It’s not the best time to be a speculative home builder.

Justin Wood, director of government affairs for the , and the vice president of construction for Fish Construction Northwest – a small, speculative builder – knows it firsthand.

Five to six years ago, his company was building 25 to 30 homes a year with five different lenders. A year ago, the company had just one lender and that was tenuous at best.

That was a tough stint, but in the past six months some of the financial doors that seemed to close following the recession have begun to open back up. Wood said two lenders recently contacted him to express their interest in loaning money again.

“We now have three lenders that we’re working with that weren’t available to us six months ago,” he said.

Across the board, residential construction is picking up and building permits are on the rise, implying that more home builders are getting loans. But industry professionals say access to credit is still a problem and that lending requirements haven’t eased – it’s just a healthier market makes it appear that way.

“The absorption rates have improved and inventories have declined,” said Rich Hubbard, Northwest division manager of commercial real estate at . “So we’re seeing better metrics in the business these days, which allows for having the perception that it’s easier to get a loan. But it just works better these days because the market has more health.”

According to ‘s third quarter report, the number of building permits issued for single family homes has increased 47 percent over the past year in the Portland metropolitan area – the second highest jump in building permits behind Corvallis, which has seen a yearly increase of 167 percent.

Meanwhile, a relatively low inventory of existing homes for sale is putting upward pressure on home prices while mortgage rates are hovering at near 60-year lows. In July, the national average commitment rate for a 30-year fixed-rate mortgage was 3.55 percent – a full percent lower than a year ago.

Hubbard said that since it takes less time to sell out a subdivision today than it did in 2010, the bank can assign stricter timeframes to loans. That makes them easier to manage.

That’s been helpful on the commercial loan front, but for individual, speculative deals the metrics are still questionable. Jeff Miller, mortgage department manager with Rivermark Community Credit Union said his credit union is not currently lending for home construction.

“We still believe, based on what we’re seeing from purchase prices, loan amounts, borrower activity, and what we’re seeing coming in with appraisals, we’re not as optimistic as a lot of other folks may be or media outlets,” Miller said.

One main reason is that the cost of construction for most projects exceeds the resulting appraised value of the home, Miller said. He said the properties that tend to be moving are those priced between $160,000 and $210,000, while the typical cost to build a new home is higher than that.

The regulatory powers that be are not showing optimism in the market either. On Sept. 13, the Federal Reserve made an unprecedented announcement that it would be using reserves to purchase $40 billion-worth of agency mortgage-backed securities, per month, for an indefinite amount of time.

“The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” the Fed said in its announcement. “Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.”

While significant, the Fed’s move is unlikely to have any effect on home sales or construction, said David Crowe, chief economist for the National Association of Home Builders.

“Their actions will likely reduce mortgage rates a small amount – I say small because the rates are simply so low already,” he said. “But it is unlikely to have much impact on home purchases. The reason for that is that the impediments are not the cost to credit but the availability of credit.”

The Fed’s strategy will likely have a stimulative effect on refinancing for those who already own a home, but it won’t impact home purchases or home construction, Crowe said. Underwriting standards, he said, are still tight across the nation and until that changes, the home building front will remain tepid.

, for example, is lending for custom home projects but not for speculative deals.

Gary Duffy, senior vice president and residential production manager for Umpqua, said speculative deals are still too risky because there is no buyer lined up at the project’s completion. Custom projects for individual home owners are seen as being safer because the borrower is the home owner.

Duffy said Umpqua has seen an uptick in demand for custom construction loans and is interested in lending this type of money to qualified borrowers.

For Wells Fargo’s part, Hubbard said underwriting standards haven’t changed as a result of the recession, but the bank is putting a lot of emphasis on character, experience and credit history these days. That is to say, it’s choosing its customers carefully.

“I would say that it’s important for somebody to have a clean past, a clean history,” Hubbard said, “and a balance sheet strong enough to accommodate the risk they’re accepting and a project that has fundamentals strong enough that it has a strong probability of working.”

Wood has seen those sentiments reflected in his line of work as well. While it’s not as plentiful as it was five years ago, he said builders with good credit can find money for speculative projects.

“It’s better for people that are in good shape,” he said. “But that said, it’s still tough.”

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started construction this week on a new Chase bank branch in Southwest Portland.

Located at 2121 S.W. Fourth Ave., the 7,457-square-foot space composes the entire ground floor of the building. previously occupied the space.

Jon Thornburg, senior project manager for Chase, said the bank was completely remodeling the space’s interior to reflect standard Chase finishes, furniture and equipment. The project’s general contractor is Vancouver, Wash.-based Robertson Olson Construction and the project architect is Seattle-based .

In addition, Josh Schlesinger, vice president and asset manager for , said his company would also be doing a complete renovation of the HVAC system. He said the space was on the market for six months prior to the lease agreement with Chase and that the bank was an excellent long-term tenant.

Construction began on Jan. 9 and Thornburg said the branch is expected to open for business in April.

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Southwest Portland residents and JPMorgan Chase have spent several months debating the design for a proposed bank branch at 6361 S.W. Capitol Highway, in the Hillsdale neighborhood.

Now it looks like the bank may be able to circumvent much of the controversy by enlarging the branch’s building-to-parking-lot ratio with a canopy that would cover part of the lot. The “building” would not be enclosed, but it would still count toward the minimum building square footage required by city zoning code for the lot.

Though Chase may be able to go forward with its plan, the Hillsdale Neighborhood Association says it will continue to oppose it. Its concern for the site relates to a greater desire to increase density and multiuse buildings on the neighborhood’s main drag.

The design of Chase’s proposed Hillsdale branch initially called for a footprint occupying just 21 percent of the lot. But Hillsdale’s Main Street area has commercial storefront zoning, which requires that a building take up at least 50 percent of a lot.

Chase stuck with its proposal until it was informed by senior planner Douglas Hardy that the city was unlikely to approve its request for a zoning variance.

After returning to the drawing board, Chase proposed constructing a similar branch building with an additional community room for neighborhood use and a large canopy. The number of parking spaces wouldn’t change.

The strategy is OK, technically, Hardy said.

“The way the zoning code defines building coverage … it doesn’t have to literally be a building with four walls and a roof. It can be one of these canopies,” Hardy said.

“There’s some quirky things in the zoning code,” he added.

Hardy advised the bank that its proposal would eliminate the need for a variance, and that its plan wouldn’t need to be reviewed until the building permit stage. The bank hasn’t submitted a final plan to the city, according to Hardy, but alterations are not required.

Nevertheless, residents have resisted the canopy proposal. At a neighborhood association meeting on Wednesday, Hillsdale Main Street Design Committee co-chairman and neighborhood resident Richard Garfinkle said that the bank was doing the least amount possible to meet the site’s zoning requirements.

“The canopy is embarrassing,” Garfinkle said.

For residents present at the meeting, the proposed Chase bank branch – a single-tenant building on Main Street’s only vacant lot – symbolizes a missed opportunity.

“What we need most of all is apartments,” Hillsdale resident John Gould said at the meeting. “We don’t need another bank that minimizes the use (of the land).”

Residents are hoping for an eventual light-rail stop in Hillsdale, but they fear that light density could ruin those chances, Gould said.

The property is owned by Ardys Braidwood, whose family has owned the land since 1908. Braidwood is a managing partner at Wardin Investments. The company has studied the site’s potential for a two-story building with ground-floor retail and either office space or housing upstairs, she said, but “it just didn’t pencil out.”

The site isn’t deep enough to accommodate parking that would be necessary for so many tenants, she said.

Prior to the economic collapse in 2008, Braidwood helped design a four-tenant, one-story retail development for the site. After the downturn, however, interest in that project dried up, she said.

“So I sat on it, and Chase Bank came to me and asked about a long-term land lease,” Braidwood said.

If Chase can move forward with its proposed footprint despite residents’ concerns about density, the bank will still need to go through a city design review process. At the Wednesday meeting, architects from Seattle-based presented a Northwest-inspired Chase branch design that features brick, metal materials and lots of pedestrian-oriented windows – better than the “off-the-shelf” design Chase had initially proposed, according to residents.

While residents such as Garfinkle hope that Chase will change its mind about the project, the bank does not need their approval.

“Frankly, what Chase has to do is meet the code requirements,” Chase’s attorney, Gregory Hathaway of Portland-based , said at Wednesday night’s meeting. “This technically meets those requirements.”

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Chase representatives have requested, again, that the city of Portland delay its decision about the bank’s application to build a branch in the Hillsdale neighborhood in Southwest Portland.

“We made this decision in an effort to continue to try to work with the neighborhood association to find a solution that will work for everyone,” Chase spokeswoman Darcy Donahoe-Wilmot wrote in an email.

Douglas Hardy, a planner with the city’s Bureau of Development Services, said he called Chase officials at the end of last week to “give them a heads-up” that the city would likely not approve the application.

Chase is seeking an adjustment request, to build a branch building that occupies only 21 percent of the site, instead of the 50 percent required by the commercial storefront zoning in place in the Hillsdale Neighborhood Town Center.

“It’s just too far from the minimum building coverage standard,” Hardy said.

The Hillsdale Neighborhood Association last week submitted a letter to the city expressing its opposition to the request. Association President Mikal Apenes told the 91��Ƶ previously that the organization opposed the application because it had not been able to discuss it with Chase representatives.

Chase representatives met with residents in early August; however, after initial concerns were raised, residents’ requests to meet with Chase officials to discuss an alternate “design plan” did not result in meetings, according to HNA member Robert Hamilton, who was tasked with setting up the meetings.

The comment period for the application was set to end Sept. 19, but it was extended an additional 30 days, with the city slated to issue a decision around Oct. 26. Chase will have the option to change its proposal in the interim, but if the application is significantly different, then it may need to start over, Hardy said.

“(Chase officials) are re-evaluating their alternatives for the proposal,” he said. “They’ll be getting back to me.”

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A disagreement about the format of a proposed new Chase bank branch in Southwest Portland’s Hillsdale neighborhood seemed to be moving toward a potential compromise. After meeting with multiple groups of stakeholders, Chase had extended the deadline for public comment on its application by a month.

As the comment period comes to a close, however, Hillsdale Neighborhood Association members say their requests for meetings with the bank were denied, and that the HNA plans to oppose the bank’s application.

Now city staffers will decide whether to approve or deny Chase’s request for adjustment. And neighborhood representatives say approval would undo years of work to shape their town center.

The “storefront commercial” zoning that governs Hillsdale Town Center requires that buildings occupy at least 50 percent of their lots. But in Chase’s proposal, the building would take up only 21 percent of the lot; 44 percent would be used for vehicle parking and 35 percent would be dedicated to landscaping and pedestrian circulation.

Ray Lindley, a Chase market manager, said the adjustment is needed to provide “adequate parking and easy access” to the branch, but residents strongly object to the idea.

“People in the neighborhood have worked long and hard to establish the commercial storefront zoning and to develop the Hillsdale neighborhood town center,” HNA President Mikal Apenes said. “(The bank’s adjustment) would be a giant step back from the whole process.”

HNA member Robert Hamilton said the proposed size of the parking lot contradicts the neighborhood’s goals to achieve greater density and encourage use of public transit in the town center.

Hamilton tried to set up meetings with Chase to discuss the issue, and delay the bank’s application further, until the neighborhood and the bank could agree on a footprint that was “satisfactory, if not acceptable” to both parties, he said. Though multiple emails were exchanged between Hamilton and the bank, that meeting didn’t happen.

Lindley acknowledged that residents tried to set up a meeting, but added that Chase believes they were primarily concerned with “design elements,” and not the zoning issue.

“We are not even at the point of design,” Lindley said.

In his requests for meetings with Chase, Hamilton said he wanted to discuss a “design plan.” In his mind, the property would ideally hold a multistory structure to house multiple retail businesses and condominiums, to help meet density goals.

“The adjustment was the primary concern of the neighborhood association,” Apenes said. “I thought we had been pretty clear on that with Chase bank.”

The Hillsdale Neighborhood Association is drafting a letter of opposition to the adjustment application, Apenes said.

City staffers will make a decision about the adjustment application around Sept. 26, according to Bureau of Development Services spokesman Ross Caron. An appeal would go before the city’s adjustment committee.

Caron could not speak about the details of the Chase case, but said that staffers decide whether to approve applications based on whether applicants “meet the intent or the purpose of the regulation they’re asking to modify.” Comments from the neighborhood association and the public would be taken into consideration as they apply to the approval criteria, he said.

Lindley said that Chase is eager to move forward with the project. The new location would serve Chase customers who don’t have a local branch, he said. The closest one to the proposed Hillsdale site is approximately one mile away, inside the Burlingame Fred Meyer store.

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Despite some hope that an agreement could be made between Chase Bank and the residents of Portland’s Hillsdale neighborhood, neighbors say they will oppose an adjustment request that the bank has filed with the city for the construction of a new bank in Hillsdale Town Center.

Chase Bank has requested an adjustment that would allow it to create a smaller building with a larger parking lot than is allowed by zoning in the Hillsdale Town Center area. Hillsdale Neighborhood Association President Mikal Apenes said the group voted to file a letter of opposition to the bank’s request because the neighbors were unable to meet with bank representatives during the comment period about the request.

“It’s safe to say that the neighborhood strongly opposes the adjustment to the storefront zoning,” said Apenes. The neighborhood had previously requested that Chase extend the deadline on the public comment for the bank’s proposal, which the bank did. However, the bank was unavailable to meet with the neighbors during that time, Apenes said.

The neighborhood association’s opposition to the building comes mostly from the bank’s deviation from the “commercial storefront” zoning that is set throughout Hillsdale Town Center.

“People in the neighborhood have worked long and hard to establish the commercial storefront zoning and to develop the Hillsdale neighborhood town center,” Apenes said. “(The bank’s parking lot) would be a giant step back from the whole process.”

The city of Portland is expected to make a decision about Chase Bank’s request by the end of September. If the city denies Chase’s adjustment request, Apenes said the neighborhood is still willing to discuss having a bank in the neighborhood.

“We’d love to meet with them about the size, shape and design of the building,” he said.

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Bartel Contracting is performing an exterior renovation on NW Priority Credit Union’s main office branch in Southeast Portland.  Work on the project, designed by Iselin Architects, P.C., includes filling in a recessed alcove, adding canopies on the building’s front and rear, and installing new moisture control systems, stone panels, and HardiePlank siding.

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Chase is seeking to increase its presence in the Portland-metro area significantly, by adding more than 30 bank branches in the next three years. The company also is looking to build solid relationships with its new neighbors.

Since acquiring Washington Mutual in 2008, Chase has desired to increase convenience for customers who don’t live, shop or work near its branches in the metro area. Although Portland was a good market for Washington Mutual, it did not focus on building new branches in its last four to five years, said Ray Lindley, JPMorgan Chase market manager for Oregon and Southwest Washington.

Other banks also are expanding in the market, but not at Chase’s pace.

“Chase is doing very well financially,” he said. “We’ve come through a lot of the malaise. And (Portland-metro) is an underserved market for Chase; we think it’s a growth market.”

One neighborhood targeted by Chase is Hillsdale. Its neighborhood association took a summer break and chose not to meet in August, so members were surprised by Chase’s request to include a large parking lot with the branch building it planned to construct.

Hillsdale residents became concerned about the building proposal because the neighborhood’s main street area has zoning specifically designed to encourage a “village” feel. Dense commercial areas with storefronts are favored because they encourage pedestrian traffic.

“We had to buy some time,” said Rick Seifert, a Hillsdale resident who operates a blog and newspaper about the neighborhood. “We signaled to Chase that if (it) didn’t grant an extension and an opportunity to come up with input and alternatives, (the neighborhood association) would oppose the proposal.”

On Wednesday morning, after a Tuesday night meeting with neighbors, JPMorgan Chase executives told the city and the neighborhood association that they wanted to extend the comment period on their proposal for 30 days. Hillsdale neighborhood association President Mikal Apenes said that announcement was appreciated.

“We want to be as good a neighbor as we can in each community,” Lindley said.

Chase’s architects will meet with Hillsdale representatives to ensure the branch is compliant with neighborhood standards. Company officials also will consider possibilities of parts of the building or lot being used for meetings or a farmers market when the branch is closed.

“We hope that goes a long way to make the lot, and our building, an integral part of the community,” Lindley said.

Construction has started in the Portland-metro area on six new branches that Chase expects to open by the end of the year. The bank plans to open at least 12 more in 2012, and at least 15 more in 2013. Future construction contracts will go out to public bid, spokeswoman Darcy Donahoe-Wilmot said.

Chase isn’t the only bank growing in the Portland-metro area. Key Bank’s goal was to open 20 branches in the region between 2009 and 2012. It has opened 15 since 2008 and will continue to grow, spokeswoman Anne Foster said.

“Our goal is not to build in every state, but to seek a 10 percent market share wherever we do business,” she said.

Key Bank, which has branches in 14 states, is not at 10 percent in Portland yet.

Other banks are planning for a slower expansion. U.S. Bank will open a new branch in West Linn by the beginning of 2012, and has “a couple other things in the pipeline,” said spokeswoman Teri Charest.

“We’re the biggest bank in Oregon, so one or two (new branches) is pretty significant,” she said.

By the end of 2011, Umpqua Bank will have 12 new branches, which it calls “stores,” in markets between Portland and Seattle. Spokeswoman Eve Callahan said the company doesn’t have a target number for stores to open in 2012.

Smaller firm Union Bank acquired three Portland-metro branches in May 2010, when it bought Frontier Bank. Spokesman Alan Gulick said the firm has high expectations for growth in the market, but would not disclose whether there were specific plans.

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Lorentz Bruun Construction is performing a full renovation of a space at the corner of Southwest Washington Street and Southwest Fifth Avenue in downtown Portland.  The 2,219-square-foot space, designed by Callison Architects PC, will house a Chase bank.  Work on the project began July 5, and the bank is projected to open Oct. 12.

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Construction of the $63.3 million Oregon Sustainability Center is projected to start early next year, and project officials are looking to corporate and foundation supporters to supply the last few millions of dollars needed to make the building a reality.

The center will be built near the Portland State University campus at Southwest Fourth Avenue and Montgomery Street. The Portland Development Commission, the Oregon University System, the city’s Bureau of Development Services and a number of green-focused nonprofits all will be tenants of the planned living building, which will feature solar panels, systems to filter and reuse waste water and systems to capture and use rain water.

Oregon Sustainability Center funding sources

Construction of the Oregon Sustainability Center will cost $59.3 million, which does not include a $4 million streetcar alignment and $1.9 million for research and educational exhibits. The list below enumerates the projected funding sources for the project.

$45.1 million	Oregon University System and city bonds
$4.9 million	City tax increment financing from South Park Blocks URA
$3 million	Oregon University System cash
$2.5 million	New Markets tax credits and Energy Trust of Oregon money
$2 million	In-kind and federal contributions
$1.8 million	City land contribution

The project is being pitched to potential donors as an opportunity to showcase technologies and products “as expectations and demand for higher-performing buildings increases,” according to fundraising documents.

At an event Tuesday night, Portland Mayor Sam Adams and Gov. John Kitzhaber officially launched the private fundraising campaign for the OSC at Umpqua Bank’s Innovation Lab in the South Waterfront District. Ray Davis, CEO of Umpqua Bank, announced that it had signed a lease commitment to be the building’s first private tenant, in a retail space on the first floor.

“This is an Oregon building. It will create a center that will bring the world to us,” Davis said.

Adams recognized donations from Sanyo Solar of Oregon and local firm InSpec Group, which will manage the photovoltaic system’s design and installation.

Sanyo Solar of Oregon will donate part of the building’s projected 679 kilowatts of solar panels – a partnership that will help both parties, OSC Development Director Robert Frisbee said.

“Sanyo will use the center as (its) North American energy product demonstration facility,” he said. “We will have a variety of Sanyo products. They will use this as a place to demonstrate their leading products: solar panels, batteries, LED lights, and direct-charge circuits. And they will use that to promote North American sales; they can tour (potential customers) through and show them all the cool stuff.”

Other businesses can become involved: An outdoor plaza, a ground-floor exhibit and action center, and the building’s streetcar stop could be named after businesses donating $100,000 or more, depending on the area.

Project officials are still seeking several tenants for retail spaces. Frisbee is looking to attract a purveyor of Oregon food – though energy limitations could make that tricky, he said.

Frisbee said he is well on the way to his $8 million fundraising goal; only about $2 million is left, though Sanyo and InSpec Group are the only private donors revealed publicly.

“We are looking to confirm a majority of the commitments by the end of June. We will continue fundraising with businesses and federal grants for another year,” he said.

Though there is not enough money confirmed to be able to say the project will definitely happen, Frisbee said he feels close.

“I feel the tipping point has been reached,” Frisbee said. “With just a few more of these important closes, we’ll be over the top.”

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