Why Is It So Hard To Build Affordable Housing In Portland?

John Triplett's picture
Why is it so hard to build affordable housing in Portland, Oregon asks Guardian Real Estate Services president Tom Brenneke

A leader in the Portland affordable housing industry talks about why it took four years to get 40 units of affordable housing done from concept to opening.

By John Triplett

Rental Housing Journal

Tom Brenneke has a passion for building affordable housing in the community where he lives and is proud to talk about his latest 40-unit project when recently opened – a triumph of affordable housing.

“I have a particular passion for affordable housing,” said Brenneke, who is president of Guardian Real Estate Services LLC. “I enjoy the complexities,” he said in an interview with Rental Housing Journal.

“We are a housing organization that runs the range from very low income to market rate. We have the highest priced housing in town that we operate and the lowest priced housing in town. In terms of affordable housing, I enjoy the complexities, I enjoy the mission. It is a very high barrier to entry business. So it is what has distinguished us in the marketplace as a developer and operator. We love the concept of intergenerational housing. I think that’s a winner,” he said.

Brenneke was discussing his most recent affordable housing project, the NAYA (Native American Youth and Family Center) Generations, in Portland’s Lents neighborhood.

“At a time when affordable housing is a particularly controversial subject in Portland, we’re especially proud to launch NAYA Generations. This is more than housing, it is a true community that promotes stability, collaboration and caring relationships,” he said.

How did this all get started?

There is a project in Portland called Bridge Meadows, 36 units of intergenerational and foster family housing and “we developed that for the Bridge Meadows organization,” he said. “This is how it kind of all started. They had an idea and we brought all the development expertise, we created the green project for them and it worked out great. That was in 2010.

“After completion of that project, the NAYA group (Native American Youth and Family Center) approached us, took a look at Bridge Meadows, and said, ‘We want one of these for us’ – and I said, “Sure.”

“So that is what we do. We take those kinds of wishes, wants and challenges” and turn them into a project like this.

“We started looking for a site and connected with a city commissioner, Dan Saltzman, who helped us locate and acquire an old public school site in a neighborhood called Lents in Portland.”  It is one of the poorer neighborhoods in Portland.

Frustrations of getting the deal done

Why is it so hard to build affordable housing in Portland Oregon?

NAYA Generations apartments exteior photos © Cathy Cheney

Getting the deal done between the Portland Public School district, the city, which are separate entities completely was frustrating.

  “It was piece of work. We ended up with a complicated master lease of the land, indirectly, from Portland Public Schools. The lease passes through the city and it goes to us.”

Many of us do not know the foster system – it’s tragic

“When you couple of the intergenerational concept with both Bridge Meadows and now NAYA Generations, it especially helps the foster families. We all love seniors. But many of us do not know or understand the foster system.  And it’s tragic. And it’s not just Portland, Oregon, but everywhere.

“So if you look at projects like Bridge Meadows and NAYA Generations, Bridge Meadows focused on the adoption process so if you were living in Bridge Meadows as a foster family you got a break on your rent, but you had to agree to adopt up to three children in five years. We don’t have that at NAYA Generations. But we have a disproportionately high number of Native Americans in the foster system. So there is a preference there. 

“I have a passion for the children. The foster system. And affordable housing at the end of the day,” Brenneke said.

Naya Generations was developed as an intergenerational, cooperative community that supports families of foster children. Residents can contribute to this collaborative community in a variety of ways, including teaching cultural values and history, indigenous storytelling, being a mentor and more.

“NAYA services Portland’s urban Indian population in many vital ways, from our precious youth to our respected elders, “Paul Lumley, NAYA executive director, said in a release. “We are blessed to have this culturally specific inter-generational housing that was made possible through this unique partnership.”

The units range from one bedroom to four bedrooms depending on family size. The mission was to address the over-representation of Native American youth in the foster care system.

Why is it so hard to build affordable housing in Portland Oregon?

Kitchen in Naya Generations apartments photos © Cathy Cheney

Gentrification is the buzz word

The Lents district historically is the lowest priced housing in Portland. “Guess what’s happening.  In East Portland suddenly you get people going out and buying $250,000 starter-type homes, putting $50,000 in them, and flipping them for $400,000.” Brenneke said, “That is what is going on in that area. But gentrification is a concern. It makes the demands for affordability even higher.

“These developers and these landlords. I am one of them who is acquiring buildings – substandard buildings - and putting them in good condition. And charging market rates. I do not have a problem with that.  We see people living in squalor. Is that fair? Reasonable? No.

“It certainly makes the demand for affordability even higher. We are seeing just huge demand for affordability here.”

Why is it so hard to build affordable housing in Portland, Oregon like this apartment at NAYA Generations?

I would not blame the landlords- but some are doing “dumb stuff”

“I blame some landlords because some landlords are doing dumb stuff. When you go into the middle of a school year in a building full of low-income households full of kids and you double the rent – that’s dumb stuff.  You can do it. It’s just insensitive. It’s just dumb. You just don’t do that.  A good landlord would not do that.

“He might put them on a path to essentially improving their units and gradually increasing their rent over time or giving them lots of notice,” he said. “And, voluntarily paying relocation fees. We’ve done that before.

“The other dumb thing these landlords do, is they go in and clear the whole building out with no-cause notice evictions. That’s hard. I have mixed feelings about that. Once again – would you do that in the middle of a school year? No. But if you give them six-months notice – six months from now I am going to ask you to vacate your unit. I am going to give you the opportunity to transfer to a new unit. We are going to put your unit in market-standard condition and charge a market price for it. And I’m ok with that. It puts more burden on our city to figure out affordability.  It offers opportunity for groups like ours to create affordable housing but it’s the market and the way the market works.”

Government getting in the way or our business

“Unfortunately, our city and our government is kind of getting in the way of our business now.

 “Things like rent control. Those kind of things being floated. Inclusionary zoning. Those kinds of things are going to put a damper on the market and hurt us and at the end of the day hurt affordability,” he said.

Four years to produce 40 units of affordable housing, really?

Brenneke discussed the difficulty, the barriers and the time it takes to produce affordable housing as a reason more is not getting built.

“It takes nine months to get a permit here. On the NAYA Generations project I bet we were four plus years from the conversation I had with the executive director to opening the front door on this thing. I was an honest four years.

The construction process is the easy part. That’s a year. We know that. But if you back it up from there, it’s four years.

He said in the case of NAYA Generations they were working on affordable housing in an area that is not even in what is called a design review district. “Those districts can be found in some of the nicer areas of Portland – closer in areas, Pearl district, in those areas you are going to see a design review process where we go through a commission of six or eight volunteer types – architects – that are going to critique your project. And I bet that process can easily take a year or two on its own. You have to sit there and hear commissioners give you conflicting signals on your own project. That is slowing the whole system down here. And God help you if you are in an historic district.”

Challenges of affordable housing in Portland

“I do these grand openings,” Brenneke said in summary.

“I stand on the podium and thank all the people.  This is 40 units. Why is this such a difficult thing?

“This is something we ought to be producing every day or every month – not a once every four years event. Why is it so damn difficult?”

And that is another story at some point. 

Tom Brenneke of Guardian Real Estate Services asks why is it so hard to build affordable housing in Portland Oregon?

Tom Brenneke at Naya Generations apartments dedication photo © Cathy Cheney

About Guardian Real Estate Services

Locally owned and operated out of Portland, Oregon, for more than 40 years, Guardian Real Estate Services has evolved into a leading management, development and investment firm in the Pacific Northwest. Defined by a deep commitment to the communities in which it invests, Guardian continues to advocate for housing across the entire spectrum.

About NAYA

Founded by the community, for the community, NAYA is a family of numerous tribes and voices who are rooted in sustaining tradition and building cultural wealth. The organization provides culturally-specific programs and services that guide people in the direction of personal success and balance through cultural empowerment. Find out more here.

Resources:

NAYA Generations affordable housing

Guardian Real Estate Services

Bridge Meadows affordable housing

Lents Neighborhood Association

Five myths about gentrification

Portland’s Pearl District

NAYA Family Center

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