The City Council passed two ordinance to encourage converting vacant downtown Portland office buildings into housing on Wednesday, March 15. Both attempt to address the high cost of bringing such buildings up to current earthquake standards.
But the council also released the results of a survey that shows more changes are needed for many conversions to happen quickly. They included reforming the construction permitting process and reducing the cost of other requirements imposed by the city.
“Recognizing the enormous cost of office conversions, the City is acting to create greater financial feasibility for conversions that produce additional housing in the central city, and drive investment into empty offices for more vibrant neighborhoods in safer and more sustainable buildings,” Wheeler said when the ordinances passed.
The two ordinances are part of an ongoing effort to help address the vacancy rate in the Central Business District, which is up nearly 26% in recent years and is expected to continue to rise. They will:
• Exempt qualifying conversion projects from all city-imposed System Development Charges up to the ]cost of the seismic retrofit or $3 million, whichever is less. Eligible conversions still must comply with Inclusionary Housing requirements that mandate a certain percent of units for affordable to households who earn less than the area median income. This exemption will expire and be re-evaluated in July 2027.
• Lower the seismic improvement standard for R-2 classified buildings to a safety level consistent with those in other major cities in seismic areas, like San Francisco and Seattle.
Some developers do not believe that changes are enough, however.
“The ordinances before you today are very important in laying the groundwork to eventually enable office to residential conversions, but they will most likely not result in additional housing units in Portland in the near term,” said Michi Slick with Killian Pacific, who proposed a moratorium on all System Development Charges, among other things.
The online survey supported Slick’s belief that more needs to be done to encourage additional downtown housing. It was conducted between Feb. 16 and March 3 by the Portland Housing Bureau, which is overseen my Commissioner Carmen Rubio.
Participants included private and non-profit developers, architects, property owners and city staff. They were provided a list of more than 20 current requirements in the development of new housing and asked to rank the top five they believe should be suspended or modified to encourage new housing development. Over 600 people responded.
According to the survey, the top five requirements that should be reduced or eliminated were: bicycle parking; upfront payment of System Development Charges; floor area ratios that limit occupancy; ground floor public uses (such as retail stores); other public infrastructure requirements; demolition delay requirements; mandatory non-conforming use upgrades; mandatory parking impact analysis; maximum height limits; and bird-safe window glazing requirements.
Rubio said she will soon ask the council to change the timing of System Development Charge payments. The other findings requirement additional research before anything is done, however. Results will be released throughout the year.
“The City first called out the housing crisis in 2015, and that resulted in the passage of the Portland Housing Bond in 2017. That bond is exceeding expectations – and more actions have been taken since to build even more affordable homes for Portlanders,” Rubio said. “But all told, it’s still not enough. We need to be looking closely at our development processes and policies to see what more we can do.”