The news in March from Oregon's Office of Economic Analysis is no news.
Although Oregon’s economy is recovering, it has not recovered. The baseline employment forecast remains essentially unchanged over the last six months. Slow growth will continue to be the norm.
But growth is happening.
Communities in the Portland metropolitan region are seeing streetscapes and skylines change with multifamily, mixed-use developments located near transit that not only provide needed rental housing, but create jobs and generate economic activity.
Two transit-oriented projects at different stages of development tell a story repeated throughout the region and the nation: the smart money – in both public and private dollars – is on development projects that push economic recovery.
80 jobs for every 100 units
According to the National Association of Home Builders, for every 100-unit multifamily property of affordable or market rate apartments, 80 jobs are created by new construction, 42 jobs are supported by spending locally earned wages, and 32 jobs are supported after construction by households in the new apartments.
For a close-in North Portland area with a diverse collection of historic communities, commercial and industrial corridors, parks, trails and natural features, it’s a formula for revitalization that is generating opportunity in a flat economy.
The Prescott rides out market collapse
The vacant corner lot in the up-and-coming neighborhood just north of the Portland downtown core was a placeholder for development longer than expected.
Purchased in 2007 by Sierra Construction Co., an established Seattle-based firm, the block on North Interstate Avenue, between Prescott and Skidmore streets, falls within the Interstate Corridor Urban Renewal Area.
Working with Myhre Group Architects, the developer drew up plans for The Prescott, a five- and six-story building with 155 market-rate rental units and almost 9,500 square feet of ground floor retail.
But like hundreds of other construction projects in the region, the project hit a wall with the collapse in 2008 of the real estate market. The developer sold the land in 2010 and the project was canceled.
A new buyer stepped up in 2011, retaining Sierra Construction as developer. Financing was secured through a Department of Housing and Urban Development loan guarantee and a combination of private equity and $400,000 invested by Metro's Transit-Oriented Development program. The Prescott broke ground in April 2012.
Rebounding with new jobs and spending
The impact on the local economy in dollars spent during construction of The Prescott and after homes are occupied is estimated to be $39.8 million, with the added economic activity generating 115 jobs.
The Prescott will be located directly across from a light rail stop on the MAX Yellow Line, connecting residents to downtown Portland and Portland State University to the south and the Portland Expo Center to the north. The development's residential units, combined with its retail activity, are expected to generate 103 additional transit trips per day, producing $1.9 million in fare revenues over 30 years.
"Opportunity is not always so clear in this economy and market," says Metro Councilor Carlotta Collette. "(The Prescott) is going to be a great model for us to look at in terms of what can get done."
Another vacant lot a mile to the east of The Prescott is the future site of New Seasons Market, expected to bring more than 150 new jobs upon completion in 2013 and provide an option for residents of The Prescott to keep dollars local.
Smaller, closer in and near transit
Reflecting real estate trends identified in the Urban Land Institute's 2012 annual report, smaller homes located closer to work and near mass transit hold increasing appeal as more people look to manage expenses.
When housing and associated costs such as transportation and utilities are affordable, families have more income to spend on local goods and services.
The Couch Street Apartments, the first new housing development in the lower East Burnside area in nearly two decades, will offer working families more rental options in a rapidly emerging commercial area with amenities close by.
Couch Street Apartments construction supports local economy
When completed in the fall of 2012, the Couch Street Apartments will provide 70 apartments, 11 ground floor retail/office spaces, a roof deck and a bike room for repairs and cleaning.
Located on the corner of Northeast Couch Street and Sixth Avenue, the mixed-use development is a half-block from the new eastside Portland Streetcar line on Grand Avenue, scheduled to open at the same time as the apartments.
The development's retail tenants will add to East Burnside's growing commercial, office and retail district, home to the bside6 office building and Noble Rot dining, retail, and office space – both projects of the Metro TOD program – and the Jupiter Hotel, Rontoms lounge and Burnside Brewing.
Research shows that low- to moderate-income households are more likely than others to spend the money they save on rent for basic household and other unmet needs. In this East Burnside neighborhood, local businesses stand to gain.
Using local workers and suppliers
Spending during and after the construction of the Couch Street Apartments is estimated at $15.6 million and will generate approximately 115 jobs.
Josh Ring, construction supervisor with Bremik Construction for the Couch Street Apartments, estimates on a day-to-day basis, he employs anywhere from a dozen to 50 crewmembers and trades people over the course of the construction timeline, estimated to be 12 months.
"We make a real effort to use local trades people and suppliers," says Ring. "It just makes sense for the lifecycle of the project to have your suppliers close by."
Metro's TOD program invested $300,000 in the project and anticipates returns in increased transit ridership as a result of the development to generate more than $500,000 in fare revenues over the next 30 years.
Three additional transit-oriented multifamily developments supported by the Metro TOD program are scheduled for completion in the region in the next 12 months.