When developer Jim Winkler heard the city’s Bureau of Environmental Services was planning to sell a big piece of land right on the Williamette River, he asked to take a look.
“It’s got view, visibility and location. It’s a superb site,” says Winkler, best known for turning an old hospital in North Portland into the new U.S. headquarters for Adidas.
But his company, Winkler Development Corporation, also specializes in affordable housing.
“We’ve developed it on a turnkey basis for housing authorities; we’ve built for not-for-profits,” he says. “And we’ve built for our own account.”
The Portland City Council has declared a housing emergency. Rents are going up about 10 percent a year. Roughly 2,000 people sleep on the street every night, and thousands more sleep doubled up with family and friends.
To Winkler, the cause of the region’s housing crisis is pretty straightforward: “It’s about supply,” he says.
The city’s population is growing. The number of affordable housing units isn’t keeping up. So when Winkler visited Terminal 1, that big piece of riverfront land, he had a big idea. The city could build an entire neighborhood of workforce and affordable housing on the site. He imagined partnering with nonprofits, perhaps providing a health clinic and a daycare on the site. Keep the rents low.
“It’s a big piece of ground; it’s near jobs; its near services; it’s near medical services,” he says. “And it’s in a jurisdiction that would allow people that have children to have their children attend high-performing schools.”
Winkler made an offer. He’d buy the land for $12 million and seek government subsidies and other financing to build up to 1,500 new units of affordable and workforce housing.
Multiple companies bid for the right to develop Terminal 1, including Costco. Winkler’s offer was among the highest-dollar bids, but he says city officials never replied to his letter.
Instead of reviewing the bids, a divided city council voted to take property off the market.
The council directed the Bureau of Environmental Services to lease Terminal 1 to the Portland Housing Bureau, which in turn promised the site to another developer, who has his own big idea.
Homer Williams wants to build the largest homeless shelter in Oregon at Terminal 1.
“People don’t like shelters. Well guess what?” says Williams, whose firm led urban renewal in the Pearl District and South Waterfront. “There’s about 3,000 people out there, living in the mud, pooping in a bush, who can’t even get a decent drink of water.”
Like Winkler, Williams sees a crisis unfolding. Baby boomers are retiring, and downsizing. At the same time, millennials are renting instead of buying homes.
“You can’t build enough apartments right now,” he says. “We’re going to be building barracks, dormitories, small houses. We need to start programs now because it’s a wave that’s coming.”
Williams is raising money from private donors to operate his shelter, a project he’s calling Harbor for Hope. The Housing Bureau has said it will let him use Terminal 1 for free, though the exact terms of a deal between the Bureau and Haven For Hope aren’t clear. The city says it has yet to draw up a lease or any other written agreement with Williams and Harbor for Hope.
Williams says he wants to start with a shelter for 100 people and then build it into something much larger: a transformational campus with shelter beds, health services and transitional housing. The campus, modeled after a similar homeless service center in San Antonio, Texas, could serve 1,500 people.
Housing advocates in Portland often say that homeless people need apartments not shelters. Shelters are crowded and noisy — scary even — and a temporary place to crash — not a home. Throughout the country, advocates for the poor have embraced a model called “housing first,” in which providing a homeless person with an apartment of their own is seen as the first step in rebuilding a life.
Williams sees it differently. He says a crisis this severe requires a different kind of thinking. He’s planning to provide addiction treatment, kennels for pets, medical care and three square meals a day.
“To try to tell me that’s not what people want or that’s not good as a temporary solution? I think they’re wrong,” he says.
Williams says he doesn’t think Winkler’s approach, building affordable housing, will get the city out of its ongoing emergency.
“The cost of it has always been so prohibitive,” he says.
The government typically spends $100,000 or more in subsidies to build a single unit — to house, say, one family. And that’s just the subsidy. It doesn’t include the ongoing costs to the developer or the nonprofit running the housing project.
Winkler agrees that building new affordable housing is expensive. He says the Housing Bureau should be looking for opportunities to buy and renovate existing inexpensive apartment buildings, a strategy he says is cheaper than building new affordable units.
But he also says that Terminal 1 represents a unique opportunity for the city at a time when the Housing Bureau has asked voters to pass a $250 million affordable housing bond on their November ballots.
Terminal 1 is currently zoned for heavy industrial use, meaning it can be acquired comparatively cheaply. Both Williams and Winkler’s projects would require rezoning the property, so Winkler’s idea would have faced opposition from those, including commissioners Nick Fish and Amanda Fritz, who say the city must preserve industrial land for industrial projects.
Still, Winkler says his plan could have the city could save $25,000 per unit on the site in land costs.
“I was thinking about specifically the very significant increase in land prices that has occurred over the past few years and the opportunity to acquire this parcel at an industrial price and then re-develop it for what is — I think the highest best use for the needs of the city,” he says.
Winkler says he respects Williams and believes the city council was “well intentioned” when it voted to set aside the property for Williams’ idea. But he questions whether the city is getting the best deal possible and whether Williams’ project will ultimately succeed in reducing homelessness.
“This is a process that is totally different than anything that I’ve ever seen and in most respects, antithetical to our general way of doing business,” he says.
“The demand for shelter is increasing,” says Andy Miller, executive director of the non-profit Human Solutions, “which really is another way of saying, the demand for housing is increasing.”
Miller says he was intrigued to learn about Winkler’s proposal.
“Frankly, what I would like to see happen, if we are going to make Terminal 1 or any other publicly owned land available for redevelopment to address the housing crisis, I would like to see it happen on a competitive basis,” he says.
Miller’s nonprofit runs a shelter for homeless families in East Portland, and it’s a good illustration of the competing needs the city must balance.
In the past year, it has literally overflowed every night with people.
But Miller says he has an even more daunting problem: Portland’s tight rental market is making it harder to move families out of the shelter and into permanent housing.
A year ago, families stayed at the shelter for 20 days on average. Now they’re staying for more than 40. In Portland, there’s nowhere else for them to go.