Construction of six prototype modular homes is under way in a warehouse at the Port of Portland‘s Terminal 2. The project’s goal: Provide a solution to ease Oregon’s housing shortage.

Hacienda CDC is leading the pilot project that is among the first of its kind in the nation. The six homes made from Oregon-produced mass timber, supplied by Freres Engineered Wood of Lyons, will go to preselected families and individuals in four Oregon communities (Madras, Otis, Portland and Talent) by June. The homes range in size from studios to three-bedroom models.

Project team members include Salazar Architect, Walsh Construction and VALAR Consulting Engineering.

The aim of the project, called Mass Casitas, is to demonstrate how production of modular, mass-timber housing could be more “efficient, faster and less expensive” than traditional construction. The effort was spearheaded by $5 million in funding from the Oregon Legislature during the December 2021 special session.

On Jan. 27, city and state officials, including Gov. Tina Kotek and Sen. Jeff Merkley, community leaders and media members visited the prototype production site.

Oregon is short 110,000 homes for people at all income levels, according to state economists. To accommodate future growth, the state may need more than 580,000 new homes over the next 20 years, state economists have said. Last month, Kotek signed an executive order setting a new housing construction target of 36,000 units per year – an 80 percent increase over current production – to address the state’s housing shortage.

How homes are produced

Mass plywood arrives at the Terminal 2 warehouse as large, blank panels that are then assembled in modules (or boxes). Studios (426 square feet) are one box and two-bedroom (852 square feet) and three-bedroom (1,136 square feet) models are two boxes. Mechanical, electrical and plumbing elements are then installed, followed by windows, insulation and roof structures.

The biggest challenge was designing the boxes, said Leticia Cervantes, Hacienda CDC’s mass timber innovation director. The goal, she said, was to expose as much of the timber as possible – but not all MEP systems would allow this. A lot of time was spent in the design phase, she added, determining which systems to leave exposed, like electrical, and which ones to hide.

Another design consideration was the size to make each unit. Cervantes said with modular construction they needed the square footage to be replicated as best they can across the three different unit sizes.

Panels come in sheets about 9 feet by 48 feet (2 inches thick) for the walls and about 11 feet by 48 feet (4 inches thick) for the floors and roof. A single modular unit (studio) became 11 feet, 10 inches by 36 feet. Two-bedroom and three-bedroom units are double that width, with lengths of 36 feet and 48 feet, respectively.

Once complete, the boxes will be trucked fully intact – furnishings and all – to the selected communities. There, nonprofit partners will receive the boxes and place them on sites. Community partners include CASA of Oregon, Cascade Relief Team and Community Vision.

The Mass Casitas team will then monitor how the homes perform in different climates and in utility by residents to improve the design and production process. Meanwhile, the team also will work to increase the capability of producing the modules at scale.

Future mass-timber factory

The Mass Casitas project is a part of a plan to build an innovation hub on the 53-acre Terminal 2 site. The facility would be used for assembly of mass-timber panels to build the modular homes that would be dispersed from the terminal to communities in Oregon.

Hacienda CDC CEO Ernesto Fonseca said the idea stemmed from a casual conversation he had with Port of Portland Executive Director Curtis Robinhold about five years ago. They sought a way to revive the empty warehouses at Terminal 2, Fonseca said.

Initially, Fonseca thought of multifamily housing, but the terminal is zoned only for industrial use. Then came the idea of combining “housing” and “facility” by building the former in the latter.

The Oregon Mass Timber Coalition, of which the Port of Portland is a member, last year received a $41 million federal grant to help finance construction of the housing factory.

Hacienda CDC has applied to be the developer for the factory’s mass-produced homes, Fonseca said. If it is accepted and chooses to take on that role, he said he expects workers at the factory to be able to complete about one unit per day at opening and then about 2,000 units per year at full production. At this time, expectations are that with the factory at full production, a three-bedroom unit would cost roughly $375,000 – but that is a “very” early estimate, Fonseca added.

“We hit the jackpot, I think,” he said. “I do think that manufactured modular housing is the future, at least for now, until we balance our shortage of housing, and the new housing that we have.”

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Construction has begun on Scholls Heights, a new residential development in west Beaverton.

Scholls Heights will include 17 single-family homes in the first phase. Prices will start “in the $700,000s,” according to a news release from home builder Pacific Lifestyle Homes.

Floor plans range from 1,600 square feet to 2,400 square feet, with two to four bedrooms and two to three bathrooms.  Buyers can choose from single-level designs or two-story plans.

“We are thrilled to open Scholls Heights,” stated Mark Kesling, sales operations manager for Pacific Lifestyle Homes. “We have been anxiously awaiting the debut of several Oregon neighborhoods and we feel this will be a popular one. The location is fantastic with so many shopping and recreation and entertainment options.”

Scholls Heights is located at 12516 Strobel Road in Beaverton. The neighborhood is near Southwest Scholls Ferry Road, which provides access to Oregon Route 217. The property is within Beaverton School District, and feeds into Hazeldale Elementary School, Highland Park Middle School and Mountainside High School.

Pacific Lifestyle Homes was founded in Vancouver, Washington, in 1996 and operates in the Portland-metro area, Southwest Washington and the Puget Sound area.

The new development comes as home prices continue to rise steeply in Washington County and across the nation. The median price for homes in Beaverton-Aloha that sold in January and February was $517,000, according to RMLS. The average market time of 20 days was among the lowest in the metro area.

Washington County saw a small population increase in the most recent year ending July 1, according to the U.S. Census Bureau. Washington County gained 122 residents, while Multnomah County lost 12,494 residents.

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Sweeping legislation to break the dominance of single-family zoning in Oregon cities has the backing of some of the state’s most powerful politicians.

The proposal, House Bill 2001, would require cities to allow more housing options. For each single-family lot, neighborhoods would have to allow one alternative dwelling unit, or ADU.

Also, duplexes, triplexes and fourplexes would be allowed in single-family zones. Perhaps most notably, municipalities would not be allowed to ban middle housing types within their urban growth boundaries.

Backers of the legislation say traditional single-family detached houses are an increasingly poor fit for a large segment of the population, as millennials have shown a preference for having smaller families and living in urban cores.

“One of the disconnects we see is in the types of housing that’s available to buy or to rent,” said Mary Kyle McCurdy, deputy director of 1000 Friends of Oregon. “Over half of households consist of one to two persons, and yet well over half of our land is zoned just for detached single-family homes on one lot.”

HB 2001 has bipartisan support, McCurdy said. The legislation is sponsored by House Speaker Tina Kotek.

“The housing crisis throughout the state has continued, and it continues to be an urgent issue that needs to be addressed,” said Danny Moran, spokesman for Kotek.

The proposal bears some similarities to Portland’s Residential Infill Project. The proposed draft of changes to zoning in many of the city’s single-family neighborhoods to allow middle housing types is being examined by the Planning and Sustainability Commission. The proposed changes are expected to go before the City Council by summer.

In both cases, policymakers are breaking with decades of zoning practice that protected single-family neighborhoods from apartments, condos and duplexes. An increasingly vocal tenants’ movement has challenged the status quo, saying single-family zoning results in segregation by race and class.

Advocates for tenants’ rights have scored some notable victories, helping elect Sen. Shemia Fagan, D-Portland, to replace Rod Monroe, a landlord, to the Oregon Legislature as well as tenant-friendly commissioners Jo Ann Hardesty and Chloe Eudaly to the Portland City Council.

Meanwhile, Minneapolis recently became the first city to abolish single-family zoning and allow middle housing types throughout. Democrats in Oregon are seeking to essentially supersize the Minneapolis approach by taking it statewide.

HB 2001 would apply to Oregon cities with populations of 10,000 or more, and counties with 15,000 or more residents within their urban growth boundaries. The statewide approach could result in more middle housing options in cities such as Bend and Ashland.

“It’s not a panacea, but it’s one option to really create more housing within the state’s urban growth boundaries,” Moran said.

The bill is likely to be controversial among residents in some Portland neighborhoods such as Eastmoreland, which has historically resisted multifamily and middle housing types.

The multifamily landlord group More Housing Now has not taken a position on the bill, lobbyist John DiLorenzo said.

“We’re looking at it carefully,” he said. “We realize we need more housing in the city. There are lots of ways to do that.”

If HB 2001 were enacted, local governments would have until Dec. 31, 2020, to bring their zoning into compliance.

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The local family proposing to build a 21-home subdivision in the Southwest Portland hills will appeal the City Council’s decision last month that halted the development.

Stephen Griffith, one of four brothers who own the land behind Riverview Abbey Mausoleum Co. on Taylors Ferry Road, said the family will file an appeal with the Oregon Land Use Board of Appeals.

“It is our hope that LUBA will recognize the fact that our development plan complies with the law,” Griffith stated in an email message. “Portland needs more housing options. We desire to fulfill my grandfather’s dream of building on the property that he had the foresight to purchase many years ago.”

On Feb. 7, the City Council upheld an appeal by the South Burlingame Neighborhood Association. The group had challenged development plans for the Macadam Ridge subdivision, citing landslide hazards and environmental overlay rules. Commissioners said they were also concerned about tree removal and disruption of a wildlife corridor.

The Neighborhood Association delivered to the council a three-hour presentation with coordinated testimony from more than 30 neighbors.

The council overturned a favorable decision by hearings officer Melvin Oden-Orr “based on an emotional appeal by the Neighborhood Association,” Griffith stated.

The 14-acre property, purchased by Willard Griffith in 1945, is a rare undeveloped plot of land within Portland’s urban growth boundary. Stephen Griffith said the family intends to establish a preliminary plat and sell the property to a homebuilder. Each new home would be about 3,500 square feet and cost approximately $750,000.

At the February council meeting, Mayor Ted Wheeler said some development on the land is inevitable.

“It is my view that this is a complex site, for obvious reasons – it has all of the overlay issues – but ultimately it is a developable site, and it is my belief it will be developed,” he said. “So now the question is: How do we shape that development and how do we take that from here?”

Griffith said the family has spent hundreds of thousands of dollars during the past four years to develop the property.

“It’s so extremely costly,” he said. “Between us and development partners, it’s close to a million dollars now.”

Starting over in the city’s approval process would only add to the costs, according to Griffith.

“It’s basically cheaper to appeal than to start a new application,” he said.

Griffith said he expects to hear a decision from LUBA in about 70 days.

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A suburban housing development called Findley Heights is looking to meet demand for high-end homes in Washington County for employees of growing companies such as Nike and Columbia Sportswear, and other major corporations such as Intel.

Findley Heights encompasses 81 buildable lots. That’s split between West Hills Homes Northwest, owned by Vic and Wally Remmers, and Arbor Homes, led by longtime home builder Dennis Sackhoff. Arbor has 41 lots, while West Hills Homes Northwest has 40.

The development is in unincorporated Washington County in the Bethany-Bonny Slope area, just north of Findley Elementary School. The highly rated area schools are a draw for buyers, Vic Remmers said.

Homes range from about $600,000 to $1.3 million.

Many buyers are moving up from smaller homes, said Jim Chapman, Arbor’s general manager. That, coupled with in-migration for professionals taking high-paying jobs in Washington County, is providing demand.

“There’s still very much a shortage of homes for the increase in population and jobs and so forth,” Chapman said. “But the whole region is made up of micro-markets.”

In suburban Washington County, Chapman said, “it’s very strong. We’re able to sell everything that we build. So we’re building at a very deliberate pace to match the labor that’s available.”

Both Arbor and West Hills Homes Northwest are dealing with the labor shortage that is slowing projects around the metro region.

“That’s a struggle a lot of home builders are dealing with right now, just having the manpower to get your housing built in a timely fashion,” Remmers said.

Both builders are using longtime subcontractors instead of trying to forge new relationships.

“We have a very professional and loyal contractor base, so we just work to maintain that and match their capabilities, rather than overcook it and wear them out,” Chapman said. “We’re doing essentially a house a week. If we tried to do five houses a month, we would struggle to make that happen.”

For Remmers, suburban single-family homes are a relatively new market. He created West Hills Homes Northwest in November 2015 to differentiate the product from his urban Portland offerings, which are built by another entity, Everett Custom Homes.

“It’s two different products we’re doing,” Remmers said. “We thought creating a different brand for this more suburban-type development would be effective.”

In addition to Findley Heights, Remmers recently built six homes in nearby Arbor Heights. All of those homes have sold. He’s also building 20 homes at North Bethany Creek. And at Norwest Cornell Road and 102nd Avenue, Remmers has built infrastructure in an 11-lot subdivision and plans to build homes this winter.

After several years developing homes in urban Portland, Remmers said working with Washington County was relatively simple.

“It’s dramatically easier to build out here,” Remmers said. “In the inner city, you’re building into existing infrastructure. The city of Portland permitting process is unbelievably different. It’s a night-and-day difference.”

In the Washington County suburbs, “you can definitely build more houses and get the permits in place and move forward faster,” he said.

North Bethany still has buildable parcels, and the massive South Hillsboro area is just getting off the ground.

“North Bethany has still got a fair amount of parcels left,” Chapman said. “There’s a little bit of relief out there, although they end up being expensive because the fees are high and the land is high and the cost of construction is high.”

In Portland, Remmers is close to finishing Hawthorne 31, a four-story apartment complex at Southeast 31st Avenue and Hawthorne Boulevard. A poke restaurant has signed on for part of the 4,000-square-foot retail space on the ground floor. That’s topped by 30 apartment units spread among three floors.

Remmers has faced criticism from some neighbors for his projects in historic areas such as Eastmoreland, where residents banded together to oppose a development that would have led to cutting towering sequoias.

Remmers is also developing a concept for affordably priced, market-rate condominium homes. Remmers is aiming to price the units at $299,000, a rarely seen price point in Portland, where single-family homes sold for a median price of $353,000 in August, according to RMLS, a real estate listing service.

“We’re trying to come up with some different ideas to build homes at a more affordable level,” Remmers said.

Remmers got into the development business through his father, longtime builder Wally Remmers. They remain partners in West Hills Homes Northwest and Everett Custom Homes. One of Vic’s brothers, Lee, is a project superintendent. Another brother, Mike Remmers, is an NFL football player for the Carolina Panthers. Vic Remmers himself played basketball at Oregon State University.

He said he enjoys working with his family on projects. “It’s fun to get to work with my dad and my brother every day,” he said.

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