A Pilgrimmage to the Central City? Depends On How You Look At It

Yesterday, seeking to better understand the demand for high-density housing in the central city after learning of record condo sales in South Waterfront at The John Ross, I had a conversation with professor Gerard Mildner of Portland State University's Toulan School of Urban Studies and Planning. Mildner, whose research is focused in part on growth management, housing markets and land use regulation, surprised me with his analysis of Portland’s population growth.

First, he dispelled what is a commonly held myth that I’ve long taken as gospel. “Despite all the discussion about revitalizing central cities,” Mildner said, “these areas are not growing faster than the suburbs. In America the central city’s percentage share of metropolitan area populations, is continuing to decline.” Mildner cited a Harvard University study of 96 metropolitan areas during the 1990s in which only three were found to be growing faster in the center of the city than in outlying areas—and Portland wasn’t one of those three.

Mildner is also skeptical of recent news that South Waterfront condo project The John Ross saw 80 percent of its units reserved in the first six days.

“It may be that they created something of an artificial hysteria by saying, ‘Only on this day can you reserve units.’ Otherwise it just doesn’t make any sense to me,” Mildner said. “If they really had this excess of buyers, why didn’t they price it higher? Maybe they made a pricing error, or maybe they were looking to push this story that it filled up so fast.” The professor cited South Waterfront developers’ need to create hype and momentum for future projects in the neighborhood as motivation for exaggerating the demand for these properties.

Although I think Mildner may be unfairly belittling the real demand there is for high-density condos in the central city, I do have to confess that I and many others have perhaps mistakenly assumed that there is an exodus of suburbanites to the city proper. On the contrary, there suburbs are growing more—or at least more people are moving there—than downtown and its immediate Portland environs.

At the same time, though, population figures are only part of the story. One could argue that the suburbs are growing faster simply because there’s so much more wasted space there to take advantage of.

Yet Mildner’s point is an important one, reminding us that what’s happening is not a population shift so much as a demographic shift. If the overall population isn’t increasing more near the central city, we are at least seeing a very significant infusion of middle class and affluent residents. Demand for property here is rising, and they’re the ones who can afford it. They are coming, I think, because of the increasing attractiveness of urban life. That has a downside, of course, in gentrification—communities of people forced to leave neighborhoods they’ve called home for generations. But the upward pricing of urban life is a sign that the product here, in the central city, is a good one.

Urban settings oriented towards pedestrians and mass transit rather than just cars and freeways are an increasingly attractive alternative to suburbs’ oppressive traffic seas of ugly surface parking lots. It’s not to say suburbs don’t have their good side too, with their greater affordability and far more space per person. But the dark days of the 1960s and 70s, when urban life was plagued by crime and decay, are long gone.

That, to me, is a big part of why units in The John Ross are going fast.

Comments

[Cab]

Brian, You may want to sit down with another "Professor" and get the other side. Mildner is known to slide in his personal bias into his work. He is in the John Charles mold. Not saying he is a bad professor or anything, just one sided. He's not exactly a fan of density, smart growth or even mass transit all needed factors for any self respecting city.

[Brian]

Good point. I sensed Mildner leaned right, which as an admitted liberal I'm wary of. But the population trends he cited had a Harvard pedigree behind them. I remain 100% pro-density, but I also think it's good to keep the overall population trends in perspective.

[NLP2P]

I am really disappointed with Mildner's assessment. He basically set up a straw man for you and knocked it down; namely, the concept that Portland is growing faster than the suburbs. I doubt any liberal or independent urban planning or real estate analyst has made that statement. It would be IMPOSSIBLE, based on developable land, percent share of the region's space and people, and defies national trends. The real issue is not that it's beating suburbs, but that the inflow is more than it has been in decades.

Next and Finally, it is NOT in the interest of the John Ross investors to promote sales that don't exist in order to hype the neighborhood. They want to sell THEIR units. I know a few, and they are not invested in the rest of the neighborhood. Saying you're nearly sold out when you're not would be moronic. I also know someone at SKB who reports the same figures. Fact is, market research has been done to show that even with the development of the past 7-8 years, Portland is only halfway to meeting the 14K unit expansion for which there is demand.

[Brian]

Hey, I'm with you. I think it's great that the John Ross has sold well, and I think the developers have done a good job, all things considered, in the South Waterfront neighborhood.

That said, I don't think it hurts to hear what somebody like Professor Mildner has to say and just put it out there. As long as it's civilized, I think it doesn't hurt to stimulate debate.

[justin]

I agree with you Brian. It's good to offer another point of view. To me, it gives your blog more credibility when you are willing to recognize a competing argument... something other bloggers ("cough cough" jack bog "cough") don't seem willing to do.

If the cities aren't growing, then what is spurring this new development. I guess this supports the theory, that the suburbs are going to become the new ghettos.

[Brian]

I think what's happening is that both the suburbs and the central city are growing in most metro areas. The US population keeps rising. It's just that there is more developable land in the suburbs, and only some Americans have bought into the concepts of higher density, pedestrian access and mass transit -- sustainable communities, that is. Living in the central part of Portland we have it good. So good, in fact, that it's easy to get ahead of ourselves and assume everybody feels like we do. But there are lots of people in Gresham, Beaverton and Tigard who think that we're plagued by crime and squashed together like sardines. I think they're wrong, but hey, you can't change their minds overnight.

[Ray]

Keep in mind that some of us have chosen to move close to one of the Regional Centers of the 2040 Metro Plan. I chose Greshan City Center to be close to family. I have easy walking access to resturants, churches, shopping, a library, a movie house, parks, trails, MAX, a farmers market, and local events. Some have decided to support the ends of the spokes (Hillsboro, Gresham, Oregon City). I like the concept of being our own hub.

Portland is growing everywhere, and its happening faster than was predicted. But it least, we had the foresight to see it coming at us. We just judged the speed wrong.

And look what our growth have not taken away: our farmers, our breathable air; our drinkable water; and our ability to enjoy each other and say "Hi" now and then.

And alot of central cities are not growing in America. I believe I heard a recent study that still have most central cities unable to break even.

Ray

[cab]

I also think there are a lot of Suburbanites who would love to live in a walkable high density neighborhood, but just can't afford it. You get way more for you money in the Burbs. As the growth boundry fills hopefully the price difference will even out a little.

I also think it takes much longer to produce highdensity housing in the city then it does throwing up a few houses on a green field. The John Ross will take 2 and half years to build for 280 units of houseing. You could build that many houses in a few months.

[Ray]

Yes cab the time it takes is longer. But no significant architecture is done fast. At least not as fast as the cookie cutter burbs can seem to be. The Street of Dreams developments are done in one year, and that is pushing it. The development in Wilsonville at the former Dammasch State Hospital has been years in the making (starts and stops).

Ray

[Chris McMullen]

If urban areas like the Pearl and South Waterfront are in such high demand, why do they need to be subsidized?

Why couldn't SoWa have beed sold to and developed by the highest bidder?

The PDC has stated: "...Without it, PDC studies show that developers could not be persuaded to build housing downtown or in urban renewal areas..."
from here:

http://www.portlandtribune.com/archview.cgi?id=18913

The hype surrounding the John Ross and The Pearl is a perfect case for arguing that no subsidies should go to these areas.

Is the PDC wrong, lying or both?

[Mike Pullen]

One reason why Prof. Mildner is correct about suburban population growth outpacing cities' is children. Most families with young kids can't afford to live in central Portland. Randy Gragg recently profiled the lack of kids in the Pearl District. Does anyone know if South Waterfront planners and developers expect that new community to have more kids? I have heard that the first residential units will be market rate (i.e. expensive), while affordable housing units will come last, since they don't generate funds for urban renewal improvements.

[Justin]

Actually, one interesting thing you've mentioned is the myth about gentrification. There have been several studies recently in the past year or so that have found that poorer residents are either more likely to stick around as a neighborhood gentrifies (due to many factors of the improving neighborhood), or the turnover rate for renters stays the same - but means they would just be replaced by higher-income residents.

I found these articles on planetizen.com by searching for 'gentrification.'

Of course, there are extreme examples where the poor ARE heavily impacted - but I don't htink this has really happend in Portland, has it? Nobody was really living in the Pearl prior to its' boom - and I never remeber there being any housing in South Waterfront.

The land price increases of the neighborhoods in and around the CBD will (hopefully)- spure landowners to develop their properties to a higher potential than just surface parking lots that will - as in the Pearl - help create a more solid neighborhood and market for the condos and retail space.

Well, here's hoping!

[Justin]

I think there are a couple of reasons that there is such a high demand for those John Ross condos - and others in the Pearl and SoWa.

Over the last 50 years, there wasn't a lot of high-density development in the US: just the opposite, in fact, fueled primarily by national policies and institutions, such as the Interstate Freeway system, Fannie & Freddie housing mortgage institutions to make sure every American can own their own home (aka, single-family detached dwelling, NOT apartment, condo, or loft!)

These policies created a huge pool of super-duper cheap housing that an entire baby boomer generation grew up in. I think it really set people's expectations that to be an American is to live in the suburbs. Decay of the inner city, race riots, and disinvestment didn't help either - the businesses just followed people to the burbs.

What we're seeing now is like a slingshot effect: housing prices have risen in the central city, coupled by a loosening of the policies & institutions to promote detached housing ownership. This has kind of let the lid off of the pot, so to speak, and we are just now seeing an insane demand for this type of housing.

However, we aren't bringing enough of these kinds of housing onto the market at a fast enough rate - this is why Manhattan & San Fran are so ridiculously expensive - the restricting of housing supply. Well, America's population is rapidly increasing, and foreigners are also snatching up properties here for investment purposes.

I think we need a much more diverse housing mix - mixed use & high rises in the burbs, rowhouses, whatever - don't only build single family houses & condo towers, because it's not what everyone wants. There are many people who will pay through the roof to get the lifestyle they want.

[scott partee]

I, too, favor higher densities (and grids) to make city life better. But one of the main problems I have with all this "new urban" Central City development is the fact that it is, in essence, creating Theme Park cities. There won't be families in these areas, as these developments cater largely to the affluent (as in single or young couples with two incomes and no children), the unrooted/nomadic and the trendy, who won't put in any effort toward the long term.

I'm not sure what solutions would help, as I'm not an urban designer/city planning expert, but I can look to regions of cities that have followed this path and see the results of the current thinking.

I should dig up the link, but I recently read an article about this in which the urban design expert said that it would be far better for a city to focus on developing for the stable middle classes (people with children, working families, individuals with "working class" incomes) because, historically, those concentrations have been what made great cities (think: Chicago, NYC & c prior to the "new urban" movement).