Local Government Accountability Index

The Local Government Accountability Index


When it comes to affordable housing for everyone, Its time for local governments in the Portland Metropolitan Area to step up and be judged on their performance.  As part of our Local Government Accountability Project (LGAP), Affordable Oregon rated 19 jurisdictions throughout the Portland Metro Area on six different criteria:

  • System Development Charges (SDC’s)/Construction Excise Taxes (CET’s)
  • Building Permit Fees and Charges
  • Planning and Engineering (P & E) Fees and Charges
  • Time to Market estimates, based on feedback from industry professionals
  • Results of the Industry Survey Conducted by Affordable Oregon in April 2018
  • Total Combined Cost of All Categories

 

2018 LGAP Study LINK

 

Listed from “worst to first” here is how 19 jurisdictions in the Portland Metro Area rank:

 

#19:  The City of Portland

SDC Rank:  15 ($35,463.71) Building Permit Rank: 18 ($9,130.65)
P & E per Home:  17 ($18,705.83) Time to Market: 30 Months
Combined Cost per Home: 19 ($85,300.21) Industry Opinion: 19 (1.35)

FINAL LGAP SCORE:  1.38 (19 out of 19)

 

Portland is the single worst place for a builder/developer to do business in the Portland Metro Area and it’s not even close.  Garnering a final ranking of 1.38 on a scale of 1 (terrible) to 5 (excellent), Portland is the worst and it’s not even close.  You get an automatic rating of “1” just for being in the study.

If the average price of a new home in Portland is $425,000, $85,300, a full 20%, of the total cost of a new home in Portland is spent on permits, fees, SDC’s and interest carry due to delays. The median for government related expense in the entire Metro Area is $65,235.  It costs $20,000 more per home to develop in Portland than it does anywhere else in the Metro Area, or expressed as a percentage, it costs 25% more to get through the government process to build one home in Portland than it would on average elsewhere in the PMA.

The numbers get worse if you try to build a more affordable single-family home.  Any prospective builder/developer attempting to build a home for $300,000 in Portland (currently passing for affordable in this market) a large portion of the fees, permits and SDC’s will remain the same.  That means, for a $300,000 home, the city of Portland’s process is costing a new home buyer up to 28.4% for a $300,000 home.  How can you possibly build new, affordable housing in Portland when government expense is eating up 20-30% of the sale price?

Instead of looking inward, Portland is choosing to spend hundreds of millions creating low income, subsidized, rental housing for a fraction of the community.  These “affordable” apartment units do not convey home ownership, are solely available for a specific subset of the population and do nothing to help new homebuyers on the market or to make more homes available to the greater marketplace.

Perhaps one of the duties the City of Portland should consider undertaking while navigating the “housing crisis” is a comprehensive review of how best to mitigate their internal impact on the cost of a home.

 

#18:  The City of West Linn

SDC Rank: 19 ($40,945) Building Permit Rank: 15 ($5,704.55)
P & E per Home:  16 ($16,842.00) Time to Market:  24 Months
Combined Cost per Home: 18 ($81,091.57) Industry Opinion: 16 (2.12)

FINAL LGAP SCORE:  1.58 (18 out of 19)

 

Topping the list of cities using SDC’s and fees as weapons against the masses, West Linn is openly hostile to all housing development that includes more than one very large, custom built home on an enormous lot.  The City of West Linn is what happens when rich NIMBY’s take over a local government and apply their personal brand of isolationism to public policy.

West Linn has been a lost cause from an affordability standpoint for decades.  While high land prices and fantastic views are part of the equation, West Linn City Government has been unabashedly anti-growth.  Brutal estimates for “time to market” and the fourth worst industry opinion in the Metro Region consigns West Linn to the bottom of the barrel with Portland.  West Linn has no interest in being affordable, so there isn’t much of a point dwelling on their ranking.

Ironically, despite having the highest income level in the Portland Metro Area, West Linn still manages to have a lower overall fee structure than the City of Portland.

 

#17:  The City of Beaverton

SDC Rank: 17 ($37,303.00) Building Permit Rank: 13 ($5,653.86)
P & E per Home:  11 ($14,826) Time to Market:  20 Months
Combined Cost per Home: 15 ($70,983.07) Industry Opinion: 14 (2.72)

FINAL LGAP SCORE:  2.13 (17 out of 19)

 

The nice part about the City of Beaverton is that generally it’s pro-development and happy to see growth.  Unfortunately, the city is so bad at managing the process they can’t seem to get out of their own way.  In the industry survey, Beaverton consistently received comments like “they try hard, but they usually just make everything worse” or “Wow, if they could just get their staff to get off their asses and do their jobs it wouldn’t be that bad.”  Not a good thing if you want to consistently grow your community and preserve affordability.

Beaverton on average takes longer than most cities to complete the development process from raw land to finished lots.  Part of this is the presence of a couple of special districts (TVF&R and THPRD) who the City must bounce projects back and forth with for input.  Numerous developers reported wanting to tear their hair out dealing with Beaverton because there is so much confusion, equivocation and back tracking.  This quote from the industry survey sums it up nicely:

“We hold hold off on starting a development after final approval in Beaverton for a bit because even after we are complete, they usually come back with something they missed.  Their constant changes cost us thousands and we are so used to it at this point we just build it into the cost of our pro-forma.”

Rounding out the reasons Beaverton is hovering the toilet bowl of affordability, the city’s SDC total is third worst in the region and the Combined Cost per Home puts Beaverton at fourth worst.  THPRD’s ungodly, ever increasing Parks SDC is killing Beaverton overall.

 

#16:  The City of Lake Oswego

SDC Rank: 16 ($35,987) Building Permit Rank: 3 ($3,683.12)
P & E per Home:  15 ($16,539.00) Time to Market: 24 Months
Combined Cost per Home: 17 ($73,809.14) Industry Opinion: 18 (2.07)

FINAL LGAP SCORE:  2.69 (16 out of 19)

 

Unlike their dysfunctional, debutante twin, West Linn, the City of Lake Oswego at least feigns interest in creating affordability.  Don’t get us wrong, they don’t want anyone who needs “affordable housing” anywhere near their city, but they like the idea of working class people having somewhere to live.  To Lake Oswego’s credit, their building permit costs are among the lowest in the region, so if you can afford an $800,000 lot, then your fee to build an enormous house on it won’t break the bank.

Where Lake Oswego shows its real disinterest in being affordable is on the housing development front.  Ask any builder/developer and they will usually tell you they did a project in Lake Oswego-once, never again.  Constant meddling by city staff, unreasonable code provisions and lengthy time to market estimates make doing business in Lake Oswego cost prohibitive if your goal is affordability.  Lake Oswego, like West Linn, also keeps their SDC’s high (among the worst in the region) to discourage growth.  How else can they justify being $8k above the median for the region with a Transportation SDC set to increase repeatedly over the next 5 years?

 

#15:  The City of Tigard

SDC Rank: 18 ($39,637) Building Permit Rank: 6 ($4,707.39)
P & E per Home:  12 ($14,956) Time to Market: 18 Months
Combined Cost per Home: 16 ($72,500.40) Industry Opinion: 4 (3.17)

FINAL LGAP SCORE:  2.69 (15 out of 19)

 

A jurisdiction’s place on this list is often echoed in the Industry Opinion Survey.  Builder/Developers are generally sensitive to high prices and delays.  Tigard bucks the trend a little here because they end up in the bottom 5 despite having scored very well with industry and above average on Building Permits.

Unfortunately, sporting the second highest SDC rates and below average scores in every other category pushed them onto the steaming heap of the regions worst jurisdictions for affordability.  Oddly, Tigard scored incredibly well on the survey, but also generated the second most negative comments from participants.  Specifically, their Planning Department was pilloried repeatedly, with one respondent saying the Planning Department is full of “Thugs who get off on screwing you out of every nickel they can get.”  Well then…

Unfortunately, things could change here for the worse in the very near future.  Overplaying their hand, elected officials in Tigard rolled the dice and upped the tax rate on their local option maintenance levy.  They gambled and voters said no.  Now City Staff will suffer for their miscue.    The levy failure triggered automatic departmental cuts and the City is still facing a shortfall.  Things are likely to get worse here before they get better.

 

#14:  The City of Oregon City

SDC Rank: 7 ($27,098) Building Permit Rank: 19 ($9,778.14)
P & E per Home:  16 ($13,917.00) Time to Market: 20 Months
Combined Cost per Home: 9 ($65,459.82) Industry Opinion: 15 (2.58)

FINAL LGAP SCORE:  3.05 (13 out of 19)

 

Two cities on this list (Oregon City and Sherwood) long relied on “voter annexation” requirements in their city charters to stave off future development of properties.  It was a great way to be pro-affordability without ever having to worry about major new housing projects being added and to quietly support the NIMBY’s in your area who were trying to stop development.  Win-win for the local elected official.

Then the Oregon Legislature did away with voter annexation in 2016 and both Sherwood and Oregon City were exposed.  Watching the elected officials from these cities scramble to explain why they cannot allow growth after blaming voter annexation for their woes for years has been a real eye opener.  The City of Sherwood has lost its mind trying to stop future growth, while Oregon City has fallen back on their favorite old refrain: “Oregon City is poor, we don’t have any money, we can’t afford growth.”  Seriously, no city in the region cries poor more than Oregon City.

While Oregon City’s constant cries of poverty continue, the City seems to be getting plenty of money from building permits.  Ranked dead last in total cost for a building permit, it will cost anyone pulling a permit in Oregon City three times the regional leader’s (Washington County) price.  Why?  What about building permits in Oregon City costs so much more than everywhere else?  Combine that with a relatively slow and understaffed planning and engineering group and you can see why Oregon City is pedestrian when it comes to affordability.

Memo to Oregon City:  Time to take a hard look at your building permit costs and consider why they are so out of the whack with the rest of the region.

 

#13:  The City of Wilsonville

SDC Rank: 12 ($34,571.00) Building Permit Rank: 4 ($3,800.42)
P & E per Home:  16 ($13,917.00) Time to Market: 18 Months
Combined Cost per Home: 14 ($69,083.77) Industry Opinion: 3 (3.33)

FINAL LGAP SCORE:  3.08 (13 out of 19)

 

After years of swirling the affordability drain, Wilsonville has finally managed to limp toward the middle of the pack.  The Villebois Expansion Area, while expensive, has provided a steady drumbeat of housing for the past few years in a regional market badly in need of supply.  Industry opinion of Wilsonville is on the positive side for the first time in years and building permits in Wilsonville remain a relative bargain.  Everything is coming up roses for Wilsonville!

Don’t get too excited.  Wilsonville is still just outside the bottom five and while they have reached the “average” level for the LGAP scoring system, they still rank closer to terrible in most categories.

As Villebois wraps up and Wilsonville anticipates the addition of the Frog Pond Expansion Area, the City is raising its transportation SDC’s.  The list of projects included initially show the City still sees new development as a method to fund its current shortcomings.  Until Wilsonville changes its outlook on growth, it will always be near the bottom of this list.

 

#12:  The City of Hillsboro

SDC Rank: 10 ($32,592.00) Building Permit Rank: 14 ($5,676.42)
P & E per Home:  4 ($12,532.70) Time to Market: 20 Months
Combined Cost per Home: 10 ($65,467.80) Industry Opinion: 8 (3.02)

FINAL LGAP SCORE:  3.11 (12 out of 19)

 

This ranking is only shocking because it hasn’t fallen further.  If we had solid data from 7-10 years ago, Hillsboro would have been near the top of this list, at least in reputation.  Those days are gone and the good feelings most builders/developers had for Hillsboro are long gone as well.

The rankings seem to echo a common refrain we have heard and observed in Hillsboro over the past few years:  Lower level staff is good; Top level staff is brutal.  The Planning Director for Hillsboro received nearly a dozen complaints in the LGAP for being duplicitous, but the staff serving under him received great compliments.  Hillsboro’s Building Department staff also received high praise.

City Manager Dan Brown was leveled by critics in the industry opinion survey for his handling of the South Hillsboro Expansion Area. The Time to Market estimates for Hillsboro are probably skewed a bit because of the South Hillsboro process, which took FOREVER and led to the most expensive SDC’s for an expansion area in the region.

Still, new Mayor Steve Callaway has generated good buzz and seems to be a fellow willing to work with industry.  The bigger question is will he and his council step up and demand their upper level staff change their attitude.

 

#11:  Washington County

SDC Rank: 13 ($34,629.87) Building Permit Rank: 1 ($2,961.84)
P & E per Home:  9 ($14,445.00) Time to Market: 22 Months
Combined Cost per Home: 13 ($68,170.06) Industry Opinion: 13 (2.74)

FINAL LGAP SCORE:  3.18 (11 out of 19)

 

Here is the first major surprise of the entire LGAP process.  Washington County, long heralded by the home building industry as the “business friendly” government in the Metro area, is at best “Meh” when it comes to affordability.

Washington County is still #1 in building permit expense ($2,961.84).  That’s a good thing, since the county ranks second to last in building permit turnaround times, taking up to eight weeks to get a building permit done.  Our rankings show Washington County to be in the bottom half on SDC’s, Combined Cost per Home and in Industry Opinion.  Capping it off, Washington County has one of the worst Time to Market scores in the region.

Conversely, we received many positive comments on Washington County.  Those who have worked in the County for a long time seem to have existing relationships and they can use them to get things done faster.  Those who have not fostered long term relationships or came to the County lately are not feeling the love.  “I thought Washington County was builder/developer friendly” and “OMG it takes forever for Washington County to do anything” were common refrains in the Industry Opinion survey.

Still, the positive reputation persists.  Washington County is heralded as a leader on regional issues and often seems like the only jurisdiction consistently serving as a reasonable counter-point to Metro and the City of Portland.

Why is Washington County so poor at providing service and so good at setting the regional table?

Washington County leadership, the County Commission and the County administrative staff (County Administrator and Assistant County Administrators), work very hard on regional policy and pay a great deal of attention to what the region is doing.  Rightfully so, given that Washington County is the economic engine for the entire state.

Because the County is so focused on regional issues, it has failed to monitor and hold accountable those in County Government responsible for carrying out day-to-day operations.  Washington County has struggled to hire staff, failing to fill positions vacated by retirement and turnover.  What’s worse, as development ramped up over the last few years, staff has not kept up.  We have heard over and over they are doing their best to find people, but nothing changes.  Other jurisdictions are struggling, but not near as badly as Washington County.

Additionally, Washington County has major issues with how it charges for services.  The documents used to convey what charges are what for the department are so difficult to interpret it’s no surprise one of the largest complaints we received was “how does Washington County even figure out my bill?”  Builders and developers leave the department scratching their head trying to figure out why certain charges are included when others were not previously.  It’s just a mess.

Time for Washington County to look inward and fix their house.  The level of internal decay has reached “rot” status and it’s time for a thorough house cleaning.

 

#10:  Clackamas County

SDC Rank: 8 ($31,034.00) Building Permit Rank: 5 ($4,396.84)
P & E per Home:  18 ($18,943.60) Time to Market: 18 Months
Combined Cost per Home: 10 ($67,574.45) Industry Opinion: 6 (3.13)

FINAL LGAP SCORE:  3.18 (10 out of 19)

 

In a photo finish, Clackamas County finished just in front of Washington County in our rankings.  There will be plenty of people scratching their heads on that, but a closer examination finds Clackamas County making positive strides across most categories.

Clackamas County ranked in the top half for SDC’s and Building Permits and Industry Opinion of working with Clackamas County is higher than Washington County by a good clip.  Clackamas County’s largest flaw seems to be the cost burden placed on the development of new communities.  Ranking second to last in P & E Costs per Home. Clackamas needs significant improvement in this category.

we suspect the cause of Clackamas’s low P & E ranking is due to the number of special districts each developer must deal with in Clackamas.  Water, Sewer, Fire, Parks you name it, there is a special district for it in Clackamas County.  While special districts can sometimes offer services to the public for cheaper, they generally complicate the development approval process and tend to slow the whole effort down.

Clackamas County is not getting rid of special districts anytime soon, but they certainly have room to improve internally in their planning and engineering system if they want to be more affordable.

 

#9:  The City of Cornelius

SDC Rank: 11 ($33,814.00) Building Permit Rank: 10 ($5,273.05)
P & E per Home:  8 ($13,971.00) Time to Market: 18 Months
Combined Cost per Home: 11 ($66,258.31) Industry Opinion: 7 (3.04)

FINAL LGAP SCORE:  3.26 (9 out of 19)

 

Just on the “good” side of average for the LGAP, Cornelius’s ranking comes with a qualification.  Data on Cornelius, especially in the Industry Opinion Survey and in Time to Market is very low.  We received less than 10 responses total on Cornelius and the Time to Market estimate we received included a “we think?”

Still, the SDC ranking and Building Permit rankings are accurate.  Cornelius works with the City of Forest Grove to process permits, which is a good thing as the City of Forest Grove ranks highly across the board.

Cornelius has a major, multi-phase UGB expansion area being developed currently.  As the process continues, the numbers and interest in Cornelius will increase, making future scores more accurate.  For now, Cornelius ranks 9th and that’s not too shabby for a city with limited resources.

 

#8:  The City of Happy Valley

SDC Rank: 14 ($34,721.00) Building Permit Rank: 12 ($5,544.19)
P & E per Home:  6 ($13,218.00) Time to Market: 16 Months
Combined Cost per Home: 8 ($65,216.53) Industry Opinion: 1 (3.36)

FINAL LGAP SCORE:  3.27 (8 out of 19)

 

While Happy Valley ranks 8th in this survey, its top ranking on the Industry Opinion Survey is no surprise.  Because Happy Valley has grown exponentially over the past twenty years, staff is highly experienced in processing development applications and is probably the fastest at getting a community to market.  The extra effort saves developers a tremendous amount of interest carry on their projects and it’s why Happy Valley has a solid reputation.

Cost wise, the picture is not as rosy.  Again, planning and engineering are on the cheaper side, but SDC’s are on the high side and Building Permit rankings are on the backside of average.  With weighting slanted to those two factors, Happy Valley tumbled down the rankings.  Still, Happy Valley ranks above the average on four of the six categories we used to evaluate jurisdictions in the Metro Area.  If costs continue to rise, the City will slide down the list further, but currently, there is no jurisdiction doing more to get homes to market than Happy Valley.  Effort goes a long way.

 

#7:  The City of Newberg

SDC Rank: 5 ($25,616) Building Permit Rank: 17 ($7,811.76)
P & E per Home:  3 ($12,392.00) Time to Market: 18 Months
Combined Cost per Home: 10 ($65,467.80) Industry Opinion: 17 (2.28)

FINAL LGAP SCORE:  3.41 (7 out of 19)

 

Newberg is the only city outside of the Metro region we put in this year’s survey and we did so because it has such a high growth rate and because so many people who live in Newberg work within the Metro Area.  We considered including Scappoose and will probably include them in the next LGAP for the same reason.

The City of Newberg has earned reputation for being provincial, providing preferential treatment to local builders, developers and construction companies.  It’s fascinating how local builders and developers to the City and Yamhill County always seem to get their services completed first or with a lot less difficulty than those considered to be “outsiders.”  Those working in Newberg are aware of this phenomenon and while it may not show up in our rankings, here are just two of eleven comments we received about Newberg playing favorites:

“Never again.  Newberg is just one big good ole boys’ club and if you don’t live there or employ their preferred friends, neighbors or relatives, you might as well just sell your land to someone who does.”

“Well, since I don’t live in Newberg and never attended Newberg High School, my permit applications keep mysteriously ending up behind the local builders I compete with.  I guess they just speak their language and I don’t.”

Like Oregon City, Newberg has a ridiculous building permit fee total.  Why a city like Newberg has higher permitting costs than all but two jurisdictions in this survey is beyond us.  Sherwood is right next door and its building permits are less than half the price.  The simple answer:  it creates revenue and Newberg is taking advantage of it.

SDC’s are relatively cheap in Newberg and the time to market is average.  Planning and engineering costs are significantly lower than most cities in the LGAP, yet Newberg came out third from the bottom in Industry Opinion.  Clearly, Newberg’s penchant for playing to the hometown crowd is costing them in their regional reputation.

 

#6:  The City of Sherwood

SDC Rank: 9 ($31,659.78) Building Permit Rank: 2 ($3,326.73)
P & E per Home:  14 ($16,120.00) Time to Market: 18 Months
Combined Cost per Home: 10 ($65,467.80) Industry Opinion: 11 (2.89)

FINAL LGAP SCORE:  3.57 (6 out of 19)

 

If this were a ranking of “worst cities to annex your property” or “most expensive water on earth” Sherwood would take the award for worst city.  However, in terms of government expense and affordability, Sherwood can be a good place to do business.  SDC’s are right in the middle of the pack, Building Permits are cheap and Combined Cost is average.  Time to Market is decent too.  Sherwood nearly gets into the top five here because it scored average across the board and then crushed it in Building Permits.

Unfortunately, The City of Sherwood is also well known for meddling and their higher than average P & E Costs coupled with a middling industry opinion are starting to drag them back to the pack.  Recently gripped by a NIMBY overthrow of the City Council and Mayor’s Office, the new Mayor and City Council for Sherwood are turning away from common sense and leaning on “fear based “decision making.

Will Sherwood grow and shoulder their proportionate share of incoming growth to the region or will they “turtle up” and become the west side version of West Linn?  If recent UGB and annexation discussions are any indicator, Sherwood is turning its back on affordability.

 

#5:  The City of Gresham

SDC Rank: 3 ($21,778.00) Building Permit Rank: 7 ($4,881.55)
P & E per Home:  13 ($15,319.00) Time to Market: 24 Months
Combined Cost per Home: 6 ($59,578.57) Industry Opinion: 10 (2.90)

FINAL LGAP SCORE:  3.63 (5 out of 19)

 

What a difference a decade and a housing recession makes. Pre-2008, the City of Gresham would have ranked in the bottom half of these rankings.  Ten years later, Gresham is in the top 5.  What changed?  Mayor Shane Bemis.

Elected at the start of the housing recession, Gresham Mayor Shane Bemis has a done an excellent job of staving off SDC increases and building department fees.  Gresham ranks highly in SDC Fees, Building Permits and Combined Cost per Home.  Mayor Bemis has done this by not allowing his staff to look at the building industry as their bank account and by focusing on bigger issues affecting the city.

Existing issues in Gresham are almost exclusively with staff and staffing levels.  Planning and engineering in Gresham takes forever and drives up costs.  The abnormally long time to market cited by our sources drives up accrued interest on developer projects, making Gresham a tantalizing, but ultimately frustrating place to do business.

There is hope here, if fees can stay low and the City focuses on improving staffing and staffing levels.  Keep in mind, Gresham has most of the Pleasant Valley Expansion Area and all the Springwater Expansion Area still available for development.  The SDC’s in those expansion areas are currently half of South Hillsboro and North Bethany.  There is opportunity in those expansion areas to build at a significantly lower price than other expansion areas, so long as Gresham does not revise their SDC schedule.

 

#4:  The City of Troutdale

SDC Rank: 2 ($16,250.00) Building Permit Rank: 11 ($5491.01)
P & E per Home:  N/A Time to Market: N/A
Combined Cost per Home: 2 ($49,941.02) Industry Opinion: 5 (3.15)

FINAL LGAP SCORE:  3.77 (4 out of 19)

 

WARNING:  Take Troutdale’s ranking as the #4 city in the Metro Region for housing affordability with a grain salt.  Significant debate was had as to whether to even include Troutdale for the following reasons:

  • Troutdale is impossible to get data from online. Every other jurisdiction has their fees and charges online.  They might be impossible to find or indecipherable when you do find them, but Troutdale’s simply are not available.  Their website is so bad…Time to upgrade guys.
  • Troutdale is decent size, but its City Government is stuck in a different era. Getting anything out of these guys is tough.  They are super nice and want to help, they just seem incapable of getting you what you need.
  • Our Industry Opinion Survey was based on less than 10 actual records. That’s soft.
  • Because we cannot get solid information out of Troutdale, P & E plus Time to Market are incomplete.

We decided to leave this in here because Troutdale is a reasonably sized city in the Metro Area and because we believe in the future they will be a significant part of this ranking.  Someone needs to go help Troutdale enter the 21st Century.

 

#3:  The City of Forest Grove

SDC Rank: 4 ($25,118.50) Building Permit Rank: 16 ($5,857.36)
P & E per Home:  1 ($9,664.00) Time to Market: 18 Months
Combined Cost per Home: 3 ($53,839.87) Industry Opinion: 2 (3.33)

FINAL LGAP SCORE:  3.79 (3 out of 19)

 

Forest Grove is simultaneously the best kept secret in the Metro Area and its biggest enigma.  A development friendly community, generally happy to have growth, builders and developers have been steadily working in Forest Grove for 7 of the last 10 years.  New home growth came back to Forest Grove relatively quickly after the 2008 recession because land prices are more reasonable, the cost of government is less than most of the market and Forest Grove staff is decent to work with daily.

What is confounding about Forest Grove is its lack of commercial and industrial growth.  The very definition of a “bedroom community,” major employers are not located within city limits (other than Pacific University) and the town still only has one major grocery store.  There is a reason the students of Pacific University refer to it as “Frosty Grave.”

Probably the biggest hindrance to Forest Grove is its distance from major transportation hubs.  Highway 26 is the closest major freeway and its miles away. Tualatin Valley Highway runs through Forest Grove, but it’s a highway in name only and a parking lot the rest of the time.

Maybe because of these built in negatives, the City of Forest Grove keeps costs down to entice development and spur affordability.  Whatever the reason, the City of Forest Grove is a thriving place to build if you can stomach a little slower than average absorption rates.

 

#2:  The City of Tualatin

SDC Rank: 6 ($26,435.00) Building Permit Rank: 9 ($5,260.98)
P & E per Home:  2 ($12,266.00) Time to Market: 18 Months
Combined Cost per Home: 4 ($57,161) Industry Opinion: 12 (2.77)
FINAL LGAP SCORE:  3.97 (2 out of 19)

 

Tualatin is a great example of a city that has endured above average growth levels and has managed to keep an eye on affordability.  Scoring highly in five of the six categories in this survey, a builder/developer can expect to pay their fair share of costs for services rendered while also expecting their applications/permits to be delivered a timely fashion.

Long time Mayor Lou Ogden deserves a great deal of credit for holding the line on fees/charges.  In place for twenty years, Ogden is retiring and it will be interesting to see how the next regime in Tualatin chooses to move forward.  Tualatin has grown significantly on the commercial, industrial and residential front over Ogden’s time in office and the next Mayor has huge shoes to fill.

Industry Opinion on Tualatin is not in line with their overall ranking.  Most of the comments we received cntered on their need to update their systems and become more technologically proficient.  Perhaps the City has saved money over the years doing it the old fashion way, but most end users (builders/developers/construction) would prefer they spend some future capital modernizing.

 

#1:  The City of Milwaukie

SDC Rank: 1 ($13,719.00) Building Permit Rank: 8 ($4,992.98)
P & E per Home:  5 ($12,796.60) Time to Market: 18 Months
Combined Cost per Home: 1 ($44,707.99) Industry Opinion: 9 (3.00)

FINAL LGAP SCORE:  4.50 (1 out of 19)

 

How ironic is it that the #1 city (Milwaukie) to build or develop housing in from an affordability standpoint is almost completely indistinguishable from the worst city (Portland)? Sharing its northern border with the City of Portland, you can only tell you have entered Milwaukie from Portland when a sign tells you it happened or if you are attempting to build a new home or community.  In the latter case, the difference is night and day.

First, Milwaukie ranks best in SDC’s and the Combined Cost per Home.  Time to market is reasonable for a new project and their planning and engineering costs are far cheaper than their neighbor to the North.

Obviously, Milwaukie is clearly different than the City of Portland:

  • Portland has 639,000 or so residents, Milwaukie has just under 21,000. There is going to be significantly more overhead for Portland given their population differences.
  • Portland is responsible for financing huge infrastructure projects, while Milwaukie is bordered on all sides by development and often benefits from other jurisdiction’s infrastructure improvements.
  • Portland is a regional center for business and travel, Milwaukie is, well, Milwaukie.

Taking these clear differences into account, it’s still amazing that Milwaukie offers incredibly low development prices while simultaneously offering great access to transportation, entertainment and recreation.  Forgetting market influence (which might make homes in Milwaukie higher priced than they should be because of its proximity to Portland) Milwaukie is the most affordable place to build a home in the entire Portland Metro Area.

Unfortunately, Milwaukie has very little in the way of buildable land left and is unlikely to have any enormous projects in the future.  Still, it would make more sense at this point to shift major development in the South Portland area from Portland to Milwaukie if suitable land can be found to up-zone or build vertical housing.

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