Did Portland City Council Suppress Housing Supply in 2013?
On July 6th, Portland City Council will be asked by members of the NW Parking Stakeholder Committee to require tiered minimum parking requirements, described below, in the Northwest Plan District.
Although the Planning and Sustainability Commission declined to recommend this zoning change, citing concerns about housing affordability, several commissioners remain undecided and it seems very possible that council will override the planning commission’s recommendation.
Regardless of the outcome next week, a larger question looms for those concerned about housing affordability and the impacts of parking policy on our city: When will we revisit the 2013 decision to require parking in transit oriented housing developments?
In 2002, City Council passed zoning rules that allowed new residential developments within 500 feet of frequent service transit to be built without on-site parking. Unfortunately, City Council, which included then-councilman Charlie Hales, did not follow up and provide neighborhoods with viable residential parking permit programs and other parking management tools to accompany the potential new developments.
Ten years later, some developers began building apartments with little or no on-site parking, most notably along SE Division Street. The result was a backlash from influential neighborhood activists who demanded that on-site parking be required. After several hearings, City Council imposed a tiered system of minimum parking requirements on new construction:
- Buildings with 30 or fewer housing units could be built with no parking.
- Buildings with 31-40 units would need to build parking at a ratio of 1 stall for every 5 housing units.
- Buildings with 41-50 units would require 1 stall for every 4 housing units.
- Buildings with 51+ units would require 1 stall for every 3 housing units.
See page three of this PDF for the actual zoning code.
Opponents to these rules pointed out that parking is expensive. An average parking stall in the USA adds ~$225 in costs for a building, therefore a required parking ratio of 1:3 adds a cost burden of more than $70 per housing unit. If a property manager can’t recoup the full cost of parking by renting the space, then the overage will be spread out among the other residents of the building.
Furthermore, parking requirements generally lead to less housing. Surface parking uses up land that could hold more housing units. Above ground parking takes up space in the building where more people could live. Underground parking is most expensive and takes up less space, but room for apartments is still lost to entrances and stairways to access the parking.
What Was The Effect?
So what effect did the 2013 changes have on our rental housing market?
No one knows for sure.
The city did not make estimates in 2013 of the effect on housing supply and prices. The city did not study the effects of the new policy. The NW Parking Stakeholder Committee has not provided estimates on the effect of housing supply and prices in NW Portland if they are successful in their appeal for minimum requirements.
What we do know is that the average cost per housing unit in Portland was on the decline prior to the 2013 amendments (although we cannot prove that increase was caused by the parking requirements).
We can also look around and see that there are new developments going up with exactly 30 units and that’s a sign that parking minimums are restricting housing supply. There’s no reason a development should have exactly 30 units, but a survey of Next Portland reveals an unusually high number of those buildings. To collect the data for the following graph we did a search on for articles on NextPortland.com and “3X unit” or “3X units” where X was 0-9. We placed each development’s address on a list. While not scientific, this provided an eye opening distribution.
There are at least 14 projects proposed or built in the last two years with exactly 3o housing units (at least one has on-site parking). There are 12 other developments with 31-39 units. Of the 12 developments with 31-39 units, three of them are east of SE 140th, one is a subsidized affordable housing development on the South Waterfront with no on-site parking, and two are in NW Portland which (currently) has no minimum parking requirements.
Without an arbitrary parking requirement, how many of the buildings with exactly 30 units would have more housing? We can’t know for sure, but it is very likely that 30-60 additional units would have been built among those developments, two additional building’s worth. A similar, but smaller, spike for buildings with exactly 40 units exists with very few buildings built containing 41-45 units.
Surely there was a good data driven reason to pick 30 units as a threshold.
But there wasn’t. The Planning and Sustainability Commission proposed a single 40 unit threshold for new transit oriented developments with a single ratio of 1 space for every 4 units. Commissioner Nick Fish proposed an amendment that created two additional tiers at 3o and 50 units. The effect of these amendments was to further suppress the amount of housing built in the city of Portland since 2013, a time period coinciding with record rent increases due to extreme demand for housing.
Fool Me Once…
In 2013 the City Council made a bad decision because there was public pressure from influential activists and anxious neighbors to solve a perceived crisis. In 2013, no one had heard of Lyft, rents were high but not as astronomical as they are now, and impacted neighborhoods had few tools at their disposal to manage parking.
In 2016, NW Neighbors have a plethora of parking management options at their disposal. They recently expanded permit zones and won’t know the effect that has had until later this year. Meanwhile, we are in the middle of a housing crisis and council should think very long and hard about enacting policies that lead to less housing. Who is clamoring for this policy? Is it renters and affordable housing advocates? Doubtful. Homeowners with stable housing who enjoy a highly subsidized public resource of on-street parking are the influential group who are lobbying council for these restrictions.
We should be repealing minimum parking requirements throughout the city, not expanding them.
Please join Portlanders For Parking Reform on July 6th and testify against this regressive policy.
Note: This article was originally published with data that did not include 2 additional 30 unit buildings and 5 buildings with 31-39 units. The collection method is not scientific and it is very possible that there are additional developments we are not aware of, or developments which were proposed with 30 units and were built with more or fewer than the proposal. The premise of the article, however, should hold: an arbitrary threshold will suppress housing development above that threshold.