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The Pearl District is a popular destination for new residents, with several low-income housing buildings and construction going on throughout the calendar. However, a , as Denver-based Simpson Housing opted out of the project given current rental rate averages for the Pearl.

Spencer Welton, Simpson’s SVP of development, said the reported average rent of $1.34 per square foot per month was too far below their target rate of $2.25. He said his initial interest in developing a building in Portland was high, though a feasibility study showed that the developer would not see a return on investment strong enough to move forward.

Think about that for a moment. Assuming $1.34, a tenant would pay $670 per month before utilities for 500 square feet, a typical size for a studio with a bathroom, walk-in closet and kitchen. Figure $750 after utilities, and the tenant is paying $9,000 per year for what amounts to a large dorm room. (A furnished  of comparable size would cost about $11,000 year-round, in case you were wondering.) Assume $2.25, and those 500 square feet cost closer to $15,000 annually.

Now, is Simpson greedy for balking at $1.34? Hardly. If $2.25 is what they expect in order to develop a high-end residential tower — a look shows a classy standard, indeed — they’re smart to walk away from the 91-cent difference between current rates and their expected rates.

Simpson’s reticence to build in the area is not universal, however. Developers such as and are plenty busy regardless of the rent averages, and there are  being reported as of October 2011, along with just 4 percent vacancy citywide.

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