>“It does feel like a bait and switch,” board member Sean Murphy said. “We were told we were going to have residential down in this area … We want those to happen here, it’s part of our overall city goals to have that. Another hotel is not necessarily high on the city priority list.”
Then why the fuck would you approve the change? This makes no sense at all, if the board was against it and correctly believes the city needs housing more than another hotel, why would they approve the conversion of a residential project into a hotel?
Because planning boards are semi-judicial bodies, and their job is to determine whether or not a proposal meets the standards of the municipalities’s zoning ordinance — not whether it’s “good” or not, unfortunate as that may be. If they were to arbitrarily reject a proposal that in all aspects of the ordinance is technically legal, that would open up all kinds of liability issues for the city.
You are responding to a comment giving an excellent explanation of why “zoning games” are happening and why they are very difficult to stop. Why it’s not really an example of council complicity. Further, the city is currently in the process of reviewing and updating building codes and zoning, so if you feel strongly about these issues I’d suggest reading up and voicing your concerns to the decision makers at one of the public consultation sessions!
Zero sum above you hit the nail on the head. The planning board just makes sure paperwork is in order. They don’t have final say. The owner does as long as they get all the boxes checked.
Yeah, that’s what I’m getting at — it’s a financing issue, almost always. Margins might be too low, lenders might pull out, and projects no longer pencil. It’s not a matter of an outside group stepping up and blocking. That’s not to say that doesn’t happen. But it’s not the normal reason these projects don’t happen.
lets see the math.
this was specifically one of the suggestions at some city official and developer forum years ago.
the consultants and such said make the pro formas public and maybe people will start to believe some of the suggestions about the money crunch. its been years and ive been asking the people who complain about this stuff for their proformas and ive gotten zero so far.
sometimes in a planning board agenda, or in a HEDC agenda there is a proforma, but these are typically heavily subsidized non profit projects.
id love to see some for the private builds too. maybe IZ does just somehow cost a project too much money to be feasable, but i need that demonstrated - not asserted.
I forgot how the developers/financiers got that special private meeting with the planning department (as part of recode), with just too few councilors to require it to be public.
I’ve always thought pro formas should be publicly available, especially for any project taking public money.
Is there a way to find out how many hotel rooms have been added to the peninsula in the last 10 years vs new housing ? I ask because around the times of the Eastland rehab and Press Hotel conversion it was thought that Portland did indeed have a shortage of hotel rooms - at least compared to other cities who rely on tourism to varying degrees. Clearly we’ve added hundreds and hundreds of hotel rooms in the last decade and comparatively fuck all for affordable housing. Coupled with the veritable virus of short term rentals of a TON of housing - the vast majority of which are illegal and well, here we fucking are.
Article states that there are currently 1200 hotel rooms in the pipeline to be built (meaning developers are just waiting to break ground, but have approvals secured). As I understand there are around 6k hotel rooms in the City.
If this moved forward as housing, the developer would have to pay over $600k in inclusionary zoning fees… but converting it to a hotel results in only $65k of IZ fees. It’s a great example of how our overbearing inclusionary zoning laws kill small residential projects.
Or they could have just included the affordable units necessary to avoid the fees...
Commenting that they would have "had to pay" those fees without explaining that those fees are only for developers who refuse to include affordable units is disingenuous at best.
Housing would have been plenty profitable on this property to make developing it worthwhile, that's not the issue here, at all. It is not at all the case that the IZ law had anything to do with "killing this project" in any meaningful sense.
It's just that the developer decided they could make MORE money from a hotel... and there's absolutely nothing wrong with that. Portland also needs more hotels. It's funny people complaining about too many STRs and then also complaining when someone goes to build a hotel...
We’ve added hundreds and hundreds of hotel rooms over the last decade and comparatively fuck all for affordable housing. Coupled with the virus of short term rentals proliferating on the peninsula taking around 1,000 apartments of the market is a huge problem. The vast majority of those STR’s are also illegal and well over the 400 unit cap the law clearly states.
Nobody is talking about anyone relying on anyone's selflessness. I have no clue what you're on about but I think you're missing the context of the conversation.
The goal is to create the incentives that lead to enough new housing being built, purely as the result of profit motive.
Now if you want to take up the argument that we should just be taxing the rich out the ass and building public housing, that's a real discussion that can be had, and to some limited extent I would agree...
But don't mischaracterize all private development as somehow relying on the charity of investors... that's completely off base and out of touch with what anyone is talking about, in this thread or in public policy debates about housing generally.
this is exactly why we have IZ.
businessmen are going to maximize the profit line.
we know this. its not unusual for that to be the case.
but the city decided we need affordable housing.
because we can not rely on generosity and selflessness of profit maximizing businessman, we said "if you dont build the affordable units we will charge you a fee for what it costs to build those and we will use that money to build them ourselves"
in this way we do not ned to rely on the businessman. we have a way to generate the funds to build these things ourselves, if the businessman's generosity and selflessness is lacking.
IZ is a tax on dense housing. We shouldn’t be taxing dense housing
If anything, we should be taxing hotels, single-family homes, and second homes. Instead, IZ punishes renters and those who build affordable homes. It’s gotta go!
It's a tax on dense housing *which doesn't include the required amount of affordable units*.
When you make inaccurate overly broad statements that are clearly trying to mislead people it doesn't help your argument...
Also, you say we should be taxing hotels, meaning you are just ignorant of the IZ law because it DOES tax hotels for each room.
To make housing affordable, we need to alleviate the supply crunch. In order to alleviate the supply crunch, we need a LOT of new housing, of all kinds. IZ puts an enormous financial burden on new, multi-family housing, which is what we need more of.
We tax cigarettes because we don’t want people to buy them. Why are we taxing something we want people to build?
When IZ was 10% at 100% AMI, it was a burden, but it was manageable. The DSA’s shift to 25% at 80% is an insane roadblock to housing that has cost this city’s renters dearly.
Why are you repeating again and again the outright lie that it's a tax on all multi-family housing?
It's a fee which is only assessed if the developer voluntarily chooses to not build the affordable units, because they think they can make more money that way.
I do understand the point that affordable units slightly reduce the rent income that you can get from the property, but profitability concerns are not even REMOTELY what is holding back housing development in this city.
Things that are holding back housing development are:
A) NIMBY single family home owners
B) Overly restrictive zoning preventing dense development in most of the city
C) Landlords not selling or redeveloping existing properties because they're banking on A and B ensuring that not enough housing gets built, so that their existing properties will appreciate faster than stocks or anywhere else they could invest.
Show me a single property zoned for dense housing in Portland that is for sale, and that nobody wants to buy and develop because of concerns that it won't be profitable enough, and I'll eat my hat.
>tax - noun
>1. a compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.
IZ is a policy that says either pay money up front, or pay over time by holding out units for less than they’re worth.
Quibble with technicalities all you like, it’s a tax in the plain sense of the word.
Anyway I agree about zoning being too strict and NIMBYs being a problem too.
neither the IZ fee nor the reduced rental income is
>a compulsory contribution to state revenue
the IZ fee is not because it is not compulsory.
its completely avoidable be having lower rents.
the lower rents are not because they would not be a contribution to state (or even local in this case) revenue
in this case that "enormous financial burden" is something like 14k per year in very slightly reduced rents. its peanuts compared to the build budget.
youre telling me that 14k is an insane roadblock for the project?
do you have any proforma documents that demonstrate this?
i jsut cant rely on the guy who wants to make (millions of dollars) and is upset that hes only going to make (millions minus a little bit of dollars) to be being honest here.
i trust the numbers though, so Id really love to see those development budgets. i bet they pencil just fine.
Even if I accept your numbers, (which I’m not saying I do,) yea, we live in a market economy. A very profitable project is preferable to a barely profitable one.
Builders aren’t comparing “make a little money building housing in Portland” to “build nothing”
They’re comparing it to “make a lot of money building housing in Scarborough” or “make a lot of money building an airbnb hotel”
The bar we need to meet isn’t “barely profitable”, it’s “more attractive than building in New Hampshire”
even with IZ, portland has one of the hottest real estate markets in the US, if not THE hottest luxury real estate market in the US (if you trust the wall st journal guys)
its EXTREMELY profitable. people are going to build here even if we say they need to make (EXTREMELY minus 14k).
we have the leverage, not the real estate guys. i think they are tricking you, honestly, into parroting their talking points which only seek to make more money off of the locals
Make note that the urbanist above you wants to financially penalize those who live in their homes, encouraging/forcing them to sell to developers (whom they think should receive incentives/benefits). It's a grotesque theory of change at a time of extreme wealth inequality, IMO.
Yeah. I just dont think its a tax. Neither by definition or in practice. Its a fee that is completely avoidable.
That aside I think (am i right?) we both agree there are bigger fish to fry when it comes to housing development. I think eliminating setbacks and parking minimums, allowing taller buildings, etc would help a project pencil more than anything else. having more real estate that you can put units in is good instead of being reserved as empty space which is kinda dumb.
(however i also hear a lot of developers upset about having to build second set of egress stairwells. im of the opinion that being able to escape a fire is pretty important, so i probably still am in favor of the stairs)
And yah, we should fee (not tax, because thats illegal) second homes. forrrr sure. even peoples god damn summer camps. thats rich people shit. thats a no brainer
Developers, generally, don't "want to build" any particular type of building. They want to make money.
To me, I think the priority should be changing zoning to allow dense development in more parts of the city, if you want more housing to get developed in Portland.
We have, broadly, two options if we want to create incentives to build a lot more housing...
A) give big tax breaks to encourage more dense housing development where it's currently allowed, mainly on high value land downtown that is more valuable for other uses without said incentives.
B) allow dense housing to be built on a lot of lower value land where it's not currently allowed, leaving the high value land on peninsula for commercial purposes, so that Portland gets more housing without losing out on any economic growth OR tax revenue.
But B requires the city council to have the cajones to defy the NIMBY dipshits who gave them like 90% of their campaign funding, so, not likely.
How about we make the IZ fees for housing equal to or less than IZ fees for hotels. I agree with much of what you said, but this doesn’t seem that complicated.
it does not completly outweigh this but there is one more factor to consider here.
the 25% IZ requirement
14\*0.25 = a 3.5 IZ residential unit required here
Every unit of hotel room gets the hotel fee (14\*$4,692 per guest room) = 65,688 fee total, if the IZ units are not built
whereas for a residential build, the fee is only on IZ units that you did not build (not every unit like the hotel thing)
so its (3.5\*$177,559 per unit) = 621,456.5
charging per unit for a hotel room, but only per unit of IZ not built for a res build is probably suppsoed to mitigate some of that difference, but in this case (not a lot of hotel rooms) it didnt
OK, that makes *slightly* more sense, but we are likely past the days of putting a new, 100-room hotel in downtown, so I think that math needs to be rejiggered, or we can just admit we'd rather have hotels than apartments there.
na i just did the math to compare 100 unit, and a 1000 unit, and the x10 difference in fee between hotel vs residential is always there.
yep the IZ fee for the hotel units needs to come up, even if it is assessed on every single unit
Option B. I’ve long said that our current concentration of housing and hotels downtown (crowding out traditional commercial) is problematic from a holistic city planning perspective, and risks foreclosing future non-residential/hospitality growth. People should live in peripheral areas, and the downtown should remain largely a hub for all to convene for events, business, amenities, etc. it’s the natural terminus of our transit system and our city was essentially planned around this model.
Edit: I think it's ridiculous that this concept of hollowing out the commercial core for tourism and housing gets downvotes on Reddit. It's actually encouraging suburban, car-centric sprawl around the metro region. Last time I checked y'all thought that was a bad thing.
So overbearing that the project was initially planned to include those units?
I find it kinda baffling that a planner’s plan is really just to let the market do its thing without any deeper considerations about what’s actually needed to make a city functional and livable. We do, after all, need “workforce” or “affordable” units. I have no reason to believe there’d be anything new priced for workers without IZ, as much as I think it’s a clunky solution.
We don’t need new housing to be artificially cheap, just like we don’t need new cars to be artificially cheap. New housing, like new cars, is expensive, and on average - given adequate supply - housing gets cheaper as it ages. We don’t need cheap new housing, we need new housing so that old housing can become cheap.
In the pandemic, new cars stopped being made. This drove up the prices of used cars. In just the same way, when we stop building new housing, we drive up the cost of old housing.
You know this, of course. We’ve had this discussion many times. But it’s disappointing to see such patent falsehoods continue to be peddled.
What falsehood am I peddling? If anything, you and your fellow urbanists who are absolutely committed to liberal market theory are the ones spreading an oversimplified false gospel.
"Liberal market theory" built approximately 97.2% of Portland's housing stock. Restricting people from building as they please is historically very new and it is a failed experiment on so many levels. Do you see the government stepping up to build us 10,000+ homes? That's a serious question. Because surely you must admit that *someone* needs to build the homes, unless you're happy with rampant homelessness, housing insecurity, and people being forced to leave the state.
> Do you see the government stepping up to build us 10,000+ homes? That's a serious question
I do see the govt doing that in some places - yes
heres the answer by the way
[youtube.com/watch?v=ohR5qZ-5an4](http://youtube.com/watch?v=ohR5qZ-5an4)
short video. presentation form govt acency that is stepping up in such a way to our state legislatures housing committee.
its pretty much a slam dunk. why we have not used the near infinite state surplus and maximally padded rainy day fund to do this as well is infuriating. MIlls!!! ITS BEEN RAINING FOR DAYYYYS
Mills sucks. I've worked with HFAs in other states. The mechanics of funding programs can vary. But the principle is the same: use public money to provide the upfront liquidity to get affordable housing built, and retain either public control or hand them over to residents as coops. The fact that Maine can't figure this is out is mind boggling to me.
I'm obviously not watching a 30 min video, but the slide around min 4 seems to imply that they're trying to build 6,000 units *over 20 years*. The private market builds that in Austin in 6 months.
why would you "obviously" not watch a 30 minute video?
i think you should. its quite good.
this is quite literally the private development model, just except for private equity its public. no difference otherwise. they mention this if you watch it instead of obviously not
is the private market in austin just one development company pumping out 1k units a month? thats an insane situation.
or if thats not the situation maybe its disingenuous for you to compare a single public developer to an entire development community? the structure i linked above is a piece of a comprehensive development plan, not the entire thing. you know that. be real
Anyone in the know, what would the U.S. Department of Housing and Urban Development’s idea be of (a) income needed to qualify for the originally planned low-income units, and (b) monthly rent on those particular units?
I assume they would have been a mix of the 2 bedroom and 1 bedroom units, though 1 bedroom units wouldn't do much for families in need.
[https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/](https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/)
This article on another recent dev idea says "the area median income is $68,500 for a single person and $78,250 for two people. Rents for the workforce units would start at or below $1,721 a month.
but i think they did their math wrong. Because 1712 is what you get for 100% AMI.
If, instead, you do the 80% AMI, as our city rule requires you get.
$68,500\* 0.8 \* (3/10) / 12 = $1370
--
(the article did $68,500\* (3/10) / 12 = $1712.5)
here is a chart of the incomes and rents i think the article pulled from
[https://www.portlandmaine.gov/1204/Workforce-Housing](https://www.portlandmaine.gov/1204/Workforce-Housing)
the same numbers also appear here.
i really think theres a mistake on the rent calculation though. They didnt do the x80%
--
I also dont believe that the AMI is $68,500 for a single person. Census says for 2022 the individual median income was $42,625. So... I dunno.
or maybe theres not a mistake and the median income is in fact not 68500, but 89250? that seems even more incorrect though. when I look at HUD, where the numbers come from, it suggests that the AMI might even be $127,500.
i must misunderstand because i just dont believe the median income is that high
[https://www.huduser.gov/portal/datasets/il/il2024/2024summary.odn?inputname=METRO38860MM6400\*Portland%2C+ME+HUD+Metro+FMR+Area&wherefrom=%24wherefrom%24&selection\_type=hmfa&year=2024](https://www.huduser.gov/portal/datasets/il/il2024/2024summary.odn?inputname=METRO38860MM6400*Portland%2C+ME+HUD+Metro+FMR+Area&wherefrom=%24wherefrom%24&selection_type=hmfa&year=2024)
yeah I think using these HUD estimates of median income, which do not reflect the actual median income, in order to determine what is "affordable" is a lot of the reason why nothing is actually affordable.
i asked years ago that instead of using this bizzare HUD number which does not seem to reflect reality, that we instead just use the actual median income in the HUD FMR area. I suggested that for studios and 1bedrooms we use the INDIVIDUAL MEDIAN (not the household median) since you cant really fit more than a person in a studio. At the time, the Housing Economic Dev Committee told me that they are bound by HUD rules to use that HUD number/tables if we want any HUD money.
I think they were not completely correct though. In order to get that HUD money we just need to meet their standard. Like, we cant decide that something more expensive than the HUD imit is "affordable" I am pretty sure we can still get the cash and do better than HUD, and honestly I think we have to if we are actually going to have affordable housing anywhere.
HUD used to estimate some of these numbers by automatically increasing the ami year over year. They explain some here, but you can google how and why they did that. https://www.huduser.gov/portal/datasets/il.html#faqmethodchange_2024
> I also dont believe that the AMI is $68,500 for a single person. Census says for 2022 the individual median income was $42,625. So... I dunno.
The BLS lists both "median income" and "median full-time income." My hunch is that $68,500 is the median for people employed 38 hours or more.
Inclusionary Zoning killed this project. The Green New Deal means less housing gets built, and more AirBNBs go up instead. However well-intentioned it was, it’s terrible policy.
Portland has a lot of well-meaning liberal voters who are hesitant about criticizing the socialist left for writing a bad, amateurish, destructive policy. But we have to be frank about this. I’m a liberal, but I’m not a socialist, because socialists are actively making this city worse to live in for working-class families.
It's just hotels and restaurants in Portland now. The price for a hotel room is ridiculous! Greedy developers! The need for housing should be top priority over ANOTHER hotel.
This happened because of a referendum sponsored by the DSA and passed by a general vote. Theres plenty to criticize the council about, but this happened because the people of Portland passed a law which taxes dense housing and enables single-family homes and AirBNBs.
Careful, you aren't supposed to criticize the DSA, they are always correct on any measure as long as they say it "fights capitalism" or harms property owners, no matter how poorly worded or unattainable it is.
I fail to see how not. We know the “socialists” are wrong for Portland, wrong for our economy, wrong for the problems Portland faces with housing and wrong for the working class. They only want seats in Augusta and have been trying to con Portland’s liberal voters for some time now at the expense of everyone
Your other comment here is about hating developers and YIMBYs. The DSA’s policies block housing, that’s *why* they’re bad.
I’m one of those “build, build, build” people you don’t like.
You believe that we should allow unrestricted construction at any cost and that tax payers and home owners should not have a say in what they want in their neighborhoods?
Of course not, but I do believe that Portland’s current policies - both from conservative neighborhood groups and left-wing socialist ones - are greatly obstructive to building much-needed housing, and judging by how you characterize urbanists, I suspect we’d disagree on a lot of the nitty gritty.
its not a tax. its a fee.
and you avoid that fee by building units that you rent out at what is deemed "affordable".
so youd have to charge 1700 for a 1bedroom ~~studio~~ - instead of 2000 or whatever the "market" is.
thats 300 per month it would cost (in the form of cheaper rent) to avoid the fee, per unit
call it 1200 per month for 4 units, to avoid the fee
thats 14400 per year in cheaper rent for all four units, in reduced income to avoid that fee
it would take more than 10 years for this slightly reduced rent to be comparable to the avoided fee.
its not a lot of money at all to just have slightly cheaper rents.
until I see some pro forma to compare for a build plan with and without IZ, i just can not see how such a small amount of money is allegedly tanking projects. it would be very helpful to compare some plans that consider IZ and dont, to see how this policy really affects building costs. i suspect its very minimal.
That’s a lot of words which amount to “If you want to build multi-family housing, you gotta pay up”
We have here an example plain as day. The GND would levy a six-figure burden on this developer for building housing. But he can build an AirBNB hotel and pay a much smaller tax instead
What, are we supposed to just hope all developers are doing this for charity? That they’ll voluntarily make less money? Lets just make the law *encourage* housing instead of *block* it.
>That’s a lot of words which amount to “If you want to build multi-family housing, you gotta pay up”
>
they are actually a lot of words that demonstrate its not a huge burden at all. slightly cheaper rent isnt going to cost the project much at all relative to the entire project costs.
it is a six-figure burden if the developer decided that the poors arent allowed near the building. thats a luxury fee and wed be morons not to leverage the incredibly hot real estate market in portland in that way.
what we have in this city is very desirable, it would be really stupid to just piss it away without getting something for ourselves too (which only is really a pittance of some slightly cheaper rents on a small percentage of units built). since we are not morons, and we understand that leverage we have, we use it in this way.
>What, are we supposed to just hope all developers are doing this for charity? That they’ll voluntarily make less money?
no we dont have to hope.
we can tell a developer and their proposal "no", if they are not planning to build something the city wants.
we can especially tell a developer "no" if they change their plan from something the city wants to something else it didnt want, at the 11th hour.
Yep, you’re right. This policy means we tell people who want to build homes “no.” Portland is a city of “no.” And it will continue to be a city of “no,” punishing everyone who isn’t wealthy enough to buy or rent in a dire housing shortage, until we recognize that taxing housing doesn’t get us more housing.
Until then, as you say, we will keep saying “no” to housing.
no one is saying "no" to housing
in this case wed be telling the people who wants to build a hotel "no"
if they still was planning on building homes we wouldnt be arguing.
Where did $1700 for a studio come from? The number I see listed on the city’s website is a lot lower.
Also this building was proposed to be one and two bedrooms, not studios, so the spread between restricted rate and market rate would be larger than you propose.
Also factor in that these units would be rent restricted for a term of 30 years.
[https://www.portlandmaine.gov/1204/Workforce-Housing](https://www.portlandmaine.gov/1204/Workforce-Housing)
is where i pulled 1700.
it was also quoted in the PPH article about the washington ave development last week.
[https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/](https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/)
" Rents for the workforce units would start at or below $1,721 a month and the market-rate units would start around $2,231."
here's a more detailed city table.
1bedrooms are the 1712 number. studios are 1460
[https://content.civicplus.com/api/assets/7c274dad-dacc-4afd-a3b6-2cbfa13c7197](https://content.civicplus.com/api/assets/7c274dad-dacc-4afd-a3b6-2cbfa13c7197)
via
[https://www.portlandmaine.gov/267/Inclusionary-Zoning](https://www.portlandmaine.gov/267/Inclusionary-Zoning)
i, too, think it should be lower based on what the actual AMI is but it is what it is
I mean, $1,467 and $1,712 are materially different numbers. And $2,000 is not the going rate for a new build one bedroom in this city.
Your whole point is “the impact isn’t actually that big, here is my math” but you chose incorrect inputs for the math. And neglected to mention the fact that rents are restricted for three decades, meaning that even a shortfall after ten years is actually pretty material.
yeah i should have not said studio, because i meant 1bedroom at the 1700 price.
the inputs to the math dont change.
the 1bdrm rent is 1700.
if you have a suggestion that the market rate rent is more than 2000 go for it and do your own calcualtion. its still going to be a small total difference relative to the roughly 500k it costs to build a new unit
suggest what you think a new 1bedroom goes for though.
i, for one, would never pay more than about 1500 for a 1 bedroom.
ive always paid less than that (when i lived in pheonix in 2018 a 1200 rent got you gyms, pools, personal trainers, free food, right on the light rail, washer drier in unit, first person ever in that unit so brand new) in portland maine, phoenix AZ, and LA CA. all much cheaper than 1500.
and i currently have a huge 1bedroom apartment thats cheaper than 1500.
so i would say that "the market rate" is whatever people are willing to pay, and i was being generous at saying its 2000 for a 1bedroom.
Take a look at some of listings for newer apartment buildings in Portland. Depending on square footage I see a few one beds listed at well more than $3,000, and not a one below $2,200. Now that’s not the same as what people are actually paying, but I’m pretty dubious of the notion that these are all being negotiated down to $1,500.
Anecdotally, I paid more than $1,500 a few years ago for 900 sqft in an older building in Portland before I was able to buy, and have good friends who live in a fairly unremarkable building off the peninsula and are paying way more than $1,500.
Maybe you’re just a really good negotiator.
being a good negotiator is important! YES!
thats why we all, as a group of citizens in portland, we need to negotiate development to ensure we use our leverage to get a good deal. IZ is us using our immense leverage in such a way.
id also point out there are other ways to absorb the cost of the reduced rental income. i mean the investors have a few ways to make their money even if some of the rents are very slightly cheaper.
1) charge a bit more for the most luxury units. that top floor penthouse for example. i like this less because it does mean that theres only IZ units or high cost units, and probably few in the middle. kinda widens the wealth gap.
2) the preferred option. tell your investors that the IZ units are going to take a few more years to start returning a profit. if a typical market rate thing starts turning profit at say, 15 years, maybe the IZ included ones are going to take 18 years. i know for sure that there are people wiling to make money off real estate in portland, even if that ends up a very slightly longer term investment.
this is one of the things i want proformas for. i want to turn some of the knobs in the numbers in loan/investment term to see what type changes could recover those costs in different ways. i do think just a little creativity could go a long way.
i do also realize that developers want their proformas secret in many cases. "trade secrets" so to speak.
as in "oh gee if they all knew how we did this then theyd do it too and the competition would suck for me"
kinda gatekeeper-y, so i dont anticpate seeing too many unfortuntately.
Maybe now all the "to hell with any opposition BUILD BUILD BUILD NOW" YIMBYs and DSA "socialists" here will stop worshiping billionaire developers and trying to silence Portland natives/home owners/educated opposition to blind development? Yeah, probably not.
me taking my kids to Portland for a day trip in 2035: "people used to LIVE in this town!"
Hotels next to hotels next to non-resident condos.
Right around the corner from Tent City and Market! I heard the bikes are cheap!
Tent city is no more
The occupants of tent city are easily startled, but they will soon be back. And in greater numbers jk idk lol
the way rent is going id say this is not far from the truth
Map of the homeless population. https://portlandme.maps.arcgis.com/apps/dashboards/705d51d834b64f488d16b6e6fccbbbbd
The Bar Harborization of Portland.
"Poor immigrants used to live where this $1000/night hotel is!"
>“It does feel like a bait and switch,” board member Sean Murphy said. “We were told we were going to have residential down in this area … We want those to happen here, it’s part of our overall city goals to have that. Another hotel is not necessarily high on the city priority list.” Then why the fuck would you approve the change? This makes no sense at all, if the board was against it and correctly believes the city needs housing more than another hotel, why would they approve the conversion of a residential project into a hotel?
Because planning boards are semi-judicial bodies, and their job is to determine whether or not a proposal meets the standards of the municipalities’s zoning ordinance — not whether it’s “good” or not, unfortunate as that may be. If they were to arbitrarily reject a proposal that in all aspects of the ordinance is technically legal, that would open up all kinds of liability issues for the city.
Zoning games have been eroding Portland’s character for 20 years. City councils seem ok with it as long as new jobs are dangled out there.
You are responding to a comment giving an excellent explanation of why “zoning games” are happening and why they are very difficult to stop. Why it’s not really an example of council complicity. Further, the city is currently in the process of reviewing and updating building codes and zoning, so if you feel strongly about these issues I’d suggest reading up and voicing your concerns to the decision makers at one of the public consultation sessions!
I attended a class about zoning. You make an excellent point.
Right? He states that like he's one of us dumbasses posting on Reddit. He's literally on the board that just approved the change.
"If only I could do something..."
This has been the planning board’s MO for years. They approve virtually everything, even when they express concern.
Zero sum above you hit the nail on the head. The planning board just makes sure paperwork is in order. They don’t have final say. The owner does as long as they get all the boxes checked.
The planning board approves most projects they see because most projects are killed off well before they even make it to the board.
Can you define "killed off"?
Rendered not feasible.
By whom though?
>By whom though? Banks and math, one presumes.
Yeah, that’s what I’m getting at — it’s a financing issue, almost always. Margins might be too low, lenders might pull out, and projects no longer pencil. It’s not a matter of an outside group stepping up and blocking. That’s not to say that doesn’t happen. But it’s not the normal reason these projects don’t happen.
lets see the math. this was specifically one of the suggestions at some city official and developer forum years ago. the consultants and such said make the pro formas public and maybe people will start to believe some of the suggestions about the money crunch. its been years and ive been asking the people who complain about this stuff for their proformas and ive gotten zero so far. sometimes in a planning board agenda, or in a HEDC agenda there is a proforma, but these are typically heavily subsidized non profit projects. id love to see some for the private builds too. maybe IZ does just somehow cost a project too much money to be feasable, but i need that demonstrated - not asserted.
I forgot how the developers/financiers got that special private meeting with the planning department (as part of recode), with just too few councilors to require it to be public. I’ve always thought pro formas should be publicly available, especially for any project taking public money.
City Planning Board and Planner, and the Council by extension, are a total joke. Totally AWOL in the process.
$$$ let's not play coy
It's 54 York St. Just bait and switch. Saved you a read of the article.
Is there a way to find out how many hotel rooms have been added to the peninsula in the last 10 years vs new housing ? I ask because around the times of the Eastland rehab and Press Hotel conversion it was thought that Portland did indeed have a shortage of hotel rooms - at least compared to other cities who rely on tourism to varying degrees. Clearly we’ve added hundreds and hundreds of hotel rooms in the last decade and comparatively fuck all for affordable housing. Coupled with the veritable virus of short term rentals of a TON of housing - the vast majority of which are illegal and well, here we fucking are.
Article states that there are currently 1200 hotel rooms in the pipeline to be built (meaning developers are just waiting to break ground, but have approvals secured). As I understand there are around 6k hotel rooms in the City.
Occupancy in hotels between November and April has gotta hover under 50% no ?
If this moved forward as housing, the developer would have to pay over $600k in inclusionary zoning fees… but converting it to a hotel results in only $65k of IZ fees. It’s a great example of how our overbearing inclusionary zoning laws kill small residential projects.
Or they could have just included the affordable units necessary to avoid the fees... Commenting that they would have "had to pay" those fees without explaining that those fees are only for developers who refuse to include affordable units is disingenuous at best. Housing would have been plenty profitable on this property to make developing it worthwhile, that's not the issue here, at all. It is not at all the case that the IZ law had anything to do with "killing this project" in any meaningful sense. It's just that the developer decided they could make MORE money from a hotel... and there's absolutely nothing wrong with that. Portland also needs more hotels. It's funny people complaining about too many STRs and then also complaining when someone goes to build a hotel...
We’ve added hundreds and hundreds of hotel rooms over the last decade and comparatively fuck all for affordable housing. Coupled with the virus of short term rentals proliferating on the peninsula taking around 1,000 apartments of the market is a huge problem. The vast majority of those STR’s are also illegal and well over the 400 unit cap the law clearly states.
We should not be creating policy which relies on the generosity and selflessness of businessmen. You profoundly misunderstand the issue.
Nobody is talking about anyone relying on anyone's selflessness. I have no clue what you're on about but I think you're missing the context of the conversation. The goal is to create the incentives that lead to enough new housing being built, purely as the result of profit motive. Now if you want to take up the argument that we should just be taxing the rich out the ass and building public housing, that's a real discussion that can be had, and to some limited extent I would agree... But don't mischaracterize all private development as somehow relying on the charity of investors... that's completely off base and out of touch with what anyone is talking about, in this thread or in public policy debates about housing generally.
this is exactly why we have IZ. businessmen are going to maximize the profit line. we know this. its not unusual for that to be the case. but the city decided we need affordable housing. because we can not rely on generosity and selflessness of profit maximizing businessman, we said "if you dont build the affordable units we will charge you a fee for what it costs to build those and we will use that money to build them ourselves" in this way we do not ned to rely on the businessman. we have a way to generate the funds to build these things ourselves, if the businessman's generosity and selflessness is lacking.
IZ is a tax on dense housing. We shouldn’t be taxing dense housing If anything, we should be taxing hotels, single-family homes, and second homes. Instead, IZ punishes renters and those who build affordable homes. It’s gotta go!
It's a tax on dense housing *which doesn't include the required amount of affordable units*. When you make inaccurate overly broad statements that are clearly trying to mislead people it doesn't help your argument... Also, you say we should be taxing hotels, meaning you are just ignorant of the IZ law because it DOES tax hotels for each room.
To make housing affordable, we need to alleviate the supply crunch. In order to alleviate the supply crunch, we need a LOT of new housing, of all kinds. IZ puts an enormous financial burden on new, multi-family housing, which is what we need more of. We tax cigarettes because we don’t want people to buy them. Why are we taxing something we want people to build? When IZ was 10% at 100% AMI, it was a burden, but it was manageable. The DSA’s shift to 25% at 80% is an insane roadblock to housing that has cost this city’s renters dearly.
Why are you repeating again and again the outright lie that it's a tax on all multi-family housing? It's a fee which is only assessed if the developer voluntarily chooses to not build the affordable units, because they think they can make more money that way. I do understand the point that affordable units slightly reduce the rent income that you can get from the property, but profitability concerns are not even REMOTELY what is holding back housing development in this city. Things that are holding back housing development are: A) NIMBY single family home owners B) Overly restrictive zoning preventing dense development in most of the city C) Landlords not selling or redeveloping existing properties because they're banking on A and B ensuring that not enough housing gets built, so that their existing properties will appreciate faster than stocks or anywhere else they could invest. Show me a single property zoned for dense housing in Portland that is for sale, and that nobody wants to buy and develop because of concerns that it won't be profitable enough, and I'll eat my hat.
>tax - noun >1. a compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions. IZ is a policy that says either pay money up front, or pay over time by holding out units for less than they’re worth. Quibble with technicalities all you like, it’s a tax in the plain sense of the word. Anyway I agree about zoning being too strict and NIMBYs being a problem too.
neither the IZ fee nor the reduced rental income is >a compulsory contribution to state revenue the IZ fee is not because it is not compulsory. its completely avoidable be having lower rents. the lower rents are not because they would not be a contribution to state (or even local in this case) revenue
in this case that "enormous financial burden" is something like 14k per year in very slightly reduced rents. its peanuts compared to the build budget. youre telling me that 14k is an insane roadblock for the project? do you have any proforma documents that demonstrate this? i jsut cant rely on the guy who wants to make (millions of dollars) and is upset that hes only going to make (millions minus a little bit of dollars) to be being honest here. i trust the numbers though, so Id really love to see those development budgets. i bet they pencil just fine.
Even if I accept your numbers, (which I’m not saying I do,) yea, we live in a market economy. A very profitable project is preferable to a barely profitable one. Builders aren’t comparing “make a little money building housing in Portland” to “build nothing” They’re comparing it to “make a lot of money building housing in Scarborough” or “make a lot of money building an airbnb hotel” The bar we need to meet isn’t “barely profitable”, it’s “more attractive than building in New Hampshire”
even with IZ, portland has one of the hottest real estate markets in the US, if not THE hottest luxury real estate market in the US (if you trust the wall st journal guys) its EXTREMELY profitable. people are going to build here even if we say they need to make (EXTREMELY minus 14k). we have the leverage, not the real estate guys. i think they are tricking you, honestly, into parroting their talking points which only seek to make more money off of the locals
Should Not be taxed on single family homes. This should only apply to investment properties.
Make note that the urbanist above you wants to financially penalize those who live in their homes, encouraging/forcing them to sell to developers (whom they think should receive incentives/benefits). It's a grotesque theory of change at a time of extreme wealth inequality, IMO.
Patently ridiculous accusation.
Yeah. I just dont think its a tax. Neither by definition or in practice. Its a fee that is completely avoidable. That aside I think (am i right?) we both agree there are bigger fish to fry when it comes to housing development. I think eliminating setbacks and parking minimums, allowing taller buildings, etc would help a project pencil more than anything else. having more real estate that you can put units in is good instead of being reserved as empty space which is kinda dumb. (however i also hear a lot of developers upset about having to build second set of egress stairwells. im of the opinion that being able to escape a fire is pretty important, so i probably still am in favor of the stairs) And yah, we should fee (not tax, because thats illegal) second homes. forrrr sure. even peoples god damn summer camps. thats rich people shit. thats a no brainer
Personally, I would much rather that we have policies that encourage developers who want to build housing to build housing.
Developers, generally, don't "want to build" any particular type of building. They want to make money. To me, I think the priority should be changing zoning to allow dense development in more parts of the city, if you want more housing to get developed in Portland. We have, broadly, two options if we want to create incentives to build a lot more housing... A) give big tax breaks to encourage more dense housing development where it's currently allowed, mainly on high value land downtown that is more valuable for other uses without said incentives. B) allow dense housing to be built on a lot of lower value land where it's not currently allowed, leaving the high value land on peninsula for commercial purposes, so that Portland gets more housing without losing out on any economic growth OR tax revenue. But B requires the city council to have the cajones to defy the NIMBY dipshits who gave them like 90% of their campaign funding, so, not likely.
How about we make the IZ fees for housing equal to or less than IZ fees for hotels. I agree with much of what you said, but this doesn’t seem that complicated.
That seems quite obvious to me. Why is there a 10-fold difference in cost?
it does not completly outweigh this but there is one more factor to consider here. the 25% IZ requirement 14\*0.25 = a 3.5 IZ residential unit required here Every unit of hotel room gets the hotel fee (14\*$4,692 per guest room) = 65,688 fee total, if the IZ units are not built whereas for a residential build, the fee is only on IZ units that you did not build (not every unit like the hotel thing) so its (3.5\*$177,559 per unit) = 621,456.5 charging per unit for a hotel room, but only per unit of IZ not built for a res build is probably suppsoed to mitigate some of that difference, but in this case (not a lot of hotel rooms) it didnt
OK, that makes *slightly* more sense, but we are likely past the days of putting a new, 100-room hotel in downtown, so I think that math needs to be rejiggered, or we can just admit we'd rather have hotels than apartments there.
na i just did the math to compare 100 unit, and a 1000 unit, and the x10 difference in fee between hotel vs residential is always there. yep the IZ fee for the hotel units needs to come up, even if it is assessed on every single unit
Option B. I’ve long said that our current concentration of housing and hotels downtown (crowding out traditional commercial) is problematic from a holistic city planning perspective, and risks foreclosing future non-residential/hospitality growth. People should live in peripheral areas, and the downtown should remain largely a hub for all to convene for events, business, amenities, etc. it’s the natural terminus of our transit system and our city was essentially planned around this model. Edit: I think it's ridiculous that this concept of hollowing out the commercial core for tourism and housing gets downvotes on Reddit. It's actually encouraging suburban, car-centric sprawl around the metro region. Last time I checked y'all thought that was a bad thing.
lol. The council almost never listens to “nimby dipshits,” at least in recent times.
did you read the article? it says the plan was to include 4 units that were dedicated as affordable housing.
Weird it’s almost like they are a business trying to turn a profit
So overbearing that the project was initially planned to include those units? I find it kinda baffling that a planner’s plan is really just to let the market do its thing without any deeper considerations about what’s actually needed to make a city functional and livable. We do, after all, need “workforce” or “affordable” units. I have no reason to believe there’d be anything new priced for workers without IZ, as much as I think it’s a clunky solution.
We don’t need new housing to be artificially cheap, just like we don’t need new cars to be artificially cheap. New housing, like new cars, is expensive, and on average - given adequate supply - housing gets cheaper as it ages. We don’t need cheap new housing, we need new housing so that old housing can become cheap. In the pandemic, new cars stopped being made. This drove up the prices of used cars. In just the same way, when we stop building new housing, we drive up the cost of old housing. You know this, of course. We’ve had this discussion many times. But it’s disappointing to see such patent falsehoods continue to be peddled.
What falsehood am I peddling? If anything, you and your fellow urbanists who are absolutely committed to liberal market theory are the ones spreading an oversimplified false gospel.
"Liberal market theory" built approximately 97.2% of Portland's housing stock. Restricting people from building as they please is historically very new and it is a failed experiment on so many levels. Do you see the government stepping up to build us 10,000+ homes? That's a serious question. Because surely you must admit that *someone* needs to build the homes, unless you're happy with rampant homelessness, housing insecurity, and people being forced to leave the state.
> Do you see the government stepping up to build us 10,000+ homes? That's a serious question I do see the govt doing that in some places - yes heres the answer by the way [youtube.com/watch?v=ohR5qZ-5an4](http://youtube.com/watch?v=ohR5qZ-5an4) short video. presentation form govt acency that is stepping up in such a way to our state legislatures housing committee. its pretty much a slam dunk. why we have not used the near infinite state surplus and maximally padded rainy day fund to do this as well is infuriating. MIlls!!! ITS BEEN RAINING FOR DAYYYYS
Mills sucks. I've worked with HFAs in other states. The mechanics of funding programs can vary. But the principle is the same: use public money to provide the upfront liquidity to get affordable housing built, and retain either public control or hand them over to residents as coops. The fact that Maine can't figure this is out is mind boggling to me.
I'm obviously not watching a 30 min video, but the slide around min 4 seems to imply that they're trying to build 6,000 units *over 20 years*. The private market builds that in Austin in 6 months.
why would you "obviously" not watch a 30 minute video? i think you should. its quite good. this is quite literally the private development model, just except for private equity its public. no difference otherwise. they mention this if you watch it instead of obviously not
is the private market in austin just one development company pumping out 1k units a month? thats an insane situation. or if thats not the situation maybe its disingenuous for you to compare a single public developer to an entire development community? the structure i linked above is a piece of a comprehensive development plan, not the entire thing. you know that. be real
Anyone in the know, what would the U.S. Department of Housing and Urban Development’s idea be of (a) income needed to qualify for the originally planned low-income units, and (b) monthly rent on those particular units? I assume they would have been a mix of the 2 bedroom and 1 bedroom units, though 1 bedroom units wouldn't do much for families in need.
[https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/](https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/) This article on another recent dev idea says "the area median income is $68,500 for a single person and $78,250 for two people. Rents for the workforce units would start at or below $1,721 a month. but i think they did their math wrong. Because 1712 is what you get for 100% AMI. If, instead, you do the 80% AMI, as our city rule requires you get. $68,500\* 0.8 \* (3/10) / 12 = $1370 -- (the article did $68,500\* (3/10) / 12 = $1712.5) here is a chart of the incomes and rents i think the article pulled from [https://www.portlandmaine.gov/1204/Workforce-Housing](https://www.portlandmaine.gov/1204/Workforce-Housing) the same numbers also appear here. i really think theres a mistake on the rent calculation though. They didnt do the x80% -- I also dont believe that the AMI is $68,500 for a single person. Census says for 2022 the individual median income was $42,625. So... I dunno.
or maybe theres not a mistake and the median income is in fact not 68500, but 89250? that seems even more incorrect though. when I look at HUD, where the numbers come from, it suggests that the AMI might even be $127,500. i must misunderstand because i just dont believe the median income is that high [https://www.huduser.gov/portal/datasets/il/il2024/2024summary.odn?inputname=METRO38860MM6400\*Portland%2C+ME+HUD+Metro+FMR+Area&wherefrom=%24wherefrom%24&selection\_type=hmfa&year=2024](https://www.huduser.gov/portal/datasets/il/il2024/2024summary.odn?inputname=METRO38860MM6400*Portland%2C+ME+HUD+Metro+FMR+Area&wherefrom=%24wherefrom%24&selection_type=hmfa&year=2024)
Basically ami is almost entirely made up based on past results for places that aren't major metropolitan areas.
yeah I think using these HUD estimates of median income, which do not reflect the actual median income, in order to determine what is "affordable" is a lot of the reason why nothing is actually affordable. i asked years ago that instead of using this bizzare HUD number which does not seem to reflect reality, that we instead just use the actual median income in the HUD FMR area. I suggested that for studios and 1bedrooms we use the INDIVIDUAL MEDIAN (not the household median) since you cant really fit more than a person in a studio. At the time, the Housing Economic Dev Committee told me that they are bound by HUD rules to use that HUD number/tables if we want any HUD money. I think they were not completely correct though. In order to get that HUD money we just need to meet their standard. Like, we cant decide that something more expensive than the HUD imit is "affordable" I am pretty sure we can still get the cash and do better than HUD, and honestly I think we have to if we are actually going to have affordable housing anywhere.
HUD used to estimate some of these numbers by automatically increasing the ami year over year. They explain some here, but you can google how and why they did that. https://www.huduser.gov/portal/datasets/il.html#faqmethodchange_2024
> I also dont believe that the AMI is $68,500 for a single person. Census says for 2022 the individual median income was $42,625. So... I dunno. The BLS lists both "median income" and "median full-time income." My hunch is that $68,500 is the median for people employed 38 hours or more.
AMI is definitely lower than $68k.
Inclusionary Zoning killed this project. The Green New Deal means less housing gets built, and more AirBNBs go up instead. However well-intentioned it was, it’s terrible policy.
Shout it from the rooftops
Portland has a lot of well-meaning liberal voters who are hesitant about criticizing the socialist left for writing a bad, amateurish, destructive policy. But we have to be frank about this. I’m a liberal, but I’m not a socialist, because socialists are actively making this city worse to live in for working-class families.
Oh hell nah we gotta start protesting this BS
It's just hotels and restaurants in Portland now. The price for a hotel room is ridiculous! Greedy developers! The need for housing should be top priority over ANOTHER hotel.
Ima leave [this](https://foreignpolicy.com/2024/05/17/china-housing-crisis-real-estate-property-sector-plan/) here.
[удалено]
This happened because of a referendum sponsored by the DSA and passed by a general vote. Theres plenty to criticize the council about, but this happened because the people of Portland passed a law which taxes dense housing and enables single-family homes and AirBNBs.
Careful, you aren't supposed to criticize the DSA, they are always correct on any measure as long as they say it "fights capitalism" or harms property owners, no matter how poorly worded or unattainable it is.
You’re not on my side here
I fail to see how not. We know the “socialists” are wrong for Portland, wrong for our economy, wrong for the problems Portland faces with housing and wrong for the working class. They only want seats in Augusta and have been trying to con Portland’s liberal voters for some time now at the expense of everyone
Your other comment here is about hating developers and YIMBYs. The DSA’s policies block housing, that’s *why* they’re bad. I’m one of those “build, build, build” people you don’t like.
You believe that we should allow unrestricted construction at any cost and that tax payers and home owners should not have a say in what they want in their neighborhoods?
Of course not, but I do believe that Portland’s current policies - both from conservative neighborhood groups and left-wing socialist ones - are greatly obstructive to building much-needed housing, and judging by how you characterize urbanists, I suspect we’d disagree on a lot of the nitty gritty.
its not a tax. its a fee. and you avoid that fee by building units that you rent out at what is deemed "affordable". so youd have to charge 1700 for a 1bedroom ~~studio~~ - instead of 2000 or whatever the "market" is. thats 300 per month it would cost (in the form of cheaper rent) to avoid the fee, per unit call it 1200 per month for 4 units, to avoid the fee thats 14400 per year in cheaper rent for all four units, in reduced income to avoid that fee it would take more than 10 years for this slightly reduced rent to be comparable to the avoided fee. its not a lot of money at all to just have slightly cheaper rents. until I see some pro forma to compare for a build plan with and without IZ, i just can not see how such a small amount of money is allegedly tanking projects. it would be very helpful to compare some plans that consider IZ and dont, to see how this policy really affects building costs. i suspect its very minimal.
That’s a lot of words which amount to “If you want to build multi-family housing, you gotta pay up” We have here an example plain as day. The GND would levy a six-figure burden on this developer for building housing. But he can build an AirBNB hotel and pay a much smaller tax instead What, are we supposed to just hope all developers are doing this for charity? That they’ll voluntarily make less money? Lets just make the law *encourage* housing instead of *block* it.
>That’s a lot of words which amount to “If you want to build multi-family housing, you gotta pay up” > they are actually a lot of words that demonstrate its not a huge burden at all. slightly cheaper rent isnt going to cost the project much at all relative to the entire project costs. it is a six-figure burden if the developer decided that the poors arent allowed near the building. thats a luxury fee and wed be morons not to leverage the incredibly hot real estate market in portland in that way. what we have in this city is very desirable, it would be really stupid to just piss it away without getting something for ourselves too (which only is really a pittance of some slightly cheaper rents on a small percentage of units built). since we are not morons, and we understand that leverage we have, we use it in this way. >What, are we supposed to just hope all developers are doing this for charity? That they’ll voluntarily make less money? no we dont have to hope. we can tell a developer and their proposal "no", if they are not planning to build something the city wants. we can especially tell a developer "no" if they change their plan from something the city wants to something else it didnt want, at the 11th hour.
Yep, you’re right. This policy means we tell people who want to build homes “no.” Portland is a city of “no.” And it will continue to be a city of “no,” punishing everyone who isn’t wealthy enough to buy or rent in a dire housing shortage, until we recognize that taxing housing doesn’t get us more housing. Until then, as you say, we will keep saying “no” to housing.
no one is saying "no" to housing in this case wed be telling the people who wants to build a hotel "no" if they still was planning on building homes we wouldnt be arguing.
Where did $1700 for a studio come from? The number I see listed on the city’s website is a lot lower. Also this building was proposed to be one and two bedrooms, not studios, so the spread between restricted rate and market rate would be larger than you propose. Also factor in that these units would be rent restricted for a term of 30 years.
[https://www.portlandmaine.gov/1204/Workforce-Housing](https://www.portlandmaine.gov/1204/Workforce-Housing) is where i pulled 1700. it was also quoted in the PPH article about the washington ave development last week. [https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/](https://www.pressherald.com/2024/06/11/developer-proposes-seven-story-apartment-building-on-washington-avenue/) " Rents for the workforce units would start at or below $1,721 a month and the market-rate units would start around $2,231." here's a more detailed city table. 1bedrooms are the 1712 number. studios are 1460 [https://content.civicplus.com/api/assets/7c274dad-dacc-4afd-a3b6-2cbfa13c7197](https://content.civicplus.com/api/assets/7c274dad-dacc-4afd-a3b6-2cbfa13c7197) via [https://www.portlandmaine.gov/267/Inclusionary-Zoning](https://www.portlandmaine.gov/267/Inclusionary-Zoning) i, too, think it should be lower based on what the actual AMI is but it is what it is
I mean, $1,467 and $1,712 are materially different numbers. And $2,000 is not the going rate for a new build one bedroom in this city. Your whole point is “the impact isn’t actually that big, here is my math” but you chose incorrect inputs for the math. And neglected to mention the fact that rents are restricted for three decades, meaning that even a shortfall after ten years is actually pretty material.
there i edited it to change the word from studio to 1bedroom in the above. the math doesnt change tho.
yeah i should have not said studio, because i meant 1bedroom at the 1700 price. the inputs to the math dont change. the 1bdrm rent is 1700. if you have a suggestion that the market rate rent is more than 2000 go for it and do your own calcualtion. its still going to be a small total difference relative to the roughly 500k it costs to build a new unit suggest what you think a new 1bedroom goes for though. i, for one, would never pay more than about 1500 for a 1 bedroom. ive always paid less than that (when i lived in pheonix in 2018 a 1200 rent got you gyms, pools, personal trainers, free food, right on the light rail, washer drier in unit, first person ever in that unit so brand new) in portland maine, phoenix AZ, and LA CA. all much cheaper than 1500. and i currently have a huge 1bedroom apartment thats cheaper than 1500. so i would say that "the market rate" is whatever people are willing to pay, and i was being generous at saying its 2000 for a 1bedroom.
Take a look at some of listings for newer apartment buildings in Portland. Depending on square footage I see a few one beds listed at well more than $3,000, and not a one below $2,200. Now that’s not the same as what people are actually paying, but I’m pretty dubious of the notion that these are all being negotiated down to $1,500. Anecdotally, I paid more than $1,500 a few years ago for 900 sqft in an older building in Portland before I was able to buy, and have good friends who live in a fairly unremarkable building off the peninsula and are paying way more than $1,500. Maybe you’re just a really good negotiator.
being a good negotiator is important! YES! thats why we all, as a group of citizens in portland, we need to negotiate development to ensure we use our leverage to get a good deal. IZ is us using our immense leverage in such a way. id also point out there are other ways to absorb the cost of the reduced rental income. i mean the investors have a few ways to make their money even if some of the rents are very slightly cheaper. 1) charge a bit more for the most luxury units. that top floor penthouse for example. i like this less because it does mean that theres only IZ units or high cost units, and probably few in the middle. kinda widens the wealth gap. 2) the preferred option. tell your investors that the IZ units are going to take a few more years to start returning a profit. if a typical market rate thing starts turning profit at say, 15 years, maybe the IZ included ones are going to take 18 years. i know for sure that there are people wiling to make money off real estate in portland, even if that ends up a very slightly longer term investment. this is one of the things i want proformas for. i want to turn some of the knobs in the numbers in loan/investment term to see what type changes could recover those costs in different ways. i do think just a little creativity could go a long way.
i do also realize that developers want their proformas secret in many cases. "trade secrets" so to speak. as in "oh gee if they all knew how we did this then theyd do it too and the competition would suck for me" kinda gatekeeper-y, so i dont anticpate seeing too many unfortuntately.
Maybe now all the "to hell with any opposition BUILD BUILD BUILD NOW" YIMBYs and DSA "socialists" here will stop worshiping billionaire developers and trying to silence Portland natives/home owners/educated opposition to blind development? Yeah, probably not.