In response to pressure brought by developers, Commissioner Dan Saltzman has modified his inclusionary zoning recommendations for Portland so that fewer affordable units would be required for projects in the program’s first two years.

Saltzman’s program now would require developers of buildings in mixed-use zones with 20 or more units to include 15 percent of the units affordable at 80 percent of median family income, or 8 percent of units affordable at 60 percent of median family income.

The move is the latest by Saltzman to fine-tune inclusionary zoning ahead of adoption, which is anticipated by the City Council in January. A new local chapter of the developers’ group LOCUS has advocated for a lighter hand in mandates for affordable units.

Saltzman released his revised recommendations on Tuesday as the City Council held a work session on the inclusionary zoning policy. A public hearing is set for Dec. 8.

The targets won’t apply to projects in the Central City, where a separate set of requirements and incentives apply.

Saltzman urged his fellow commissioners to move forward, saying there will be opportunities to tinker with inclusionary zoning policy in the years ahead.

“This is an art, not a science,” he said. “The best way to figure out whether we’ve got it calibrated right is to go ahead and do it.”

But others, including consultant David Rosen, argue that a two-year ramp-up is at best unnecessary.

“The issue of ramp-up is a political issue, not an economic issue,” he said, noting that land prices tend to adjust quickly in light of new regulations.

Rosen added that a ramp-up period could add to market confusion.

“To continually change the rules would inject a lot of risk and uncertainty into the marketplace,” he said.

Developers have already reacted to looming inclusionary zoning regulations by rushing to submit permit applications. The city now has approximately 14,000 multifamily units in the development pipeline – about triple the normal amount, Housing Bureau Director Kurt Creager said.

Developers are even submitting applications for projects they don’t plan to build for years.

“They have themselves created their own ramp-up period,” Creager said.

Developers may opt to pay a fee in lieu of building affordable units, but city officials and housing advocates said they want to structure the fee to encourage construction of affordable units on site.

Creager said allowing developers to pay a fee in lieu of building affordable units could delay construction of units by two to three years.

“There’s a value to time, and that’s lost if we don’t build units on site,” said Margaret Tallmadge, a member of the Planning and Sustainability Commission.

Saltzman is proposing a menu of incentives to entice developers. These include property tax and construction excise tax exemptions, fee waivers and density bonuses. Many of the incentives were required by the state law that lifted the ban on inclusionary zoning policies.

Inclusionary zoning is part of a raft of measures, including the $258 million affordable housing bond approved by voters in November, meant to address Portland’s self-declared housing emergency. Portland officials lobbied the Oregon Legislature to lift a state prohibition on requiring affordable housing; the Legislature obliged in March.

At that point, the city had already hired David Paul Rosen & Associates to analyze inclusionary zoning policies nationwide and to make recommendations.

Saltzman in April convened a panel of 13 experts consisting of developers, housing advocates and others. The inclusionary zoning policy met a mixed reception from the Planning and Sustainability Commission, which recommended adoption contingent on a list of conditions.

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Portland city councilors indicated on Thursday they will support a proposed construction excise tax when it goes to final vote next week.

Much of the discussion at the council meeting involved specifics about the tax: how the money will be spent, whether developers of brownfield property would be taxed and whether multifamily property would be classified as commercial or residential.

The tax as currently devised would assess developers of residential and commercial properties 1 percent of total assessed value. It would generate between $47 million and $57 million by 2035, according to Kurt Creager, director of the Portland Housing Bureau.

Under a plan proposed by Commissioner Dan Saltzman, 100 percent of that revenue would go toward efforts to build more affordable housing for families earning 60 percent of the area’s median family income. Previously, a different plan proposed by Mayor Charlie Hales called for the proceeds to also go to police and programs fighting homelessness.

Supporters of affordable housing who crowded into City Hall on Thursday waved papers that read, “Dear City Hall, Do the Right Thing on CET – Keep it 100,” to encourage councilors to not divide the tax’s revenue among other budget areas.

“I think this is a momentous day,” Commissioner Nick Fish said. “My sense now is there is strong support up here on dedicating the full 100 percent.”

The tax was enabled by a new state law that came out of the 2016 legislative session. The package, which struck down a 17-year ban on inclusionary zoning, also included a law allowing construction excise taxes.

The proposed Portland construction tax was supported by everyone who testified at the Thursday meeting, including developer and Portland Housing Advisory Commission member Dike Dame.

Fish said he had gotten some letters from some trade associations opposing the tax.

“What is your reaction to some of this pushback?” he asked Dame.

Dame responded that he “wasn’t interested in listening to people gripe – this is something we have to do.”

“We all live here,” he said. “We all have an obligation to help our community be a good place to raise a family, and if we are going to push people out because they can’t afford to live in the same city they work, then we’re not really doing that.”

Commissioner Amanda Fritz returned repeatedly to the question of whether multifamily developments – traditionally classified as residential properties, could be considered commercial in this instance. Fritz said doing so would potentially send $778,000 per year to the city, rather than the state.

According to the city’s comprehensive plan, which the council approved earlier in the week, Portland has 13,500 affordable units, with 1,500 in production. There’s a shortage of 24,000 affordable units, and 10,000 more will be needed by 2035.

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Portland Commissioner Dan Saltzman on Wednesday presented his plan to tax new development to raise money for affordable housing.

It’s the first such tax proposal since the Oregon Legislature in March struck down a ban on construction excise taxes in a package of bills intended to give local governments more options for affordable housing initiatives.

The proposed fees on new residential and commercial construction would raise approximately $8 million annually. The tax amount would be set at 1 percent of permit valuation, meaning an average new 3,844-square-foot single-family residence would be taxed $3,636. A new 42,610-square-foot commercial building would be taxed $60,000.

A number of costly system development charges, some greater than $500,000 for large projects, are already applied by the Portland Bureau of Development Services. A frequent criticism by developers and project owners is that whatever they’re taxed ultimately is paid by buildings’ eventual occupants.

Saltzman testified in Salem in favor of the reforms during the recent legislative session.

“I think their point has truth to it,” he told the 91��Ƶ. “But I think we need a diversified source of funds in order to stimulate more affordable housing production. And that is just not happening in the private sector right now.”

A representative of Saltzman’s office said the proposal was vetted this month by a panel of experts, including several developers. Mike Salsgiver, head of the Associated General Contractors’ Oregon-Columbia chapter, said it would have been nice if Saltzman had consulted with members of the construction industry.

“We would have appreciated some outreach,” he said. “On the other hand, the most important issue for us is what it would do to the cost of projects … In an era when the city of Portland is expecting to realize a $26 million surplus, it seems to me the last thing it should be doing is looking to tax businesses more.”

Under the new state law, there are a number of restrictions on how the excise tax revenue must be spent, though Saltzman’s proposed tax would go entirely to affordable housing, with a small amount going to the BDS.

Under state law, a number of construction types would be exempt, including affordable housing, public improvements and improvements to private schools, hospitals, religious facilities and agricultural buildings. Under Saltzman’s plan, the city of Portland would in addition exempt accessory dwellings for two years and improvements valued less than $100,000.

A hearing on the tax proposal before the Portland City Council will take place June 16. The public is invited by Saltzman’s office to submit to it comments by phone, email or in writing.

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The Portland City Council on Wednesday will consider a major proposal to accelerate design review for projects that include affordable housing.

The proposal, by Commissioner Dan Saltzman, would do away with Type III design review for affordable housing projects. He hopes to encourage affordable housing by making the approval process faster and easier.

“We want … to provide a quicker avenue to get necessary approvals from the city to break ground to build that housing,” Saltzman said Thursday.

Type III is the most rigorous planning process, requiring a pre-application conference and a public hearing. The city’s own timeline for Type III review shows applicants should expect a 103-day process, or more than three months.

Developers have long complained of the lengthy timeline.

Under Saltzman’s plan, to be introduced as a City Council resolution, Bureau of Development Services staff members would be responsible for the new review process, called “Type II-x.”

Saltzman said city staff members are fully capable of providing a thorough review that adheres to Portland’s design standards and comprehensive plan.

“I think staff would be pretty rigorous, too,” he said.

More details of Saltzman’s proposal are expected to be revealed with the release of next week’s City Council agenda.

Saltzman said the idea came out of a meeting with Mayor Charlie Hales and Portland Design Commission members.

Saltzman said design commissioners are sometimes frustrated by city standards that take into account design aspects like access to the Willamette River, even for buildings that might be a mile away.

“What does that mean?” he said.

Design commissioners could not be reached for comment on Thursday.

Saltzman said he expects his proposal to move forward.

“I’m pretty sure there’s good support for this in the building,” he said.

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When Barry Menashe, president of real estate firm Menashe Properties, told his son, vice president Jordan Menashe, that he wanted to use one of their empty buildings to accommodate homeless men, the buy-in was immediate.

“When Dad brought up the idea, I said, ‘Let’s roll,’ ” he said.

The idea, Jordan Menashe said, is to help people – homeless disabled veterans, in particular – endure the winter. So Washington Center, at 425 S.W. Washington St., became a night shelter.

With the city’s support, the building opened this week and filled with 100 homeless men on the first night, Jordan Menashe said.

“We are working with Commissioner (Dan) Saltzman and the mayor and the Portland Business Alliance,” he said.

The temporary shelter is being managed by Transition Projects, a nonprofit that manages many of the city’s homeless shelters, Jordan Menashe said.

Some property owners in the vicinity were not happy about the building being used by homeless individuals, but Jordan Menashe said he believes detractors should “have a heart.”

“That’s our decision and we stand by it,” he said. “There are no lines (and) the same folks are sleeping there (each night). They can keep their stuff dry and people can bring them food.”

Menashe said the shelter helps alleviate downtown homelessness.

“We have 400 people sleeping (on the streets) in a four-block radius and here they sleep inside like human beings should,” he said.

The temporary residents are given clean cots to sleep on as well as access to bathrooms and a “wake-up room” where they can have coffee and tea in the mornings before returning to the streets at daytime.

“Everyone staying there has been nothing but appreciative,” he said.

Despite the complaints, Jordan Menashe said he has been “overwhelmed” by the hundreds of positive messages and emails he has received in the past few days.

“Really, people are saying, ‘How can we help at the shelter,’ ” he said. “Even though it’s a temporary shelter, we are bringing hope and respect for those people living there. We are all human beings.”

Homelessness touches everyone, Jordan Menashe said, and touched his father’s family directly.

“He had a brother and sister, both with mental problems, who were on the street for many years and are now passed away,” he said. “So homelessness is a soft spot for our family, and we wanted to help – even though it’s temporary.”

Although the agreement with the city is for the temporary shelter to stay open for up to six months, the building is still on the market, Jordan Menashe said. Menashe Properties acquired the building last year for $9 million, he added.

Jordan Menashe said he plans to keep seeking ways to combat homelessness. He hopes other property owners will step up and help.

“We all need to work together,” he said.

Saltzman, who oversees the Portland Housing Bureau, said opening a building that is unoccupied but still on the market is highly unusual.

“I’ve never heard of anything like this and really appreciate the generosity of the Menashe family for even thinking of this potential use,” he said. “I don’t think most property owners think about it, but I’d absolutely encourage them and would love to have other properties to provide shelter opportunities.”

The city has an agreement with Menashe Properties to provide the building, free of charge, as a night shelter for three to six months, Saltzman said. The city is paying for utilities.

“I hope it’s six, but it’s at least three months,” Saltzman said. “It’s out of the blue and the shelter is full, and so far, so good.”

Roma Peyser, director of development for Transition Projects, noted that the city in November opened a nighttime shelter for women and couples in the Jerome F. Sears Army Reserve Center at 2730 S.W. Multnomah Blvd. The shelter, also temporary, now houses 167 people and will be open through the winter months.

“Like the one (at Washington Center), it is a ‘low barrier’ shelter so people can bring a pet with them,” she said.

Peyser said her office is calling the Washington Center shelter the “Peace Shelter” and said she hopes more building owners like Menashe Properties will offer their vacant properties for temporary shelters.

“As far as we know, it is the first time a private owner has offered up a building, but also with the intention of speaking about it so publicly in order to have others join in on this,” she said.

Anyone who wants to help the city provide even temporary lodging for homeless residents can contact Transition Projects Executive Director George Devendorf at 503-280-4700 or Mayor Charlie Hales at 503-823-4120, Peyser said.

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Architect Brian Emerick may be stepping down as chairman of Portland’s Historic Landmarks Commission this month, but that doesn’t mean he’ll stop advising city officials.

Emerick has served two four-year terms on the commission that weighs in on development in the city’s dozen or so historic districts. His tenure has run the gamut of economic cycles, from before the Great Recession to the building boom today.

Now he’ll take that experience in a somewhat different direction – one less time-consuming – as a member of a city task force charged with setting policy for Portland’s 1,800 unreinforced masonry buildings. He also will spend more time serving as a principal at Emerick Architects, which he co-founded with his wife, Melody Emerick.

Brian Emerick is looking forward to seeing the continuation of efforts that his leadership at the Historic Landmarks Commission has put in motion, as detailed in the State of the City Preservation Report that was presented to Portland City Council last week.

Among the goals set forth for 2016 for the Historic Landmarks Commission is the hire of a full-time senior preservation planner, which the city has needed for some time, Emerick said.

“We’ve got some incredibly dedicated volunteers that are high performers, but at the same time there’s only so much you can do as a volunteer,” he said. “You have to have staff to write the guidelines you really need, or if we had a dedicated city planner that has the bandwidth for that.”

Emerick said Seattle has “a number of preservation planner positions,” but Portland probably has more historic structures – many built in the early 1900s.

“Portland has the same if not more historic resources than Seattle,” he said. “After the Lewis and Clark Exposition in 1905 we had a huge growth spurt here and we kind of eclipsed Seattle at that point.”

Another recommendation in the city preservation report is to establish design guidelines for the Skidmore / Old Town Historic District – something the Historic Landmarks Commission has tried to do for years.

“About seven years ago we engaged in a pretty public process to rewrite the Skidmore / Old Town guidelines (for) a pretty big important area – our most historic area downtown,” Emerick said. “But it got really waylaid for political reasons and has been sitting in a manner of stasis for a number of years.”

With a different City Council now in place, a final draft of the Skidmore / Old Town guidelines will go before the council for adoption in February, Emerick said. Plans also are under way for development of a final draft of Old Town Chinatown Historic District guidelines by the end of next year.

The way city code is written right now, Emerick said, each historic district needs to have its own guidelines because each one is unique.

“But it also kind of puts a burden on the city because then (officials) have to write specific guidelines for each district,” he said. “But I think that definitely having two done for the most important (historic districts) will really help to set a standard to make the others easier to create. That would be the idea.”

The Historic Landmarks Commission is concerned with historic preservation, but is pro-development in that it wants to see historic districts and places active and thriving, Emerick said. That includes infill efforts.

“But at the same time we’re trying to plan for the landmarks of tomorrow,” he said. “The city says these are really important places and we want to make sure they will last another 100 years and really strengthen rather than take away from it.”

Another priority listed in the city preservation report is to update the city’s Historic Resource Inventory. That hasn’t happened since the late 1980s, Emerick said, and hasn’t included eastern parts of the city.

The city preservation report also states the need to secure funding and public support for retrofits of the many unreinforced masonry buildings, particularly in the downtown area, and also recommends seeking a balance between preservation and density.

City Commissioner Dan Saltzman, who oversees the work of the Historic Landmarks Commission, said Emerick’s work has been essential.

“Brian has done an outstanding job and it’s a job that takes up a lot of spare time,” Saltzman said. “I appreciate the work that he and other members have done – like the issues around Mount Tabor and the Washington Park reservoirs, advice that was well-heeded by us. He’s done a great job.”

Emerick also received high praise from Jessica Engeman, a preservationist with Venerable Properties who also serves on the Landmarks Commission.

“He’s been a fabulous commissioner, a very gifted architect, a great moderator and facilitator,” Engeman said. “He really understands how buildings come together and the kinds of details that take a building from ordinary to outstanding.”

Many people think the Historic Landmarks Commission is primarily concerned with historic buildings, Engeman said, but most of its work concerns new construction in historic districts.

“Brian has taken it to the next level in terms of his expertise,” she said. “He provides feedback on new construction that responds to the DNA of the historic district.”

Serving on the Historic Landmarks Commission has been an honor, Emerick said. He became involved at the urging of late Venerable Properties founder Art DeMuro, a good friend who also was Emerick Architects’ first client 16 years ago.

“Art passed away a few years ago, but he was a great mentor and helped me when I became chair,” Emerick said. “He set a good precedent and helped strengthen the commission, and I’ve tried to do my best to carry that ball forward and make it even stronger than I found it.”

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A plan to streamline and simplify Portland zoning rules for accessory dwelling units hit a bump last week, with a potentially restrictive new provision now before the city council.

An amendment proposed by Commissioner Amanda Fritz would make it more difficult to build ADUs near property lines.

“The purpose of setbacks is to allow light, air and privacy; it’s right there in the code,” she said.

Fritz is worried that the draft rules as written could allow a wall of ADUs to fully enclose a property owner’s backyard.

Fritz said that at a public forum Monday at Portland Community College‘s campus on Southeast Division Street, between 50 and 60 people expressed their agreement with her on the issue, and only one person raised a hand to show opposition. (She also sought input on Mayor Charlie Hales‘ proposed $25,000 tax on home demolitions; the crowd’s feelings on that issue were evenly split, she said.)

“Once people are made aware of it, they were like, ‘No, I do not want a new home on my property line,’” she said.

After Fritz proposed the amendment at last week’s council meeting, two of the five commissioners – Hales and Commissioner Dan Saltzman – spoke in opposition.

The updates to the Portland Zoning Code have already passed first reading by the council. It will consider the amendment at Wednesday’s regular meeting. Fifteen minutes has been requested, and no public testimony is scheduled to be taken. If the council approves the code update as written – and no new amendments are proposed – they will take effect Jan. 4, 2016. Then a window of sorts would be open for ADU builders. With a waiver on system development charges (representing possible savings to builders exceeding $10,000) set to expire in July 2016, planner Phil Nameny said his office has been contacted by many people who hope to submit plans before SDCs are reinstituted.

The city has worked since January to update its zoning regulations regarding accessory structures as part of a larger effort to modernize the city’s land use code. In this instance, a major goal was to plan based on an accessory structure’s “form” over its “function,” and took aim at the regulations permit-seekers most often contest. The proposed changes, developed with assistance of a citizen focus group and approved by the Planning Commission, would treat residential outbuildings more like garages, Nameny said.

Under the proposed changes, a one-story accessory structure could be built closer to setbacks and property lines. In another, the uniform height maximum for all detached accessory structures would be raised from 18 feet to 20.

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The city will spend $195 million to retrofit the Portland Building, which is only 33 years old but maligned by structural defects and other flaws.

The exterior of the Michael Graves-designed postmodern office building will be left alone while the inside is gutted and given a seismic overhaul, per a preliminary plan approved by the Portland City Council on Wednesday.

The city’s chief administrative officer, Fred Miller, told the council that he wants to help minimize the project cost by keeping some of the 1,300 city employees who work at the Portland Building there during construction. Presently, approximately $30 million would be used to relocate employees and secure temporary workspace during the five-year project.

“We could save millions,” Miller said.

The council on Wednesday heard and approved three resolutions related to the project, bringing a formal end to its budget-setting phase. The city will now solicit bids from contractors before a design-build contract is considered by the council.

City commissioners were dismayed the cost was so high above initial estimates, one of which was less than $100 million. Miller told the council it would be more expensive to tear down the Portland Building and start over, or build elsewhere.

“It’s important to note that this is the lowest-cost option,” Commissioner Nick Fish said.

Fish and the other commissioners approved the first resolution to set a timeline of five years and a cost of $195 million. They repeatedly sought assurance from Miller that those numbers would not grow.

“I’m still skeptical,” said Commissioner Dan Saltzman, who ultimately voted to approve the resolution.

The second resolution equalized rents across all city departments. The renovation will be funded through the rent increases and a 5 percent appropriation from the general fund.

The third resolution – to dedicate 1 percent of the project cost to opportunities for women and minorities – elicited the most discussion on Wednesday. Minority business owners and advocates questioned the figure and asked how officials determined it.

“Although it sounds like a good number, I’d like to know how much that really is,” said Maurice Rahming, president of O’Neill Electric.

Also, three of the building’s current vendors – two restaurateurs and a retail shop operator – spoke at the hearing and sought reassurances about the project.

The 15-story Portland Building was completed in 1982 for $25 million. The iconic Portlandia statue was added near the front entrance three years later. The building is listed on the National Register of Historic Places; however, it’s not up to current seismic code and is subject to plumbing and electrical problems. Those issues and the nontraditional exterior have frequently drawn criticism.

“You have $195 million,” Mayor Charlie Hales told Miller. “Make this right … make us proud.”

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As an architect with 30 years of experience, Don Vallaster has presented more than a few projects to the Portland Design Commission over the years.

Now he’s sitting on the other side of the table as the newest member of the panel tasked with helping shape the city’s skyline.

Vallaster was nominated to the design commission by City Commissioner Dan Saltzman. He was approved by City Council on Aug. 5 and attended his first meeting Aug. 20. He joins fellow architect Julie Livingston; Tad Savinar, who represents the area of urban design; David Wark, who represents the Regional Arts and Culture Council; at-large representative Jeffrey Simpson; and Ben Kaiser, the land development representative who this week was reappointed to serve on the commission for another four years.

Even with the addition of Vallaster, though, the design commission is still short a member. Keeping the panel’s seats full has been a problem in the past, and filling the position now occupied by Vallaster took longer than originally anticipated, according to Matt Gumm, senior policy adviser for Dan Saltzman, the city commissioner who oversees the Bureau of Development Services and its related commissions, including the design panel.

City Commissioner Amanda Fritz was in charge of the bureau this past May, when Livingston and Vallaster were recommended to her as candidates to fill two empty seats on the panel. Fritz approved adding Livingston, but she rejected Vallaster.

“I’m holding that (second) vacancy because I really wanted someone from an under-represented community to round out our commission membership,” Fritz said at the time.

Vallaster’s name resurfaced for the empty seat, though, when Mayor Charlie Hales appointed Saltzman to oversee the Bureau of Development Services.

“When Commissioner Saltzman was assigned the bureau, he told the mayor the design commission had multiple vacancies and getting a quorum was a challenge,” Gumm said. “So he asked the bureau, ‘Who do you have that would do this challenging volunteer job?’”

After carefully considering applications, Grumm said, Vallaster’s name rose to the top of the pile again.

“He has great experience, has done a lot of professional work and has been before the commission many times,” Grumm said. “It’s got to be a careful process and we need to make the process work and come to decisions in a good way.”

Vallaster said he hopes to bring more sensitivity from a development perspective to the commission, whose members serve on a voluntary basis with no financial compensation. One of the ways he hopes to achieve that is by limiting those notoriously long design commission meetings, which have been known to stretch five hours or more, to a more reasonable duration.

“That’s what made me most nervous about accepting the position,” said Vallaster, who is a founding member of Vallaster Corl Architects. “I have to commit more time than I have, but I’ll see if I can make it work.”

He also would like to find a way to allow projects to move through the entire approve process more quickly

“I would love to see it speeded up if that’s possible to do,” he said. “That would be good for development and good for the city, for both sides of the equation.”

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The Portland City Council last week approved guidelines for new zoning codes that will give developers more incentives to include affordable housing in their projects.

The code changes mean developers will be able to either include affordable housing in their multifamily developments or pay into a fund to create more low-income housing.

Under the direction of  Commissioner Dan Saltzman, who oversees the Portland Housing Bureau, that agency and the Bureau of Planning and Sustainability conducted a study on incentives for affordable housing in the city’s center. The results were shared with the City Council July 9. The council then voted unanimously to accept a resolution directing city staff to work with other stakeholders on proposed changes to the city zoning code for the Central City using guidelines spelled out in the resolution.

Saltzman said the new rules will be presented to the council next July.

“It’s a good solid step,” he said. “And for everyone who’s got concerns, there is still time to work through those concerns and still not lose the direction of making affordable housing the predominant bonus for additional height or density in the Central City.”

Portland’s city center is expected to gain about 30,000 new households over the next 20 years, according to estimates by the Portland Housing Bureau, with more than 8,300 of these households earning below 80 percent of the median family income.
Based on average levels of development, according to a statement from the housing bureau, the bonuses could result in about 60 new units each year – or between $120 million and $200 million for affordable housing and rehabilitation.

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