BY BRIAN LIBBY
This Friday the Cascadia chapter of the US Green Building Council is hosting the The 2012 Build Small | Live Large Housing Summit, gathering leaders in the development, real estate, building and design sector from across the region for an intensive day of inspiration, project case studies and peer-to-peer learning. This one-day housing summit will challenge architects, developers, builders, remodelers, urban designers, policy makers and real estate professionals to craft strategies for the growing small-house market.
Recently one of the summit's scheduled speakers, Jenelle Isaacson of Portland's Living Room Realtors, discussed our changing local housing market.
Portland Architecture: Has the market really come back?
Isaacson: Oh definitely. The market has really heated up. We’ve done double the business in six months than the year previous. It’s palatable to sell if they bought in 2007, 2008, or with the benefits out there it’s worth selling and taking on. Interest rates are at three and a half percent. That’s really low.
What do you see as the lasting change after the housing boom and the recession?
I think that real estate for me didn’t go away. There are always still people needing to move. It just drastically shifted. The biggest thing I noticed was that people started having a lot more serious discussions about sustainability. Not so much, ‘Let’s green it up.’ More like, ‘What can we sustain financially and what makes sense? People were looking for more meaning inside their living situations. When the market dropped out, for a long time the dominant conversation was, ‘Will this appreciate? Is it a good investment?’ It was all about the home as an asset.
When the market shifted, the discussion shifted away from that. If it’s not a vehicle for making money, it’s just a house. Community and lifestyle became even more important in the minds of our clients. A lot of that was reflected in where people wanted to live: denser urban neighborhoods. The market fell out for us out past 82nd Avenue, for example. People wanted to stay in neighborhoods like Alberta, Clinton, and Alameda. It’s so cool in Portland: people here are their neighborhoods. It’s a reflection of who they are. It’s not somewhere they’ll be for the short term. And all of a sudden it became normal habit that they’d want to know if a property has mother-in-law quarters or an accessory dwelling unit. So if we had a crisis again, the thinking was, you could move into the small part and generate more rental income, or bring your parents in.
Do you see accessory dwelling units as a growing trend?
Yes and no. The city waved their system development charges for adus last year, making it easier to happen. But unfortunately there's no financing available. The only way is you have the cash or you are able to pull the equity out of your home. Lines of credit went away. There is a demand for it, but people have no way to buy them. People aren’t able to do it enough. But I’m hoping somebody will come out with a loan product to build these adus. They cost about on average in urban areas about $125,000 to build. In mortgage terms I think that’s about $675, and current rents on an adu in an urban neighborhood, you’re probably looking at close to $1200 or $1300 per month in rent. There’s a lot of incentive to do it. You could make $500 additional a month.
What do you make of the current controversy over several apartment buildings being built without parking in places like the Beaumont neighborhood or on Southeast Division?
In my experience it’s incredibly difficult to sell a project that doesn’t have parking. People still want a parking space. Nine times out of ten I’d say that was a deal breaker. It’s tempting to encourage more growth of developments without cars, but I don’t know if it’s palatable to sell. But many of these are rentals. Some of those neighborhoods don’t have parking, or a driveway. If people in houses have to compete with people in dense apartments for parking spaces, it will probably affect the value of the home. Parking’s already tough in the neighborhood.
My friends in San Francisco pay $800 a month to park a car. I don’t think anyone wants that. That’s what’s hard about urban growth. We want it denser but we still want to have room to park our Subarus and get in and go to the beach. I think people move here because it’s not a big city. It has all the amenities. You get that perfect twist of both. But we need housing. Nobody has been building for the last few years and people are moving here. There’s a study saying Portland is the #2 place poepole move to after college after Louisville. As an Oregon native, I take pride in that.