FILE - A triplex on the corner of Northeast Sixth Avenue and Northeast Ainsworth Street in Portland, 2019. A 2019 bill by the Oregon legislature changed single-family zoning rules to allow more multi-family dwellings like this in cities looking to grow more dense.
Jeff Mapes / OPB
The city of Portland changed its zoning rules in 2020 with the goal of producing duplexes, cottage clusters and other multi-unit housing in areas traditionally zoned for single-family homes. The idea was to provide more options at more affordable price points for the city’s growing population. A new report shows the initiative is largely working. It says more middle housing units are now being built than single-family homes, and those units are selling for $250,000 to $300,000 less than a new, market-rate detached house.
Morgan Tracy is a senior planner in Portland’s Bureau of Planning and Sustainability. He joins us with more of the report’s key findings.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. We start in Portland with a success story. A recent report found that the city’s plan to allow more housing units in areas that used to be only for single family homes is actually working as intended. Morgan Tracy is a senior planner in Portland’s Bureau of Planning and Sustainability. He joins us once again with an update. Good to have you back on the show.
Morgan Tracy: Yeah, great to be here, Dave. Thanks.
Miller: Can you remind us briefly what the city changed in terms of zoning with its residential infill projects?
Tracy: At a high level, back in around 2021, the city adopted changes that enabled what we call middle housing types. These are types of housing that are between a single family house and a larger apartment building – things like duplexes, triplexes, fourplexes and more recently, cottage clusters – to be developed in our single dwelling zones.
Miller: What are the metrics that have impressed you the most in this new report?
Tracy: We previously did a report after the first year of implementation to see how we were doing. But it was sort of a point in time, so we couldn’t see any sort of trends from that information. This last report, we looked at data over the five-year period from 2018 to the first half of 2024 to get at some more of that trend information. What are we seeing in terms of mental housing development? Is it occupying a greater share of new housing units in single dwelling zones? And more importantly, we were able to start looking at some of the comparative sales data information, and that was really interesting.
Miller: So what in particular stands out to you? What’s the good news here?
Tracy: The most outstanding bit of information is that we’re producing about 1,400 accessory dwelling units in middle housing since RIP passed – the Residential Infill Project that is. And those units are selling for somewhere between $250,000 to $300,000 less than a market rate detached, new single family house would be. So we’re seeing really good sales price information, more units being produced overall and in various parts of the city, all over Portland’s neighborhoods.
Miller: I thought I read that a majority of this middle housing production has actually been in parts of inner Southeast, North and Northeast Portland that were already seeing a lot of activity. Am I wrong about that?
Tracy: No, that’s, that’s accurate. But what we still are seeing, to some degree of surprise, is that there’s still a level of middle housing that’s occurring in the western neighborhoods and outer eastern neighborhoods as well, just not to the level and extent that we’re seeing in inner east side neighborhoods.
Miller: As we talked about a number of times in the past, these zoning changes … First this was a Portland project that seemed like Portland was going to lead the way, and then the state stepped in and said we’re going to make this happen statewide, one of the now-governor’s big priorities. But the idea was it didn’t require developers to build triplexes or cottage clusters, it just made those types of housing possible. And there were big questions about whether or not the market developers would take advantage of that possibility, or how long it would take for them to do so. Did you think it would happen this quickly?
Tracy: Yeah, that’s a great question. One of the frustrations with most long-range planning projects is that you spend years doing the planning policy, and then it takes years to see the result. And what’s really surprising about the Residential Infill Project is we started seeing results immediately, to an extent that was a bit surprising in terms of the production numbers. I think one of the real distinguishing factors of our approach that other cities may or may not have applied is that we also, at the same time as allowing these additional housing types, imposed limitations on the size of the building. So roughly a 2,500 square foot house would be allowed. But a duplex, triplex or fourplex would get incrementally more square footage that was allowed. So this changed the market dynamic for builders from building large, single, detached, expensive houses to trying to build more multiple smaller units instead.
Miller: What have you learned about the market desire for these kinds of units? I imagine they’re being built because people want to buy them. Is it as simple as that?
Tracy: Well, there’s definitely a large pent up demand for entry level homes. So if you think you’re trying to get into the housing market today, there’s not a lot of options available in the current market. These are brand new units that are being offered at the $400,000 price point, which is very attractive to most buyers that are trying to graduate from, say, an apartment situation into their first home, or for other folks that are trying to downsize from a large house into something that’s newer, smaller and easier to maintain.
Miller: Is the price per square foot roughly the same? Meaning, is the price difference between a unit in one of these multi-unit buildings – a duplex, triplex or maybe larger – largely because these homeowners are buying less space?
Tracy: Yeah, that’s a big part of it. There’s two factors at play. One is the cost of the land, which is very expensive in Portland, is able to be divided over multiple units. So they’re all sharing that sort of upfront cost. And then the size of the units themselves are smaller. When you look directly at a cost per square foot house versus a middle housing unit, the cost per square foot is gonna be higher for middle housing simply because you’re still spending the more expensive parts of construction. The kitchens and bathrooms are expensive to build and each one of those units has roughly the same number. Whereas, the less expensive square footage, the bedrooms, hallways and other big areas that don’t have a lot of additional construction costs, there’s more of that in a single family house.
Miller: One of the concerns that I remember hearing about when this was being rolled out or considered was that demolitions would increase. But this new study says that that didn’t happen, that they’ve stayed roughly the same. Why not?
Tracy: That was also an issue that came up during our public discourse, and it was an issue that sort of prompted the project to begin with, along with compatibility and increasing housing access. But interestingly, the data shows that the numbers of demolitions are relatively static across the pre- and post-RIP adoption period. But what’s really impressive about that is prior to RIP, when we had a site being demolished, on average we’re seeing about one-and-a-half units being built as a result, across all those different sites. Now, with these new housing types available, when there is a demolition that happens, we’re seeing almost four units to one being replaced, which is a really net positive. I think what that’s saying is we’re seeing more housing, more options, at lower prices, without a spike in demolitions – which is really a win, win, win.
Miller: You mentioned a lot of different housing styles are all lumped together as middle housing, including ADUs, which I think of normally as sort of one-unit small buildings, attached or not. Which versions of housing seem to be winning in the marketplace right now? Which ones are most common?
Tracy: So the ADU has been the sort of the “darling of our middle housing” prior to RIP. And now after RIP went into effect, it was fourplexes. And then a couple of years later, when we adopted the changes the state passed that allowed cottage clusters, we’re starting to see a lot more cottage cluster type units emerging.
But the real interesting thing about that is if you think about the types of units that are being created, ADUs sort of satisfy that studio or one bedroom type segment. Fourplex units are typically two bedroom, two bath type units. And cottage clusters, we’ll see a mixture of unit types in a cottage cluster development, being two bedroom, three bedroom, and so on. So that’s really nice. We see a lot of diversity in the range of middle housing units that are now available for buyers.
Miller: We’ve been talking so far really just about what the Portland story looks like, but I’m curious about the big picture. Can you now compare Portland to other large Western peer cities, to know whether or not this policy has led to a slower growth in housing prices than in places that did not get rid of single family zoning?
Tracy: Well, that’s a great question. We didn’t go that deep in our report, but it’s something we certainly will be interested in taking a look at.
I will note that when we started, we were sort of at the vanguard, the forefront of middle housing policy. Seattle was kind of leading and then they hit a bit of a snag, so they were a little bit behind. But it’ll be interesting to compare with Seattle’s approach and Portland’s approach. And Sacramento recently adopted a policy that’s very similar to what we adopted. So it’ll be interesting to see how all those cities sort of emerge.
Miller: It’ll also make it harder for us to compare ourselves. If everybody else is doing what we’re doing, there’s no control in the experiment.
Tracy: Yes, and the experiment is also challenged by a number of other factors that are sort of outside of the zoning realm, like market, other codes and those sorts of issues.
Miller: Morgan Tracy, thanks very much.
Tracy: Thanks for having me.
Miller: Morgan Tracy is a senior planner in Portland’s Bureau of Planning and Sustainability.
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