Cranes soar over the One North development on North Williams Avenue in Portland.
It's probably the most controversial prediction in the 2014 draft of Metro's Urban Growth Report: A forecast that 55 percent of the new homes built in the Metro area from 2015 to 2035 will be multi-family units within the Portland city limits.
That forecast, which comes from a Metro analysis of market trends and zoning around the three-county Metro region, has left some suburban leaders scratching their heads.
The latest round of discussion on the forecast came Wednesday, as the Metro Policy Advisory Committee talked about the likelihood of 113,525 new multi-family units popping up in Portland by 2035. Another 10,200 single-family homes would be built in Portland by 2035, Metro estimated.
In 2013, Portland had an estimated 150,000 single-family houses and 100,000 multi-family homes.
The forecast predicts another 18,383 apartments, and 63,596 new single-family homes, in the suburbs by 2035. More than half of that growth, Metro said, would happen in Washington County, which would see 33,000 new houses and 10,000 multi-family units. In 2013, the Census Bureau estimates, Washington County had an estimated 125,000 houses and 88,000 multi-family units.
Metro uses the growth forecast to determine whether it needs to expand the urban growth boundary. The boundary is required by law to have capacity for 20 years of growth – often a topic of debate by developers and land conservation advocates.
At Wednesday's MPAC meeting, a prominent Portland developer defended the forecast, saying the Portland housing market has fundamentally changed.
"A lot of what we're experiencing is a town becoming a city, and undergoing the growing pains of that discovery," said developer Ben Kaiser. "We're not the Portland of 15 years ago. We're Portland today, and Portland is on the map with all the other cities on the coast."
Kaiser said there's been a recent influx of out-of-state developers looking at Portland as a more affordable place to do business. Firms from Southern California, Seattle, the Bay Area and even the East Coast are buying land at values that, to them, are relatively cheap.
They're then turning around and using cash reserves – not financing – to get construction started.
"These firms are coming from around the country for a number of reasons, but they're coming here because they're bargain basement shopping," Kaiser said. "When you're coming into the Portland market, it's staggering how much less expensive we are than San Diego, Los Angeles, Vancouver, San Francisco. These companies are absolutely struck by how inexpensive our land is."
Kaiser credited the urban growth boundary as one of the reasons Portland has remained attractive for developers. He said the Portland region's focus on keeping its central core healthy helped it recover relatively quickly from the Great Recession, faster than sprawl-driven Sun Belt cities.
"I was in Cleveland last week. What we want to avoid is a city where they had flight to the suburbs in the 1960s, and that core is still dead," Kaiser said. "When you're trying to revive the core, but you still have that band for 15 miles, you're driving through 15 miles of fallow land trying to get the core to revive. If we, as a city, focus on keeping the core boosted, we won't suffer that."
But the notion that Portland will double its inventory of multi-family units in the next 20 years is still hard for many leaders to accept.
"Out in the suburbs, we seem to think folks want single-family housing, and they're not going to want to go to Portland unless they're forced to go to Portland," said Hillsboro Mayor Jerry Willey. The growth report forecasts that 2,722 single-family houses and 2,644 multifamily homes will be built in his city in the next 20 years.
Kaiser wondered whether customers actually want detached single-family homes – or if they want family-style dwellings and think of detached housing as their only option for a bigger home.
"I'm wondering what exactly single-family housing means," Kaiser said. "Single family housing can be a 5000 square foot lot with a yard – or a single-family, 3 bed, 2 ½ bath condo project. Are you aware of a lot of product that doesn't get sold or rented because it's not (detached) single-family?"
Willey said his city has seen a combination of both styles of growth, but pointed out that the single-family detached inventory in Hillsboro is low.
"I've heard two stories in the last two days where people put their house on the market, and it sold the first day at a higher-than-asking price," he said. "And then a couple other people trying to find a house in the region couldn't find one because they were being outbid."
Metro Councilor Carlotta Collette pointed out that there will continue to be space around the region for single-family housing.
"Most of the single-family housing we anticipate happening in the next 20 years is going to be in places like Hillsboro and Gresham, that have land that's already inside the UGB that isn't being developed," she said. "It's not like there isn't already a lot of land, it's just that the market isn't building."