Portland's Apartment Construction is Drying Up
The recent surge of apartment construction in Portland over the last several years seems to have taken a nosedive. Applications for new housing developments have all but stopped and there are plenty of reasons why.
With construction costs booming as well as rising land prices, many believe the real reason for this dramatic decline in new apartment development to be political. The affordable housing measure seems to be rearing its ugly head again. This measure compels developers to set aside rent-restricted units in large apartment and condo projects, if home construction follows the same trend this could ultimately push housing costs up even higher than our current all time highs.
There are currently only 12 privately financed developments totaling approximately 654 units that have sought building permits since the affordable housing policy went into effect last year. Prior to the policy we would have typically seen thousands of new units proposed per year.
While we can't say for sure whether the new policy is to blame for the steep decline in new apartment development in Portland, what we do know is there's currently around 2 years of future development plans currently backlogged that were submitted before the new rules took effect.
Tyler Bump, a senior economic planner with the Bureau of Planning and Sustainability comments: “It’s not that the policy is currently broken, It’s that we need to track it before it breaks.”
Developers say the market has shifted, rents in high-end buildings have been stagnant over the last year seeing landlords turn to move in specials to try and entice new renters in the market. They also note - it's getting more expensive to build.
Ettro Capital's strategic approach to project selection and development keeps costs down and returns favorable for our investors. While the city continues to work out it's affordable housing crisis we've been able to develop smaller projects with great returns that offer affordable housing options to new and existing residents in the area. If you would like to learn more about how we work please contact us at any time.