, said he likes the new restaurants going in, but said all the new development is making Division more upscale, and that translates to higher prices.

“The apartment building bubble that is happening on Division and bringing in a lot of restaurants is most likely having the opposite effect of reducing affordability by raising rents and property values and increasing the cost of living in rental rates, property valuations and taxes,” Field said.

“I don’t think either apartments with or without parking helps on affordability issues,” he said. “Do you know how expensive these apartments are?”

Aaron Jones, who recently completed a 74-unit apartment without parking on Southeast Division and 48th Avenue, said he’ll charge rents between $875 to $1,095 a month, but his units will be smaller than the typical ones farther to the west near most of the new restaurants, which he said are renting for $1,275 to $1,570 a month.

Creating a barrier

Ben Schonberger, a board member of Housing Land Advocates, a local nonprofit that promotes affordable housing, said developers usually will charge what the market will bear on rents, so there’s no guarantee they’ll pass on savings from parking to tenants. But on the macro level, he said, studies show mandatory parking requirements make rents higher.

“Parking costs money,” Schonberger said. “It takes land, and there’s some development costs even if it’s just a surface lot.”

Schonberger, like Metcalf, argues that local governments should stop requiring parking, and let the market decide.

“We think that requiring parking or requiring too much parking is going to create a barrier to more affordable housing,” he said. “It doesn’t have to be zero; it just has to be less.”

A city study last year calculated that mandatory parking can add to monthly apartment rent costs by $50 a month all the way up to $750 a month, depending on the type of parking


The study used a baseline of a four-story, 50-unit apartment building without parking. By adding nine parking spaces tucked under the second floor, rents would need to rise by 6 percent, according to the study. But that’s only one parking space for every five units, and it would allow the builder to put up only 45 units instead of 50 on the site.

If that developer decided instead to use some of the space for surface parking, that would drive up rents by 50 percent, largely because there’s space for only 30 units instead of 50.

If the developer built underground parking, that would drive up rents by 63 percent and allow 44 units on the site.

The average cost in Portland to pave a surface parking lot is $3,000 per space. Spaces in a structured parking garage cost $20,000 apiece. Underground lots cost $55,000 per space.

Metcalf said any calculation of the housing affordability benefits must factor in transportation costs. Aside from any reductions in the rent, he said tenants’ overall cost of living will be lower if they don’t have to buy a car.

Schonberger said he empathizes with Portlanders who have lived a long time in their neighborhoods and are now seeing them change dramatically in a short time.

Metcalf cautioned Portlanders not to do what San Francisco has done in response to growth. The city’s restrictions on new housing development over many years have only fueled the housing affordability crisis now affecting millions of Bay Area residents, he said.

Schonberger had the same warning for those who are anxious about major changes underway in their neighborhoods.

“I don’t think the solution is ‘let’s have less housing and less development and keep people out.’ ”

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