DOWNTOWN PORTLAND, OR
CLEAN & SAFE DISTRICT

Report shows record construction downtown

Housing affordability remains a challenge citywide


May 21, 2018
Portland, Ore. – Today, Downtown Clean & Safe released its 2018 Development/Redevelopment Report. The annual report, which began more than 15 years ago, shows there are 48 active construction projects in the Central City, a record number that tops last year’s 45 projects.
 
For this report, the Central City is defined as downtown Portland, West End, University District, River District, South Waterfront on the west side of the Willamette River, Central Eastside and Lloyd District on the east side of the river.
 
“Seeing continued investment and growth across the Central City is encouraging,” said Peter Andrews, vice president of Melvin Mark Brokerage and chair of the Downtown Clean & Safe board of directors. “This report is a critical reminder that downtown Portland is a vibrant, thriving place to live, work and play, but there is still work to do when it comes to housing affordability throughout the city.”
 
Hotel development remains strong, with approximately 1,756 rooms added in the last five years. In addition to the three recently completed hotels, there are nine projects under construction in the Central City, which will add 1,500 more rooms in the next two years including the Hyatt Regency Hotel at the Convention Center. There are also four projects in development – including the Toyoko Inn – which will add another 1,000 rooms.
 
“Portland is in the midst of a significant period of hotel growth that will result in more than 3,000 new hotel rooms in the city center by the end of 2019,” said Jeff Miller, president and CEO of Travel Portland and a Downtown Clean & Safe board member. “These additional rooms not only help meet business and tourist visitor demand, but, for the local market, they directly expand on the more than 35,000 tourism-related jobs the industry already supports in Portland, which shows the tangible impact the tourism industry has on the Portland community.”
 
Despite the growth in construction and low vacancy rates across all sectors, the report also identified persistent housing affordability challenges across the city. While roughly 5,200 residential units have been built in the Central City since 2011, another 3,300 units are currently under construction and an additional 2,000 units are in the design phase, only 10 percent of those units are deemed “affordable” when compared to median family income. Additionally, in 2017, the city embarked on an Inclusionary Housing Program, which set new requirements for developers submitting permits. Prior to the Inclusionary Housing Program going into effect in February 2017, developers submitted permits for 19,000 units citywide in a rush to permit projects to ensure financial viability. During the first year of the program, only 17 new permits were filed, signaling the city should reevaluate both the inclusion rate and the incentives offered under the program to make the requirements more effective at incentivizing supply of additional housing to meet the incredible demand.
 
Report highlights include:
  • Central City vacancy rates increased slightly for office space (12.8 percent) up from 10.5 percent last year, and citywide residential properties (4.3 percent) declined from 5.4 percent last year.
  • Since 2011, more than 5,000 residential units have been built in the Central City, ranging from workforce, luxury housing and affordable.
  • Today, an additional 3,300 residential units in 19 projects are under construction and 2,000 units in four projects are in some portion of the development phase. 
The annual Development/Redevelopment Report is created by Downtown Clean & Safe to gauge economic vitality and activity in the Central City. The report also provides information for developers, real estate brokers, property managers and owners, prospective tenants, institutional investors and others who are interested in downtown Portland as a place to do business.
 
A copy of the full report can be found here.
 
 
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Downtown Clean & Safe District
Downtown’s Clean & Safe District was created 30 years ago to support additional cleaning and security in the central city. The district, funded by downtown property owners, includes 213 blocks in the central city, and also supports market research and retail recruitment and retention efforts. The district is managed by the Portland Business Alliance under the direction of the district’s board of directors. Learn more at www.cleanandsafepdx.com.