Paying for a Tesla, Getting a Scion

The city of Portland has agreed to contribute $6 million towards the cost of a high-rise, mixed-use complex because the building is supposed to include 60 units of “affordable housing.” “That’s like paying for a Toyota and getting a Tesla in return,” Portland Mayor Ted Wheeler enthused.

No, Mr. Mayor. It’s more like paying for a Tesla and getting a Toyota. A very small Toyota, also known as a Scion.

The building in question is supposed to make innovative use of cross-laminated wood to form one of the tallest wooden buildings in America. Normally wood is not allowed for high rises due to fire danger, but the Oregon wood products industry has been trying to boost the use of this material and claims it has overcome the fire problem. The project developers, coincidentally called Project (technically, Project^, but pronounced “project”), are so enthused that they are willing to put up $1.2 million of their own money towards the $29 million structure.

In other words, they aren’t very enthused, that being just 4 percent of the cost. The rest is supposed to come from federal, state, and local affordable housing funds–and they are still begging for the last $2 million.

Willamette Week, among others, finds this project questionable, claiming that the building is going to cost more than $650 per square foot and each apartment will cost more than $567,000. But this arithmetic is faulty as there are supposed to be 60 apartments plus retail and office space, so each apartment has to cost less than $483,000.

At 90,000 square feet, the cost per square foot is $322. The two-bedroom apartments are supposed to be 660 square feet, for a cost of about $212,665. Add the cost of common areas and the apartments as condos would probably sell for a little more than $250,000. Though Willamette Week‘s numbers appear to be wrong, even $322 per square foot is a Tesla price for residential construction.

The apartments are supposed to be affordable to people earning 60 percent of Portland’s median income. The city’s median family income in 2016 was slightly more than $80,000, 60 percent of which was $48,000. Following the guideline that the family should spend no more than 25 percent of its income on a mortgage, at current interest rates (3.75%) the family could afford a 30-year loan of $216,000. Provided families earning 60 percent of median incomes have $54,000 in cash to spare for a 20 percent down payment, the apartments are indeed affordable.

Other than the down payment, there’s just one hitch: the Scion-sized apartments at 660 square feet. Draw a square that is 25.7 feet on a side. Or draw a rectangle 22 feet wide and 30 feet deep. Now divide that into two bedrooms, a living room, kitchen, dining area, and at least one bathroom. Is that really livable?

By comparison, for $212,500, you can buy a 3,083-square-foot, four-bedroom, three-bath home in Houston. For $245,000, you can buy a 2,500-square-foot, four-bedroom, 2-1/2-bath home in Raleigh. For $249,000, you can buy a 3,932-square-foot, five-bedroom, 3-1/2-bath home in Oklahoma City. A family making $48,000 a year in one of these cities would have no problem finding quality housing.

So why should Portland be excited about spending millions of dollars of government funds to provide dinky apartments to moderately low-income families? Moreover, if Portlanders are really willing to pay $250,000 for a 660-square-foot condo, then why are any subsidies needed at all? This is just another way to scam taxpayers out of their money in order to provide huge profits for developers.

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14 thoughts on “Paying for a Tesla, Getting a Scion

  1. Frank

    “By comparison, for $212,500, you can buy a 3,083-square-foot, four-bedroom, three-bath home in Houston.”

    Yeah, but then you have to live in Houston.

    I’m assuming there’s a pretty gosh darn good reason why the AP chooses to live in a $600k house on the banks of the stunning Metolius in the shadow of Mt. Jefferson.

    You know. Instead of Houston in a $212k house.

  2. JOHN1000

    AP isn’t asking for federal/state/local funds to pay for his house. People presumably have the right to live where they want and where they can afford.

    It’s taking other people’s money by force (taxation) to give a few people housing in areas where they can’t afford. My guess is many of the affordable people don’t move to where they actually want, but if the government money says “move here”, that’s where they go..

  3. Lewis

    “The Oregon wood products industry has been trying to boost the use of this material and claims it has overcome the fire problem.”
    But CLT was not developed by the Oregon wood products industry; it is already in use, albeit on a small scale appropriate to new building techniques, in Scandinavia and the UK and Canada. Regardless of the benefits of this housing project, I agree with Oregon people should be allowed to use CLT in tall buildings if they want to. The buildings created with CLT look really attractive, and my understanding is that they could offer some advantages in terms of construction time and materials waste. I read a bit about CLT last year, and it seems that the concrete industry is active in promoting regulations against it.

  4. prk166

    Unfortunately for too long “affordable housing” in cities has meant government subsidies to put put middle class people into posh condos. IIRC a key driver is federal HUD money that HUD will give to cities w/ some strings attached. The cities then loan it to the developer who must offer X% of space for discount.

    @antiplanner, i thought the income requirements were actually based on the zip code and not the city as a whole. Do we know for sure it’s based on city median income? I ask because for some of these redev projects like around Denver’s Union Station, the median income for the zip code is six figures. And if that’s the case we’re looking at single folks making $65K / year being subsidized to by 1/2 million dollar condos.

  5. prk166


    I agree with Oregon people should be allowed to use CLT in tall buildings if they want to. The buildings created with CLT look really attractive, and my understanding is that they could offer some advantages in terms of construction time and materials waste. I read a bit about CLT last year, and it seems that the concrete industry is active in promoting regulations against it.
    ” ~lewis

    There’s a “let’s not let people die like they did in the Bronx” industry too. We know very, very, very little about these wood high rises compared to traditional high rise structures. What testing that has been done shows that fire does spread faster and it especially exposes weaknesses like sheetrock that isn’t well fitted. Steel and concrete is much more forgiving with that sort of construction. We also see things like fire more quickly spreading external to the structure via windows.

    The point of these regulations should be to ensure people can get out if there’s a fire. What testing we know shows these wooden high rises pose a real, tangible higher risk if fires break out. And we know that the city of Portland LOWERED the fire standards of it’s ordinances to allow for this building.

    I’m not entirely opposed to this. Just keep in mind that we humans are horrible at fully recognizing the risks of the fat tails. We want to try to avoid fires, exponentially so when you’re looking at the potential for hundreds of people in a building dieing.

  6. LazyReader

    This wooden stuff, otherwise known as Glued laminated timber or Glulam
    was pioneered in Germany, promoted as green architecture.
    A 2002 case study comparing energy use, greenhouse gas emissions and costs for roof beams found it takes two to three times more energy and six to twelve times more fossil fuels to manufacture steel beams than it does to manufacture glulam beams.
    But steel and concrete has it’s advantage namely durability, fire resistance and it’s largely invulnerable to moisture. And it’s biggest advantage over wood is steel and concrete are inedible to organisms that love to munch on cellulose.

  7. Frank

    “AP isn’t asking for federal/state/local funds to pay for his house.”

    Good point.

    Are the people who will be recipients of this government housing project asking for federal/state/local funds to pay for their housing? Or did planners come up with it on their own as they are wont to do?

    Let’s not forget that the AP enjoys a sizable subsidy from the federal government for fire protection for his property. Probably larger than most since his house was built in a forest that frequently burned historically.

    Not that any of this matters.

    The real issue is that he touts the shit hole that is Houston while he lives in paradise.

  8. Frank

    “You may think Houston is a shit hole”

    It is a shithole. But so are most cities. I’d even call most of Portland a shithole.

    “but a lot of people choose to live there”

    A lot of people choose to live in Portland, Seattle, NYC. Just because there are a lot of people living in one spot, that means it’s somehow not a shithole.

    “and the population is growing”

    Yep. So are the populations in shitholes like Portland and Seattle. Your point?

    “It obviously has its attractions.”

    And according to the AP the main attraction is cheap housing. He doesn’t seem interested in Houston because he lives in what I would characterize as paradise. Because you can’t drive to mountains, ski resorts, the coast, national parks, or real forests from Houston. Plus there are a lot of people there who aren’t white. It does provide fantastic airline access to better places, though, so I’m sure that’s a huge amenity for some.

  9. The Antiplanner Post author

    For the record, my house isn’t worth $600,000 (I wish it was) nor is it on the banks of the Metolius. As a native Oregonian, I remain here to defend my homeland from the regulators and Californicators who are trying to turn Portland and other Oregon cities into Los Angeles. Someday I might move to Texas, though San Antonio is more to my liking than Houston.

  10. prk166


    A 2002 case study comparing energy use, greenhouse gas emissions and costs for roof beams found it takes two to three times more energy and six to twelve times more fossil fuels to manufacture steel beams than it does to manufacture glulam beams.
    ” ~ lazy reader

    I don’t think that we should be surprised that group founded to promote the religion of environmentalism has found that their pet flavor of the day, wood, was “more energy efficient” should we? Apparently wood is sustainable. Whereas steel and concrete are not. Only “sustainable” can be anointed.

    The problem with these claims isn’t just who’s doing the measuring but what they’re measuring. For example, a few industry folks have claimed that some these studies do things like assume all wood waste can be used as energy, assume 100% conversion of burning that waste into energy and assume zero emissions from it. Anyone whose been in a house with a wood furnace knows they it ain’t a zero emission process.

    I suspect the real reason for this is the wood industry knows steel is creeping into single family housing. They’re able to make steel more cheaply ( aka with less energy; more sustainably ). Steel framed houses take ( a little ) less labor to build and lend themselves to a tighter, more energy efficient house.

    Which comes back to the measurements. It only tells use so much to measure the energy used to make the beems. It doesn’t tell us how much more or less energy is required for their installation, transportation, etc.

    And of course, if CO2 is the issue. We could just build some nuclear plants. Then steel production would largely be CO2 free.

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