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Developer vents about city housing policies

Tressa Rossi - Monday, April 24, 2017

Apartment developer/landlord vents about city housing policies

Tom Brenneke says dysfunctional system slows new housing in Portland as need increases.
COURTESY GUARDIAN REAL ESTATE SERVICES - Tom Brenneke, who spoke at the opening of the NAYA affordable housing project that his company built, recently quit a city housing advisory panel.

COURTESY GUARDIAN REAL ESTATE SERVICES - Tom Brenneke, who spoke at the opening of the NAYA affordable housing project that his company built, recently quit a city housing advisory panel.

On March 23, Portland developer and property manager Tom Brenneke spoke at the grand opening of a 40-unit affordable housing complex in Lents. His company, Guardian Real Estate Services, built the project for the nonprofit Native American Youth and Family Center. It will be used to place foster children with their grandparents together in a cooperative community setting.

"At a time when affordable housing is a particularly controversial subject in Portland, we're especially proud to launch NAYA Generations," Brenneke said of the $12 million project. "This is more than housing — it's a true community that promotes stability, collaboration and caring relationships."

The event was well attended by community leaders, including Mayor Ted Wheeler, Housing Commissioner Dan Saltzman, and representatives of Oregon U.S. Sen. Ron Wyden, D-Portland, and Congressman Earl Blumenauer, D-Portland. Few of them knew that just three days earlier, Brenneke abruptly resigned from the Portland Housing Advisory Commission, an appointed volunteer committee created to advise the city on a broad range of housing issues.

Brenneke had brought a wide range of experience to the commission. His company develops both market-rate and nonprofit housing projects. They include The Yard at the east end of the Burnside Bridge and Bridge Meadows Beaverton, another housing project that helps foster children. Guardian also owns approximately 3,000 rental units and manages 10,000 more.

COURTESY GUARDIAN REAL ESTATE SERVICES - The new NAYA Generations affordable housing project in Lents, where foster children live with their grandparents.

COURTESY GUARDIAN REAL ESTATE SERVICES - The new NAYA Generations affordable housing project in Lents, where foster children live with their grandparents.

Projects taking longer to approve

Brenneke sat down with the Portland Tribune last week to explain what drove him to resign from the commission after serving on it for around three years. Although the March 20 letter to Wheeler and Portland Housing Bureau Director Kurt Creager did not state a reason, Brenneke says he was growing increasingly frustrated working within what he calls a "dysfunctional" system that is intended — but repeatedly fails — to quickly create more housing for existing residents and newcomers.

"It takes years to get anything built, it really does. And affordable housing projects take even longer," says Brenneke, echoing complaints made by other developers over the years.

Brenneke insists he loves Portland and believes its elected and appointed officials are sincerely motivated. But he also believes the many policies adopted in recent years run counter to their goal of encouraging the construction of as much housing as quickly as possible, including affordable housing for the poorest residents. And he says the process of submitting building plans, meeting design criteria, obtaining permits and completing projects is too complex, costly and time consuming — and getting worse, not better, as the need for more housing is increasing.

"A few years ago, it took three or four months to get a permit. Now it's six to nine," Brenneke said.

Panel not consulted

Some of Brenneke's frustrations focus on the commission he resigned from. It was created by the City Code in 2010 to advise the director of the Portland Housing Bureau, the housing commissioner and the City Council on housing policy, program and budget issues. It is also intended to serve as a public forum on housing issues as they emerge in the community. But Brenneke says city officials rarely asked the commission to weigh in on the major issues they are discussing.

Among other things, Brenneke says officials did not seriously engage the commission on such hot-button issues as the Housing State of Emergency, inclusionary zoning or the new requirement that landlords pay relocation costs for tenants facing no-cause evictions. And he was disappointed when a new "stakeholder group" was appointed to help decide how to spend the rest of the $258.4 million affordable housing bond approved by the voters last year. He says such groups frequently delay important decisions from being made.

"It will be a year or longer before any of that money is spent," Brenneke predicts.

And as a landlord, he was then shocked that no such group was formed to provide feedback before the no-cause eviction vote. Now, Brenneke says, the city is lobbying the 2017 Oregon Legislature to lift the statewide ban on rent control programs — but will only consult with landlords about it afterward.

And even then, Brenneke does not believe city officials take the concerns of the development community seriously. When Commissioner Dan Saltzman was crafting the inclusionary zoning policy, he was repeatedly warned that requiring affordable units in buildings with more than 20 apartments would make them impossible to finance. The council approved the policy anyway. There was a surge of permit applications for buildings with 20 or more units before the policy took effect on Feb. 1, but they dropped off sharply after that.

COURTESY GUARDIAN REAL ESTATE SERVICES - Tom Brenneke at the March 23 opening of NAYA Generations behind City Commissioner Dan Saltzman and next to Mayor Ted Wheeler (center, back row).

COURTESY GUARDIAN REAL ESTATE SERVICES - Tom Brenneke at the March 23 opening of NAYA Generations behind City Commissioner Dan Saltzman and next to Mayor Ted Wheeler (center, back row).

Supports density strategy

Brenneke strongly supports the city's policy of adding housing by increasing density in urban centers and along major transportation corridors. He favors the tall apartment buildings allowed in recent land use plans, like the state-required Comprehensive Plan update approved last year by the council. But actually getting them built is another matter, Brenneke says. They are frequently opposed by neighborhood associations and two city committees — the Portland Design Commission and the Historic Landmarks Commission — resulting in months of delays, design changes that reduce sizes, and cost increases associated with the redesigns.

The two commissions have authority over projects in some of the most popular parts of town.

Brenneke says things go much more smoothly when they are not involved. Then, much more specific community design standards apply that are much easier to understand and meet. Brenneke says building the 166-unit Oxbow49 multifamily project in the John's Landing area was relatively simple under those standards.

Brenneke said he was surprised by the controversy that erupted when the city agreed to spend $37 million from the affordable housing bond to purchase the 263-unit Ellington Apartments from his company last December. The total cost was $47 million. A private purchaser would have increased the rents, he says, forcing at least some of the tenants to move.

Although the Portland Housing Bureau promised to decrease the rents, Wheeler put an immediate halt to all further bond spending until new guidelines can be adopted. The Affordable Housing Bond Stakeholder Advisory Group that is considering them met for the first time last Monday. It is scheduled to meet seven times over five months before making any recommendations.

"I thought the city got a good deal (on the Ellington Apartments) and the reaction was like we had done something wrong," Brenneke says.

Brenneke says the final straw was when Creager admitted the Housing Bureau had used inaccurate figures about mulitfamily housing projects needing repairs to secure $500,000 from the council last year for a new loan program. The bureau claimed 400 properties in East Portland had been identified as needing repairs when the actual number at the time was less than 20.

Although the commission reviews the bureau's budget before it is submitted to the housing commissioner, Brenneke couldn't remember hearing anything about the program before.

"I was embarrassed by that, and wondered how many more things like that were out there" says Brenneke, adding that he believes Creager is a good administrator handicapped by too much bureaucracy.

The Oregonian broke the story about the inaccurate repair data on March 19. Brenneke resigned the next day.


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