Portland’s 2035 Plan: Maximizing Downtown Real Estate

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Comprehending Comprehensively

Back in 1988, the City of Portland sat down and created a plan for a livable, economically thriving city over the next few decades.
As a real estate agent, I drive around Portland every day, and I have to say that they did a pretty darn good job.
They revived the Portland streetcar, created an arts district downtown called The Pearl where only an old rail-yard existed before, and set the gears in motion that transformed the industrial area on South Waterfront into a livable neighborhood. A lot of other ideas went into that plan as well, which is why they called it the Comprehensive Plan. From parks to zoning to transportation, it was, well, comprehensive!
Now those city planners are up to it again. The Central City 2035 plan will be the first update to the Comprehensive Plan made almost 30 years ago.

Version 2.0: We have more people downtown, now what?

The original Plan’s goal was to give people reasons to stay in the central city instead of moving out to the suburbs, and clearly it worked. The biggest challenge ahead of Portland now is to refine what we have and make sure there’s room for everyone to live, work and move around.

How will the new Central City plan effect real estate? According to the City’s numbers, a full third of the land in the inner city is still vacant or underdeveloped. Adding condos and apartments here will take pressure off the residential real estate market in outlying Portland areas. But, as Portland continues to grow and accept new residents, we may never again see abundant inventory anywhere near downtown. With a solid plan in place to change the look and feel of Portland from a mid-sized city to a large city, while still maintaining our Oregonian character, home values will also mature across the entire region.

Where’s the land?

The new Central City plan focuses on development in that under-utilized third of the land. For example, the land around the Oregon Museum of Science and Industry, Lloyd District, Goose Hollow and the areas around the Morrison and Hawthorne bridges.
To accommodate more housing in these areas, the proposed plan is to allow greater heights for buildings. In fact, there will be no height limit on buildings in the “bridgehead” areas and the Central Eastside.
Height restrictions were once a way to preserve the “smallness” of Portland. We’re no longer thinking small! Planners have realized that allowing high-rise apartment buildings would bring the volume of people needed to have vibrant retail environments at the ground floor. As a quick side note, if you currently have a beautiful view and feel like that view is protected – keep in mind – the city can change the rules, and this plan could impact your current view.
Meanwhile, setbacks to the river are actually being widened, so that environmental impacts of all this development can be reduced and all the new residents can have access to the Willamette.

Improving Livability

According to the AARP’s Livability Index, Portland scores low on convenience in transportation. Congestion is the biggest issue. According to the website, “Not only do clogged roads wreck schedules and make appealing destinations hard to reach, they also increase air pollution.”
The Index looks at the total amount of time per year that the average driver in an urban area spends sitting in traffic. In Portland that number totals out to 27 hours a year in traffic, versus just over 14 hours for the median US household.

A new tourism hotspot?

Clearly, any sensible Central City plan would need to address this issue, and Portland is doing it in our own way — with a six-mile bike/walk “urban promenade” they’re calling the Green Loop.
The proposed route will connect the park blocks on the west side/downtown side of central Portland with a car-free path on the east side of the river. According to the Portland Tribune,

“The Green Loop would connect the two sides of the Willamette River at the Broadway Bridges and Tilikum Crossing, and link the Pearl District/Old Town, West End, Cultural District, PSU, South Auditorium, South Waterfront, OMSI, Central Eastside and Lloyd District.”

The eastside route is envisioned somewhere between Sixth and Ninth avenues. Planners are thinking big, hoping the Green Loop will become a signature tourist destination for Portland.

Portland Real Estate Changes

With all of this new development, what’s in store for current residential and commercial real estate owners in central Portland?

The Central City 2035 plan does propose amendments to the Zoning code, which means that the zoning of your property could change. However, the code will only move you toward more allowed uses, not fewer. In other words, if there’s something you’ve always wanted to do with your property — a commercial use, adding more units, etc. — you may be allowed to do it under the new rules. If you want things to stay the same, nobody is forcing you to change, although your neighborhood might change around you. You’ll be “grandfathered in”, such as the neat Victorian homes in the industrial areas near the Willamette River!

The bottom line is, Portland is changing, whether or not we have a plan to deal with it or not. While city planners are being proactive to accommodate growth, it remains to be seen whether their efforts will go far enough.

Growth Affects Home Values

According to an Oregon Live story that ran in June of this year, “The city’s population will grow by nearly 42 percent — reflecting about 260,000 new residents — over the next 20 years. Approximately 140,000 new employees will work in the city, a 38 percent spike… Mayor Charlie Hales said the plan comes at an opportune time, during a week when Portlanders found out an average home in the region now sells for above $400,000 and after a year when the city gained 1,000 residents a month.”

In fact, in June, the average home sale price in Portland went up to 412,000, while the median (which is a more accurate representation of the market) hovered around $362,000. And, when we look at the RMLS figures for this month, sales prices have dropped a little bit coming out of the summer frenzy, to 407,100 for the average and $355,000 for the median.

From Plan to Reality

The Portland City Council gave its stamp of approval to the Central City 2035 plan this summer, but changes won’t start happening until January 2018.
Although nearly 800 Portlanders commented and gave feedback on the plan before that vote happened, fine-tuning is still taking place. Amendments are currently being worked out, and there will be more opportunities for public comment, so stay tuned to the City’s website. And be sure to check out the Map App while you’re there, a great way to explore the Plan address-by-address.

The Portland real estate market will never stay static. Stay in touch with us. Subscribe to our blog by email, sign up for free monthly real estate market reports, and contact us when you’re ready to buy or sell.

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