Okay. Welcome to the City
Center Redevelopment Board
meeting for March 19th, 2026.
So, Kelly, can we start with
the roll call?
>> Yeah. Thank you. President
Fazio here. Board member
Krippaehne here. Board member
slick here. Board member Pahlka
here. Board member. Friend here.
Board member. Copenhaver. He
let us know that he would be
absent. And board member
Anderton. He also let us know
that he would be absent. Just a
reminder to turn your mics on
before you speak and turn them
off when you're done. Thank you.
>> All right. Thank you. So,
can I get a motion to excuse
David Copenhaver and Anderton?
Can.
>> So moved second.
>> Okay. All in favor? Aye. All
right. Thank you. Oh, and.
Belkot. Okay, so the next item
is the approval of the minutes
from February 19th. Any
comments or motion?
>> No comments. I'll make a
motion to approve.
>> I have a second. Is that me.
>> A second.
>> Okay. All right. Any
discussion? Okay. All in favor,
say aye.
>> I, I I.
>> All right. So minutes pass
so we can move with Patrick on
the executive director report.
>> All right. Good afternoon,
everybody. Just quickly on my
list, the subcommittee meeting
report subcommittee did meet
and got a preview of the the
two items that you're about to
get. You're about to hear about
both the active ground floor
study as well as the
development activity report
gave us some feedback on the
development activity report in
terms of kind of what might be
of interest to this group, but
the subcommittee can weigh in
when we have those items
presented. Development pipeline
report, we're continuing to
bring it to you even though
it's it's still kind of sad.
But we do have, you know, we
continue to see new, new
projects tickling the
residential side that show up
in pre app so that, you know,
it's encouraging. When will
actually this is this is the.
>> My.
>> So we will get into the
topic of. Yeah, this is yeah.
>> Can you move from your is
your computer. How's your
computer? Is your computer on?
CVTV?
>> Screen?
>> Right now?
>> Is that can everybody still
here? Mikey, can you hear us?
>> Okay.
>> Mikey, can you hear us? Okay.
All right, we'll give that a
shot. So as I was saying that
some of the issues around the
development pipeline report
will will basically all the
issues we'll be talking about
in more depth when we get to
the development activity report.
But but what I was saying is,
you know, we continue to see
new projects show up in app and
not everything that goes to pre
app moves forward, but it is
encouraging. I think if you, if
we think about the permitted
data, you're going to see the
signs are encouraging maybe a
few years out, but but not not
in the near term. So you have
those two projects to Harmony
village number two on your map.
And number four where we're
seeing, you know, between those,
those are 300 potentially new
units. And so that's, that's
encouraging. The other thing to
highlight that is that we are
beginning to see activity at
the Vancouver Innovation Center
on the residential side. So
they've they've, they've begun
the permitting process. And you
can see they're in land use for
the early part of their land
use side. Is it. Anyway, I
think Chad may be able to. We
can maybe answer this later on,
but I think there's more units
than what we're showing here
because I think they have two,
two different buildings, two
different buildings they're
talking about. But anyway, we
have obviously been working
with the owners of the Vic for
many years, both on the
commercial side, but also the
the partners they have on the
residential side. So we're it's
encouraging to hear them moving
forward. And that's obviously
pretty significant development
on the on the east side. And
then we have really the, the,
the one project that moved into
construction since the last
time is this Vancouver clinic
commercial building at, in
Columbia Palisades. And then
projects that were completed.
You can see these are the. Kind
of commercial buildings as well
in the same Columbia Palisades
area led by our own David
Copenhaver. So that's the
update we'll get. Like I said,
we'll get into this topic in a
lot more detail in a few
minutes. A project update side,
I, I don't, I don't know,
there's not much to report of
the. And some of it once again
will come up in development
activity. But, but we're still,
there's still some milestones
to reach before we before
Lincoln can move forward on
Waterfront Gateway. But we
think we're getting close on
that. That's the six story wood
frame code work that we're
doing. We believe we might have
a path forward to get that in
place in a couple of months. So
I had the chance. The the
coincidence there was a
coincidence last night, I was
sitting next to our building
official and our fire. The
deputy fire chief, who's in
charge of buildings at an event.
And I said, what do you think?
And they were very optimistic
about us getting a code in
place so that Lincoln can begin
designing to that to that
standard, so that that would be
great. And that that puts them
on a path to basically begin
construction at some point,
maybe next year. So that's what
we're talking about because
they need 12 months to, to get
to design the building to that
new standard to then begin the
permitting process. So the
sooner we can get them started,
the sooner and 27 they can
start, but it'll, it'll be a
nice outcome if they break
ground in 27, I think is what
we're looking at in terms of,
of. And I guess just a quick
update on the height since I
always do where we're. The
different projects are really
challenged by the lack of state
funding. So we don't have
progress there, but we do have
a clear path on infrastructure.
We, we will begin the first
major infrastructure project on
the Heights sometime in the
next few months. We've. We've
received all the bids and we're.
So we should be in a position
to award that contract. So
that's the McCarthy mill plain
intersection. And then the
Grand Loop, which is the big
infrastructure project that
will provide the basically the
street grid for the first
development parcels. We hope to
have that out to bid this year.
And we're actually seeing the
pricing on on these
infrastructure projects. It
seems to be coming down. So
we're seeing things that are
actually coming in within our
budget, which has not been the
case for the past few years. So
we're hopeful that we can get
the grand loop RFP out and get
get bids in in that cost
environment. And then that
would that would allow the
grand loop to start
construction next year. And so
you'd begin to see that work
ahead of development. And then
in terms of our work plan, you
know, we're still that's really
in flux right now. I think next
month you'll likely to get an
update on Main Street, the Main
Street work, which is going to
complete in the next few months,
and kind of what that means for,
for downtown, we, we had on
here potentially updating you
on some of the work that we've
been doing in addition to the
tax increment work on the
downtown redevelopment
assessment, there may not be a
lot to report there. And then
we we're going to be kicking
off a downtown wayfinding
project, which I think could be
of interest to you because it
really is more of a
comprehensive. Approach to how
do we get people downtown and
move people around downtown and,
and take advantage of like,
whether people are coming for
events or going to the
waterfront, how we help
businesses, businesses benefit
from all that activity. And
it's kind of outdated. Our
wayfinding. And then. Keesee,
our business plan is on hold.
There's some other things we're
dealing with on that side. So,
so a lot of the topics that
we've had on the agenda are
still kind of up in the air,
but I'll give you an update on
the agenda for the next few
months before next meeting. We
also probably need to get you
an interstate bridge project
update, since there was a
really public news yesterday or
two days ago, we really got our
first detailed update yesterday
internally. So I'm really not
like I don't have that much
more information than what
you've heard publicly. There
are impacts to what was planned.
So the basic news, if you
hadn't, is that because of the
the growing cost of it, they've
decided to, to more formally
phase the project and to really
focus in on replacing the
bridge as the near term project.
And that can bring the project
in under $6 billion, that phase.
And so and because the bridge
really is the most critical
piece, that would be phase one.
And so that means that the
footprint would really stop
just where the bridge lands
here on this side and, and stop
on Hayden Island on the on the
Oregon side. So, so I think
conceptually that makes sense.
The problem is there's a lot of
pieces to what we were
expecting to happen in downtown
Vancouver. And so some of those
we think are happening, some of
those looks like they're not
happening. And it was never
really designed to be kind of
broken up like that. And so we
have to come get back with the
PR team and start to find out,
okay, what you know, have you
really thought about the
implications of these things?
So, so we're learning that so I
can talk to our team and see if
we can get maybe an update for
you one of the next couple
meetings just so you can hear
the latest as well. It's, it's
the realities of, you know, I
think you saw in the, in the
press conference and the
announcement that the overall
project, I think is now at 12
to 14 billion. So it's not
something that is, that is
funded. And so the there has to
be some some other way forward
to, to at least get the bridge
replacement happening. So I
think that's, you know, we
agree with that. It's just the
impacts of downtown are unclear.
So with that, that's my update.
I'll turn it back to you.
President Fazio, unless anybody
has any questions.
>> Yeah. Thank you. Anyone any
questions for Patrick? Okay. So
with that we can move. Oh, do
we have any public testimony
that was either present or
signed up?
>> None received.
>> Okay. So we can move forward.
And the next item is the active
ground floor study. Right. Okay.
>> Yeah. Thank you. So this
active ground floor study was,
is one of our follow up
activities from the downtown
redevelopment study. This is
really looking at kind of how
we continue to kind of in the
context of looking at the
comprehensive plan and kind of
meeting all of the city's
growth goals from a housing and,
and jobs perspective, how do we
continue to keep downtown an
active environment, pedestrian
and. Street? How do we keep an
active streetscape without
having negative repercussions
on continued growth and
economic activity in downtown?
So if we could next two slides,
yeah, I guess. Yeah. So kind of
contextually, we understand
that a lot of cities, both
regionally and nationally, have
overprescribed retail
specifically to try to activate
streetscapes. We see this in
rather high vacancy rates and
ground floor retail spaces in
other cities. And just it isn't
it's no longer a market driven
environment. So I think we see
that as a potential pitfall of
just being overly reliant on
retail. We also understand that
consumer trends are shifting
away from kind of more brick
and mortar retail and in some
circumstances. So, and I think
it's still yet to see how that
fully evolves, but creating
opportunities for flexibility
in how we treat activation on
the ground floor and providing
kind of being less reliant on a
single monoculture. And then
also how do we promote more
living wage job opportunities
in these ground floor spaces as
retail has not been
historically a high wage sector?
So that's really the context
that we're looking at this,
this work in. Next slide please.
So to, to kind of answer those
questions and address how to,
how to move forward in, in that
context, we, we brought on by.
Who I think Matt will get into
a little bit description of, of
what they do, but to review the
current market conditions and
economic development goals that
the city has has put together,
identify regional and national
trends. Just understanding how
ground floor uses are being
used regionally and and kind of
nationwide best practices,
particularly in downtown
locations, and then identifying
actions that other cities have
used to both promote active
ground floor use, but also
looking at alternative ground
floor uses that may have not
been historically as present in
in these in these environments,
but may achieve some of the
other goals that the city is
looking to achieve. And then
kind of taking all that
research, all that analysis and
compiling it into some
recommended strategies and
actions that we can take to, to,
to increase activation and
living wage job opportunities.
And with that, I'll turn it
over to Matt.
>> All right.
>> Thank you, Tim. So as a
reminder, my name is Matt Faris.
I'm a VP with a firm called BAE
Urban Economics. We've worked
with the city for probably two
and a half, three years now on
sort of starting with the
downtown redevelopment study,
really understanding what the
capacity, sort of future
potential for downtown is. And
I think, as Kim Chun alluded to
this study about sort of
activating the ground floor,
thinking about the activation
strategies builds off of that
assessment that there is a lot
of capacity in downtown. We
sort of through the comp plan
that that the team is going
through, envision a lot of
growth in downtown. And so we
want to kind of think about how
that downtown development, how
we think about that, that
activation of the ground floor.
So we obviously very familiar
with downtown through that
whole work, sort of revamped
our understanding of downtown,
really thinking specifically
about the ground floor. So I'm
just going to start with a
couple of sort of heat maps of
what is going on in downtown
currently. So this first one is
about restaurants and retail
and just the density. Where are
these concentrations of
activities? A couple of other
notes that we learned,
obviously in our, in our
downtown redevelopment
assessment, in our market
analysis is that downtown
actually has a fairly healthy
vacancy rate. It's not that
high, but when you look at
where those places are, they're
really quite heavily
concentrated in Main Street,
sort of south of mill. And then
that uptown neighborhood again
north of Mill Lane, and you
have some activity, sort of
emerging clusters along the
waterfront, obviously, with the
new development. Next slide.
Then when we look at what else
is going on in downtown, when
we map where different office
users are, this is all office
users, not just ground floor,
but you start to see the sort
of ring around the, the retail
restaurant nodes downtown has a,
you know, the whole region has
a fairly high vacancy rate
availability rate. In the
office sector. You see a lot of
articles about that. Downtown
Vancouver is is has a high
availability rate, but it's
still below the region. And
then yeah, again, sort of where
you see it emerging in the
downtown is around those
clusters of retail and
restaurants. Next slide. What I
find makes downtown also very
unique is this sort of
industrial culture on our on
our, on the west side of
downtown, sort of the northwest.
And so we have a fairly limited
inventory, I guess on the whole,
right? A lot less share of the
regional or total industrial
inventory in the city or the
region. But it's still present
when you when you start to map
it. And when you go to that,
that west end of, of downtown,
it feels industrial. It feels
sort of heavy. And of course,
on the, on the outside of the
boundary is even more sort of
industrial on the other side of
the railroad tracks. So they're
concentrated in that sort of
neck of the woods of, of, of
downtown. And we also know that
industrial poses some
challenges in urban areas.
There are opportunities to kind
of co-locate. And that's sort
of what, what this study is, is
hoping to dig into is sort of
how can we balance these, these
mix of uses. Next slide. I want
to keep this well, one, one,
we'll talk multifamily first,
which is, you know, sort of
where the residential is
surrounding. Esther Short Park
on the waterfront, some dots
concentrations along the way.
And when we go to the next
slide, you see how much. And
this was sort of the the key
conclusion of the downtown
redevelopment assessment was on
the next slide, the, the
inventory of sites and
development capacity. So the
red sites are vacant, sort of
ready to, to, to, to redevelop
all the way up to yellow, which
sort of represents there's
something going on. It'll take
a little bit more of an effort
to, to turn over and you start
to see where these sort of
pockets of, of redevelopment
potential are, and you really
start to see an overlap between
quite a bit of capacity where
we have existing industrial and
the higher and better uses that
are building right next door
are multi-story, mixed use
developments, but with those
dense with those mixed use
developments come this sort of
need to kind of program and
think about the ground floor.
Let's see next, next slide.
That's sort of what's going on
in downtown and how we think
about sort of the future of
downtown. This is not a city or
this is a city with a lot of
capacity. I know you're sort of
hearing the story on the ground
today is not a lot of projects
in the pipeline, but you can
clearly tell from the last real
estate cycle and the next. This
is a this is an area poised for
growth. So then let's zoom back
out and say, what are we
learning sort of nationally
about urban areas, thinking
about activation, thinking
about those ground floors. As I
alluded to earlier, there is a
clear shift in demand for just
like pure traditional retail.
And that's historically been
what we've built on our ground
floors in our urban areas is
coffee shops, retail fairly
easy and relatively affordable
to build. But if you look at
areas that have overprescribed
retail, a lot of that stuff is
sitting vacant and they're
figuring out how to sort of
after the fact, redesign it for
residential, or maybe they're
taking on tenants after a year
or two that are not quite
paying as high rent as they
thought. So there's just these
sort of challenges. And so when
you look at cities that are
kind of at the forefront of
urban adaptation, they're
looking at flexibility and it's
it's thinking about what else
can go in that ground floor. It
retail and sort of restaurants
make sense in certain areas.
And that's sort of why we map
where they are today. A lot of
cities are focusing on those
areas. How can we strengthen
those known clusters without
spreading out retail and
restaurants? Sort of.
Throughout all of the new
development. Next slide. So
we'll zoom back into Vancouver.
And this is sort of where our
work fits in, right? The city
has done produced the downtown
design guidelines, which is
sort of guiding the
requirements of what the ground
floors need to look like. So
that's sort of the how do we
meet this? The comprehensive
plan is creating active ground
floor required overlays and
active ground floor ready. So
the city's already thinking
about not requiring ground
floor activation everywhere. So
that's sort of telling you the
where do I have to do this? And
so the outcomes of this study
is really the, well, who and
what kind of uses can fit in
these places. So we're looking,
we're really zooming out,
looking at target industries,
business types that fit into
this realm of sort of active
ground floor uses. But then
we're digging into if we see
these different targets, what
do they need? What are their
spaces look like? How big, what
utilities, what traffic PED
counts, what curve control? How
do they fit into downtown?
Because often we get these
ground floor spaces that from
the get go, don't have the
utility capacity to attract a
manufacturer or to do a certain
use. So we want to be setting
the city up with an
identification of what these
different uses need. And we're
going to zoom in both with
ourselves. And I should have
introduced our team. We're
working with first 40ft, who's
been deeply involved in the
conversation here in Vancouver.
They more the architect design
side. So what are some of the
architectural requirements that
these need? And are there
constraints that the city sort
of inadvertently has put up to
meeting some of these ideas
around new ground floor users?
What are those constraints look
like and other opportunities
for city support? And then
we're working with a local firm
called Bricks and Mortar that
really sort of half of their
time is working with businesses
and finding locations. And so
they're really in tune with
what kind of users are looking,
what users are looking for in
terms of spaces, and what
Vancouver being in the north
side of the Portland
metropolitan region and being
in Washington, what unique
attributes does Vancouver have
that can attract businesses to
open up here, and how does that
fit into downtown? And then the
last thing is just identifying,
you know, this isn't going to
be easy. And there may need to
be ways in which the city can
support through just programing
and all of that, all the way up
through financial incentives.
So we're going to work through
those policies as well. Next
slide. And one more. So we're
here to sort of talk about what
are we finding. And we did this
same sort of exercise, I feel
with the downtown redevelopment
assessment where we came to you
all sort of midway through
maybe 60, 75% done and said,
are we on the right track? And
I remember a very pivotal
meeting with you all where you
said, we want to find sites
that can be catalytic. And so
we're using that same approach
with you all. This is what
we're finding, but you all are
involved in your own
professions. You have ideas. So
we want to make sure that we're
not just coming to you with a
PDF and walking away, we're
really able to incorporate.
We're at a point where we can
incorporate feedback. So we
created this sort of graphic
that that helps wrap our mind
around what are we trying to do?
So as Chekhun alluded to, well,
start with the first one, which
is we you do look nationally
and people are strengthening
and focusing on their existing
nodes, which again, is why we
start with those heat maps. You
need to create a unique
identity. Downtown is a unique
identifier for, for, for
Vancouver. So how can we
strengthen and support those
nodes? How can we also look at
emerging industries regionally,
locally, that that might be
able to be accommodated in new
development and existing
development in downtown? And
then the last one, which is
really critical, is the city's
recently adopted their economic
development strategy. And with
downtown being a focus of
development and future growth
capacity, how can we also meet
our economic development goals
in, in, in our downtown? And
how do they align with our
active ground floor use
opportunities? Next slide. So
with that, I want to talk
quickly about we did a scan,
you know, a document review,
the city's economic development
goals, the Columbia River
Economic Development
Corporation's economic
development goals, the
Workforce Board of Southwest
Washington has goals and they
really start to come together.
I mean, I think a lot of those
were were building off of each
other. But from the city's
perspective, it's really
focusing on economic growth
that is equitable. So you think
about a key factor in that is
living wage jobs. How do we
have not just job growth, but
job growth that pays living
wages, which are sort of
defined by a certain income
amount and, and work sort of
parameters. In that analysis,
the city identified several key
industry clusters that we have
also identified in our sort of
revamp of the data. But just
listing a few, you know, these
aren't traditional uses in
downtown advanced manufacturing,
computer electronics, clean
technology, software, life
science, but those are
industries that the city, the
region sort of sees as, as a
vision for, for growth. And
then of course, there's this
goal to support
entrepreneurship and small
businesses, which obviously
have a role in downtown. Next
slide. So another kind of
quirky graphic, but but just
something that's really helped
us think about as we dig in and
we take this really data driven
approach and we're looking at
industries, we're looking at
cluster analyzes, we're looking
at sub industries. How do we
filter through all of that data?
I mean, we're getting down to
not to get nerdy, but sort of
three, four, five digit NAICs
codes. You're getting into
really these defined industry
clusters. And so we wanted to
kind of tag each cluster or
each industry as an opportunity
for downtown if it hit one of
four goals and you see these
filter down to just, yes, is
this going to be an opportunity
for downtown that's worth
exploring? How can we include
that in this sort of matrix
that the city can use moving
forward? So one is, is this an
industry with historic job
growth, and how does that fit
into downtown two? Is it an
industry with projected job
growth? Right. Is there a shift
in, you know, a focus in a new
industry in this region? Three
is downtown in sort of the
again, a little bit of an
economic nerdy comment, but a
shift share analysis. Does it
show that downtown is a unique
location for this job industry?
And how does it fit into the
future of downtown? And then a
new layer about, again,
thinking about jobs in downtown
is, is it an industry with high
wages? And are there ways where
we can parse through that data
and identify those as
opportunities for downtown?
Next slide. So there is this
sort of massive matrix that is
being built that we're opining
on from an industry perspective
that the architects are opining
on, but we wanted to like zoom
out and we'll go through kind
of what that looks like in a
second, but just some of the
initial active use industry
targets. We can't walk away
from retail and restaurants and
we know that, but how can we
kind of focus on where those
are located, create those kind
of clusters of activity? We
also see a lot of emergence in
that kind of experiential
activities arts, entertainment,
recreation. You have a climbing
gym in downtown. That example
is of a, of a sort of
interactive art exhibit in the
region. Offices can play a role
in ground floor if they're the
right office tenant. And then
some of these other sort of
emerging ideas that are coming
across the country really is.
Is there a role for heavy
office light industrial? In our
downtowns, you see a lot of
emerging dense areas focusing
on beverage manufacturing, food
manufacturing that have a
little bit of a, of a retail
component, and then you go all
the way up to R&D and advanced
manufacturing. And how can
those play a role in, in
downtown? And what are the
needs of those uses? The last
segment we're kind of calling
civic and specialty uses. It's
a little bit of a catchall, but
as downtown grows, we have an
aging population. Is there a
role for healthcare? We just, I
think recently lost a
healthcare provider in downtown
who closed shop. So now there's
this gap in downtown healthcare.
And if we're going to increase
the amount of people who live
down here, having some sort of
healthcare would be important.
The second photo there is, is
daycare and childcare. And if
we're going to accommodate jobs
and growth in this region, how
can it be multicultural,
multigenerational, and how do
those sort of uses play a role?
The last one is civic uses. So
the city plays a role here.
We're seeing a lot of cities
across the country think about
libraries in the ground floor,
which we don't need here
because we have a great
downtown library, but civic
centers, you know, multi-use
rec centers. Is there a city
led effort where we see a need
for a park, or we see a need
for a community center, and we
can approach a future developer
and say, how about we sort of
P3 public private partnership
and we think about our use in
the ground floor. So we're
outlining sort of creating this
matrix of all of these
different ideas. Next slide
just to go through, I know I've
mentioned this idea of a matrix,
but this is just a snapshot of
kind of how this big matrix is
going to be produced. So first
we want to talk about the
industry background. How can we
make the argument, why did this
even make it into this idea. So
has there been employment
growth. What are the typical
educational attainment
requirements and wages. So how
does that help us meet economic
development goals. And then are
there examples. And then to
well also in here will be NAICs
codes. And how can the city use
their own business license data
to figure out. Are there more
examples of these businesses
here that we might be able to
foster relationships with? So
just given a sense in this case,
we're zooming into that that
manufacturing, because I think
that's kind of a unique idea.
The second section of that is
going to be space needs. What
kind of size ranges, locational
preferences, curb maintenance,
utilities, power ventilation,
and how does it align with
these, these city overlays that
we know are coming? So there's
some examples of sort of what
those different users need so
that when spaces come available
or new development
opportunities come up, the city
kind of has an idea of how
these fit in. And then the last
is what can the city do to
support these and how can the
city support these? So is it
just finding space? Is it
infrastructure? Is it tenant
improvements? And how is what
is sort of the general level of
city support? Next slide. So I
spoke a little bit to this. And
we've been working with with
Kim Chun and the whole team on
how does this matrix correspond
to city action. So in my mind,
you know, the city can use this
to development to, to develop
programs on activating any
vacant spaces as they come up,
they'll have this little
toolkit toolbox of, oh, this is
a 5000 square foot space in
this neighborhood on a corner.
Let's go to our matrix and see
maybe these three different
business ideas fit into it.
Does this space have the
utilities to do this kind of
use as we, as, as our
development pipeline hopefully
ramps up in our next cycle,
there may be opportunities to
identify potential uses in new
development projects as they
come through the pipeline. I've
already mentioned public
private partnerships. The city
owns land in downtown is is
sort of actively pursuing some
of these developments
themselves. So how can they
integrate these ideas into
future development? And how can
this increase jobs, amenities
and help kind of tell the story
and build a multi-use area
downtown from the matrix
perspective, what the city can
do with it and sort of
near-term actions is conducting
outreach to regional businesses,
identify opportunities for
bringing businesses to downtown,
identifying any infrastructure
improvement needs, coordinating
with prospective developers,
using their own land,
identifying public investments.
And lastly, I think probably
most importantly, is
identifying partnership
opportunities. None of this a
lot of these sort of big moves
happen under partnerships with
Cdfis, CDC, healthcare
providers, childcare providers,
and even looking internal to
our own city needs. Next slide.
So we're here to kind of
present some very initial
findings. I guess we've already
kind of gone through the
industries, and that's sort of
what we're seeking some
feedback on. But the, the, the
clear answer regionally,
nationally about ground floors,
there's no clear answer.
There's no silver bullet. If we
change this zoning or we, we,
we go manufacturing like, there
you go. We've solved it all. It
requires multiple approaches.
You need to look at your local
strengths, which is why we're
really zooming into industry
cluster analysis locally. What
does Vancouver bring to the
table in terms of regional
strengths? There is a need to
strengthen and focus our
existing nodes. So how can our
growth in downtown support our
existing businesses and
restaurants? Allowing ground
floor residential? So that's
something that that first 40ft
in our architects are working
on kind of a best practices for,
for ground floor residential
outside of those key commercial
nodes. And then also
considering this, this
flexibility on ground floor
uses, especially as they align
with our industry matrix. Next
slide. So I'll talk next steps
and then turn it over to Kim
Chun to sort of tee up some
questions. But our next steps
sort of here seeking feedback
on refining those targets,
space needs, how they fit into
downtown. We're incorporating a
lot of the architect feedback
on how these uses align with
existing overlays. Is there an
ability? We're also giving the
city some guidance on these
comp plan goals and targets
about ground floor ready. And
then certainly digging into
these constraints, you know,
are there things that the city
can do to alleviate constraints
to reach some of these goals?
And then lastly, refining the,
you know, ideas and
possibilities for the city to
invest and support these
opportunities. So next slide,
and I'll turn it over to Kim
Chun to tee us up with feedback
questions.
>> Thank you. Matt. So we have
a few kind of prompt questions
here, but obviously feel free
to to expand beyond that. But I
think what challenges exist to
accommodate a broad range of
ground floor users in downtown
Vancouver? In your experience,
are there other barriers to
property owners and developers
accommodating nontraditional
ground floor uses beyond retail,
such as small scale
manufacturing or childcare, or
other other uses or medical,
for that matter? And then are
there opportunities, strategies
for the city to better support
existing or future ground floor
tenants? And are there other
considerations that we should
be incorporating into the
analysis that weren't captured
or mentioned as part of this
presentation?
>> Any questions or comments?
You want to go?
>> I'll throw a comment out. So
this is fantastic what you guys
are doing. You're you're
looking for opportunities. One
thing I haven't heard is
promotion and advertising
because you've got a great set
of circumstances to present to
potential customers, but you've
got to get the word out. So,
you know, that's one of the
principles of marketing is
promotion. And, you know,
workforce, available space. I
mean, all the stuff you're
analyzing and this data can be
made publicly available. And,
and that's where it has to
connect with the, the possible
users. So I think promotion
should be added or included
into, into the thought process.
Maybe a little later, once the
groundwork is really gelled and
presentable.
>> Yeah. And I think part of
our thinking was once we have
some findings and
recommendations was to really
coordinate with C r e d, C to
to really help with that aspect
of it. So I think partnerships
with local organizations is
absolutely something that we
will rely heavily on from, from
an implementation standpoint.
>> And I'd say more than just
locally, I mean, you want to
grab people from everywhere
that that, you know, this is a
great place to live. You know,
the lifestyle that we have here
along with, you know, again,
all the, all the creative
aspects of our society and, you
know, the food choice. There's,
you know, people come here to
visit, get them here to stay,
you know, that's the thing.
>> We talked about this.
>> A traditional rent. And I
know it's a, it's probably a
task that shouldn't live at the
city just from a funding
standpoint and so forth. But it
would be great to figure out
how we can kind of support an
organization or somebody who
could participate, whether it's
OER, ETC, or someone else, to
connect tenants who are kind of
pop up or smaller, maybe lower
revenue businesses to occupy
and activate some vacant
storefronts. Because brokers
aren't going to bring them
because they usually make money
off of the rent that the tenant
is paying. So if a tenant is
not paying much rent, there's
not a lot of incentive to
matchmake in that way.
>> One of the questions I had
is part of this analysis is the
sales tax factor being
considered in terms of the type
of retail tenants? Yeah, yeah.
>> The the sales tax factor and
the opposite, which is the sort
of lower business taxes. There
are certain income taxes. There
are certain elements of the
unique Vancouver sitting in the,
you know, in a different state
that can attract. And we've had
some conversations with folks
who are Kyann. Yeah, the bricks
need mortar is in
communications with businesses
who are growing and sort of
knows like what kind of
business would want to be in
Vancouver. And so this idea of
certain retail types with the
sales tax may prefer to be just
south of the river. Small scale
manufacturing that has that
where, where Washington
actually allows more of that
smaller business incubation,
lower taxes is more attractive.
And so we're going to be doing
some of that analysis and
factoring that into, especially
as we think about some of those
nontraditional retail uses.
>> Aligning with the
manufacturing. I think what is
really compelling and what I've
been hearing, and Matt, we
touched on this emerging out of
the Bay area is AI and robotics
and the need for R&D, which I
think would go really well in
that West Side industrial. And
I would recommend there's
discussions with Enlight what's
going on within the defense.
Washington's uniquely
positioned in that you have a
military presence, and so you
have people at the state with
that acumen and understanding.
Oregon does not. So I think
there could be some real
emerging opportunities within
that realm. I think Columbus,
Ohio, is a great example of the
defense industry going there
with Anduril and it's booming.
So I would recommend looking at
that opportunity.
>> I'm a little. When you talk
about manufacturing, I think of
Lucky Lager, Boise Cascade, you
know, the things that have been
replaced. So and then when I
think of manufacturing, I think,
okay, you're going to have a
lot of truck traffic moving in
and truck traffic going out.
And the same reason why we
don't put like a, a chick fil A
with a drive through in
downtown, you know, do we want
all this activity or is this
are we talking about more like
a jeweler where it's very
inconspicuous?
>> Yeah, these are smaller. I
mean, ten, 15,000ft², very high
tech, low intensity type. This
isn't your traditional big
scale manufacturing. So I think
we're entering into a whole new
realm. So I think Vancouver is
uniquely positioned with that
industrial element to the west
side, which could be poised
really well aligning with
downtown. Yeah, no it's not.
But Mill Plain has a lot of
capacity. Even if you wanted to
go there for Truckey. But.
>> Yes, part of me too is, is
you kind of looked at downtown
Portland and, you know, they
used to have the Morrison
Street retail corridor and it
was full Abercrombie, Macy's
and everybody there and it's
all went away. So where did
they all go and how come they
didn't come to Vancouver or,
you know, especially with
Vancouver being that the
population growth and all the
activity that we have or is
there something.
>> I'm happy to take a crack at
it. I don't know that corridor
as well. But you mentioned some
of the companies that were
there. The large scale
retailers are worried about
sales tax. And, you know, they
might have gone to 21st or 23rd.
You know, they were still kind
of this shift to, oh, well,
Arc'teryx and Patagonia are
over there. I'm going to kind
of go co-locate with them. So I
think but I also do think that
you're starting to see downtown
Vancouver popping up on that
radar as sort of the next jump
for Portland region companies.
You're seeing Allegiant just
opened. You saw Breakside
Brewing come, you know, you
have these sort of regional
companies that are looking at
Vancouver, but I think those
large scale retailers are
worried about that sales tax.
But that's my just solely based
on the on the companies that
you've listed.
>> Yeah. I think another
challenge with retail is that
the online market is really
starting to take a big chunk
out of the brick and mortar
shopping activity. So I think
with the combination of the
sales tax being and us being
right on the border, and then
all this online retail, it does
make some of those larger
vendors. It makes it difficult
for those larger vendors to be
attracted to, to Vancouver.
>> Yeah, I would echo that. I
was I just dropped in on Lloyd
Center a couple of weeks ago.
And I don't know if you guys
have been there, but I, you
know, you've been hearing about
some redevelopment that's being
planned. I just wanted to go. I
grew up around it. It was the
biggest and the only shopping
center. You know, it was the
biggest in the country, I think
in the early 60s. But when it
was built and it's just a ghost
town, it's it's like, you know,
Armageddon there. It's the
major retailers are going away
and Washington Square is losing
them. Town centers losing them.
These big shopping centers are
are the online retailing is
just crushing it, I think.
>> I'd just like to say too,
that was already earlier. I
think she brought it up. But
working with the landlords too,
because I do think if a
landlord has an office building,
he wants to have a cafe for his
tenants to eat or a coffee shop
or, or, or daycare center or
something like that. And, and a
lot of times I know we've done
in the past, we give it away
for free just to in a sense, so
you can make your money on the
office side or on a different
spot. But I think hopefully you
can get a lot of help from
landlords to do that.
>> Yeah, I think just to
respond to that, I think the
goal of this is to create sort
of, you know, these win win win
opportunities. Like how can it
be beneficial for the developer?
The city gets, you know, clear
vision for the city promotes
this clear vision of we sort of
want to have our hands in
dictating and shepherding who
comes into the ground floor.
And to your point, if, if if
it's a use that makes the
office above more beneficial
and now provides daycare and
this, you know, how how can we
understand what those win win
opportunities are? I just
that's, I think the, the goal
of this and sort of commend the
city for trying to get ahead of
the next cycle and have that
information at their disposal.
Like this site fits this goal.
And this is what we want to see
here. And I think development
community is is excited by that.
>> Yeah. And I think also one
of the especially for smaller
projects, they are smaller
landlords. They may not be able
to kind of forgive or give away
that much rent. So for,
particularly for ground floor
uses that the city deems as
having a lot of public benefit,
are there opportunities where
the city can provide some sort
of assistance, whether it's
technical, financial or kind of
reduced costs to, to help
promote and, and make it easier
for the landlord to locate
those uses. Yeah.
>> I would also add, you know,
the, the new codes that are
that the city is working on are
really going to help because,
you know, you hear it from all
of us. Flexibility is key to
everything, right in the
business. And to have the codes
being updated to accommodate
all these different uses in
more areas than maybe
traditional zoning would allow,
I think that's going to be a
real benefit. And you want to
promote that as well.
>> One other comment thinking
layering on the many studies,
are the catalyst sites
integrated with this, so you
guys can bring that in. I just
didn't see that.
>> Yeah, it's it's not we don't
have a map showing that
currently, but I think how
we're thinking, if you look at
the different kind of heat maps
of where, where things are, the
catalytic sites are kind of in
the gaps of the heat maps. So
it's, it gives us that kind of
opportunity to look at those
and relative to where, what
things, where things are now
and say, okay. And I think
that's kind of one of the next
steps is saying based off of
where everything else is, what
makes sense here and how do we
think about those catalytic
sites more strategically in the
context of current conditions
and current uses?
>> That's great. And I would
just add, I saw it in there. So
I know you're thinking about it,
but just reiterating the
importance of public
infrastructure, I think
sometimes we forget how
critical that is and you're the
only ones who can do it. So I
would just emphasize that.
>> Oh yeah, that was additional
because I think the as you can
see, the table has a lot of
information that we didn't
really want to put on a slide
because it was it wouldn't be
readable. So yeah.
>> All right. Any more
questions or.
>> So I just want to just to
wrap up, I don't is this is
there a timeline for the final
for like, like when will we
have something that we can say,
this is the final study?
>> Yeah.
>> We're.
>> You know, we wanted to get
to this point and allow some
opportunity even do things like
like look at Columbus, Ohio and
things like that. So this is
perfect. I think we're at a two,
three months, we'll be done.
Probably come back. So quick,
quick turnaround and, and also
providing some feedback on the
other plans that are, that are
coming out. So making sure this
is integrated into the next
wave of, of sort of city
documents a couple of months.
>> Yeah. So this becomes, as
everyone's saying, a kind of a
practical filter for us when we
think about both strategic
sites and other developments,
both where we want to reinforce
what's going on, but also not
every new multifamily project
needs to have ground floor
retail. Like that's the flip
side of this is it doesn't
serve anybody. And if we can
put housing there, then we pick
it up and we can we can really
focus our efforts. So maybe,
you know, we were like
waterfront gateway heavy on
ground. Like this gives us a
little bit more, a more
information to think about that
the city has retail spaces that
we control downtown. What do we
do with those? This helps us
think through, you know, not
every retail space needs to be
retained as retail, right. And
then then the ones we do, we
can really pour kind of our
attention and potentially
resources into that. So.
>> Okay. We good? Well thank
you.
>> Thank you.
>> And you're going to stay
though, right? Okay. Should we.
Yeah. So we should go to the.
Development activity report.
Right. Okay.
>> Kick this off and we're
going to do a little team
effort here between me and Chad
and Tim Choon. So we're trying
to make this a regular. Well it
will be a regular occurrence.
It's I think we've been doing
this now for the past couple of
years and refining it. And so
we're going to give you kind of
the this is all 20 like looking
at 25 data. We actually already
have some early 26 data, but we
don't want to confuse the
conversation. So we're kind of
reporting out on what's
happened in 25 where we stand
in terms of the development
pipeline. Dig into some more of
that, some of the housing side
of it. Why don't you go to the
agenda there and then and then
and then talk about, you know,
obviously the market conditions
side of it and what some of the
policy implications are and
then have a conversation about
it. As we've done in the past.
I just want to highlight like
you are both audience for this.
And we want feedback because
this is this same presentation
will be going to City Council
the first Monday in April. And
we, you know, so we are trying
to keep city council really
close to this data because we
do think it then informs a lot
of other policy discussions.
And and then Chad and I are
also presenting to the city's
leadership team. So all of Chad
and all of our peers, we meet a
couple times a month. And so
that's next week, once again,
trying to keep this information
front and center. So when we
people think about and we'll
get into some of these issues,
like we have, the
transportation folks are
looking at raising impact fees.
That's a housing conversation,
right? So they're very
receptive to this conversation.
I'm not trying to like throw
them under the bus. I'm just
saying example is they're
looking at what their impact
fees should be. We we're
successfully getting everybody
around the table to say, let's
look at what it means from a
development perspective, but we
have to keep doing that every
year. And so so that's the
overall purpose of this
presentation. And like I said,
I really want you to to both.
Yeah, your reaction to the
information is great, but also
feedback on how we might
continue to push this message
out. So with that, I think I'll
turn it over to Chad. And
Chad's going to walk you
through the, the permit, the
permit information.
>> And most of this is focused.
>> Okay. Thank you. Hi, Chad
Aitken, Director of Community
Development. And most of this
will focus on residential. But
this first slide. Well, let me
back up before I even get into
the slide. Looking at our
overall development activity
for this for 2025, if you
compare it to previous years, I
was explaining this to a couple
of folks before the meeting.
The numbers actually don't look
that bad, but if you dig a
little bit deeper, it becomes
apparent that even though the
numbers of permits and
applications are just a little
bit below what we've had in
previous years, the projects
are much smaller, the
valuations are much lower, the
residential units are much
lower. So there's a you kind of
have to dig a little bit below
the, the, just the, just the
strict number of permits and
applications. This first slide
shows valuation of commercial
and industrial permits. We we
use valuation to calculate the
building permit fees. And it's
really a, a it can be thought
of as a surrogate for a large.
How large a project, how large
our projects are, how complex
they are. As you can see, the.
That number has shrunk
dramatically in 2025. About $60
million of commercial and
industrial projects combined.
Our total valuation last year
was 483 million. So it's a
really small percentage of our
overall permitting permit
valuations. We had. And so 483
million in total valuations.
That's a 22% decline over 2024.
So we're we're we're in a
trough for sure. There are some
signs that we might be climbing
out of it, but it may be too
soon to to know if it's a trend
yet. So a lot of uncertainty
out there.
>> For this information. Quick
question. Is this specific to
the city of Vancouver?
>> Yes. Strictly city of
Vancouver. Thanks. Good
question.
>> Yeah. And this is based off
our actual permitting data set
for for permits that we've
issued.
>> Thank you.
>> 2020 waterfront.
>> That I believe was we had
two school bond measures that
were approved. About $1 billion
of school renovations and new
schools. I mean, that's not
showing up at a billion, but I
believe that's where that is,
is coming from. Moving into.
>> I think 22 and 23 would be
would be the Zoominfo building
on the commercial side. Yeah,
the bulk of that.
>> Exactly.
>> Right. And then I think the
industrial was a lot of
distribution center activity.
HP and HP.
>> Yeah. Then then the market
got saturated pretty quickly
with warehouses and
distribution centers that were
being permitted. So that number
fell off. Okay. Next slide.
This is the residential
building permits that were
issued. You can see we're
trending in the wrong direction.
The production goal is about
2500 to meet our population
targets by 2045. We are, as
this shows, 51% below the six
year historic average for
number of units. Some of this
was due to the very low number
of land use applications for
residential projects that were
submitted in 2024, so that that
trough in 2024 will sort of
march forward. And for at least
a couple of years until we see
those numbers improve. Couple
of things I wanted to mention
here that the, as I mentioned,
their units number of units
received in 2025 was somewhat
better than 2024. And those are
still making their way. Some of
those are making their way
through the permitting process.
We had 760 compared to. Let's
see, 214 units were were
proposed in 2024. Just to give
a little bit of context, this
might be a way to picture the.
On a citywide basis, the number
of units that we. We need to
hit 2500. It would be about
more than one waterfront being
built every year throughout the
city. So we've got about 16,
1700 units down there now. So
we need to do better than than
a waterfront each year. Also.
Wasn't sure where to make this
comment, so I'll just I'll just
say it here. Pre-Application
conferences is also something
that we, we look at as an
indicator of future large
projects. Those. Drop to 80
last year, which is a new low
post pandemic. So that's not
good news for the development
pipeline going forward. So
we're just a couple of
troubling signs there. Next
slide. The MFTE. This is pretty
self-explanatory. The MFTE
pipeline has dried up, issued
one MFTE approval last year.
And I think maybe Kim Chung
wants to weigh in on this. But
I think the takeaway from this
slide is that the MFTE program,
which has in the past been
effective at closing the gap on
financing, is no longer enough
to move projects forward.
>> Yeah, I think it like Chad
said it, it's just not as
effective in this market
because of how much of a gap
there is in feasibility. We did
make some changes to the
program in 2023. So I think
that's part of why we saw a big
influx in 2023 of applications.
But as you can see in the
bullet points, not all of those
projects actually came to
fruition. So it was more of
kind of hope that things would
get better and they have not.
>> So I wonder part of it was,
remember, it was a straight
MFTE you did the project, you
got the property tax exemption,
but then we did public benefit
and then we changed it to
contributing to a low
affordable housing fund. So, so
when we say it's, did we make
it more complicated to get the
MFTE or is it because.
>> Well, I mean, I certainly, I
certainly think there's an
argument to be made that the
changes probably weren't timed
well, but I still assume you
mentioned that that point still
overrides all of it. Even if we
had left the program unchanged,
people still would still see
this. We just wouldn't have
seen that spike in applications.
If you recall, last year we
brought through another set of
temporary changes to MFT that
that delayed the fee in lieu
payments for for six years. So
so we we still don't know the
impact of that, but we tried to
take the burden off of off of
the, the fee in lieu, off of
the market rate projects. We're
not, we weren't statutorily
allowed to, to give them a
longer term exemption. And the
affordability, you know, the 12
year exemption still holds. And,
you know, we liberalize that in
23, meaning you got a longer
term exemption for less
affordability. So, you know,
the changes weren't all like
meant to make it raise the bar.
But just the market conditions
are still the primary driver
here.
>> Yeah. And I know we're
focused on 2025, but I think
some interesting information in
early 2026 is we're seeing a
lot of or several, maybe not a
lot projects that are rolling
off the market rate. MFTE
actually reapplying for
affordable MFTE for 12 years.
So I think market rates are
close enough to the
affordability level at 80% that
it it's becoming attractive for,
for existing product.
>> Okay.
>> Next slide. This shows the,
the residential units that are
under construction. So this is
sort of a rolling quarterly
number. The same project will
show up in a number of these
quarters for like 12 or 18
months. You can see there's a
trough there in fourth quarter
of 2004. Slightly climbing out
of that. But all that white
space that you see below the,
the gray, the top line is
future deficit that in our
number of housing units and
housing production that will
continue to plague us in the
future. So really, if we if we
were hitting that 2500 mark,
every quarter should be at
least at 2500.
>> So looking at that goal,
just for my own knowledge, how
do we set the goal of 2500? Is
that based on population or.
>> It's based on the state's
population projections for
Vancouver? Yeah. Great question.
>> And I will say the I think
if you do the math from our
goal over the next 20 years in
the comp plan, and today it's
actually around 1800. But the.
We understand that we currently
have a deficit of housing. So
that 2500 is to help catch us
up to our deficit or from our
deficit. And the the annual
need. And then it levels off to
a lower amount. But yeah, so
that's why we're at 2500 and
not 1800.
>> Just out of curiosity, could
you overlay population growth
on top of this to see if
there's any correlation?
>> It could be interesting.
Yeah, I don't know. I don't
know if we have quarterly
population data.
>> Yeah. I mean that would be
tough.
>> Yeah.
>> But.
>> Are you taking the next one.
Yeah. Okay. Okay. I remember it
is.
>> Well, I guess maybe I'm
opening a can of worms with
this. So does that deficit
cause people to relocate out of
Vancouver city limits then
based on housing not being
available?
>> I think it's so I think this
this might talk to it a little
bit as well. So so this is
vacancy rates in Vancouver for
multi-family housing. So I
think to the extent that the
price point, the vacancy drives
a price point that compared to
other regions is more expensive.
I think you you would see
people leaving. I don't know if
we've seen that happen yet,
because the price point between
other areas around Vancouver
and Vancouver itself is not
different enough to warrant
that additional travel. I'm
sure some people have. I just
yeah, we don't have as, as much.
>> But it's also just I mean,
there's been a lot of studies
on this. It just pushes
everybody down in the housing
market. So a lot of studies
have been done on like, what's
the cause of homelessness, the
cause of homelessness. You can
there's all sorts of ancillary
factors, but the main cause of
homelessness, homelessness is
lack of housing supply. So when
you under-produce housing, it
just is cascading impact down.
And so people who should be in
like buying a home are stuck in
rentals or they should be in
bigger rentals or in smaller
rentals. And that pushes
everybody down, pushes prices
up. And the folks at the bottom
of the rental market are the
ones who get pushed out into
unsheltered. So, so you have
that. And obviously you can see
it in all the different data,
so vacancies and whatnot.
>> But thank you that that
helps to understand the gap.
>> Yeah, yeah.
>> And for our comprehensive
plan, they're targeting a 7%
vacancy rate for our housing
supply as considered as it's
what they've identified as what
would be a healthy market for
from a renter's perspective and
a resident's perspective. I
think oftentimes for
development that that's flipped
where a lower vacancy is better.
And when you get to 7% vacancy,
that's a little nerve wracking
to make an investment in that
kind of market. So here, I've
kind of shown from a, from a
renter's perspective, the green,
yellow red of what's healthy,
kind of more dynamic from a
price standpoint and very
difficult to decrease or a
highly dynamic pricing
environment in terms of vacancy.
But this, this graph shows kind
of historically where vacancy,
both stabilized vacancy and
overall vacancy has been in
Vancouver. In the multifamily,
you see it dip quite low in
2021. I think as you see
pandemic migration away from
urban centers, probably
Portland and Seattle. And then
a larger spike, particularly in
overall in overall vacancy,
which includes kind of new
products from deliveries in the
waterfront. And it's today,
it's kind of they're leveling
out, stabilizing around 5%
vacancy. So if you go to the
next slide, so this is when we
look at rent growth, which is
often related to vacancy rates.
So this this is rent growth
adjusted for inflation. So it's
it is a little bit different
from from a different
perspective, but I think it
really points to one of the
core reasons why we are seeing
a slowdown in particularly
housing development activity,
because we are seeing pretty
consistent negative rent growth
over the last few years and
forecasted continuation of that
negative rent growth. This rent
growth also does not consider
concessions, which are
additional. Offerings to help
attract new tenants to to
resident to, to lease. So
likely the effective rent is
lower than this. But and this
is I mean, if we're hovering at
kind of 1 to 1 and a half to 2%,
that's still. Or decrease that.
I think other inflationary
factors are still putting
pressure on residents that they
aren't necessarily feeling this
decrease. But I think from an
investor standpoint, attracting
new development, attracting new
projects, this is this is a
bleak outlook for for the next
few years. I think part of that
context is also looking at
whether part of or I think part
of the conversation is kind of
the question of whether this
negative rent growth is
partially driven by what people
can afford locally. And I think
we see here that construction
appears to be outpacing, or the
cost of construction really
appears to be outpacing wage
growth. This isn't a perfect
comparison. The building cost
index that we have access to
are focused on commercial
development. So, you know,
still there's more steel and
concrete in those. Residential
tends to be more driven by wood
market wood and labor markets.
But I think at a high level
there are similar trends. And
and we're just seeing
construction cost creep higher
and higher. And, and wages are
just not keeping up at the same
rate. Yeah.
>> I would consider I imagine
Seattle's a lot higher. So it
might be for council to see
that other regions are the
income growth is exceeding
construct might be helpful.
>> Yeah. So I think that's why
I included the national percent
change. And this is percent
change. So I find it pretty
interesting that Seattle and
Portland percent change were
very consistent. Even though
Seattle is a lot higher, like a
lot higher density, probably a
lot higher per square foot
costs. But the percent change
from 2010 is pretty close.
Obviously, both of those cities
are above National, which is in
yellow Seattle. I'm sorry. Yes.
So yeah, Portland's in blue.
Seattle's in I guess orange.
And then National is in yellow.
>> So nothing, you know. But I
was kind of curious what
happened to Portland. Seattle
around the time.
>> Mark. Yeah.
>> Mark, could you turn on your
mic? Thank you.
>> I'm not sure if you would
know this, but if you starting
in 2020, Portland and Seattle
diverted so much from the
national cost. I wonder what,
what what happened.
>> Yeah. I mean, I think
there's a lot of potential
reasons. I think sometimes like
national trends can vary a lot
from coast trends in terms of
price of materials or things
like that. But I believe that
is also when we saw some of the
more recent building code be
adopted in both Oregon and
Washington. So I'm sure there's
several other factors, but that
would be my best guess at this.
Without diving into it too.
>> Deeply, I think you're on
the right track. There is.
There's lots of things that
affect the cost of construction.
It's the cost of materials.
It's the cost of the Washington
Energy Code, labor rates, and
how busy people are. You know,
if they're busy, they're going
to they're going to put more
markups. Markups in
construction are really, really
small. So it's not, you know,
you say costs are going down
because people are getting
hungry. Well, there's some
other factors than that because
the fees on construction are so
small. But you know, there's
also competition for the
materials in the market. I
think I've mentioned before
that, you know, we were putting
up the company I used to work
for was putting up industrial
buildings, a lot of flat roof
buildings, and all the trusses
and plywood and roofing
materials were being gobbled up
by large, large projects during
that time. And we saw roof
structures and roofing and roof
insulation materials go up, you
know, 100% in a couple of years.
You know, it just it was crazy
what was going on. And they
don't seem to go down either,
you know, so, so construction
costs is not just one thing.
It's such an integral, you know,
there's such an extensive web
of things that affect the
construction cost.
>> Yeah. And I think on that
note, we're starting to see
aluminum and copper prices
really skyrocket because of
partially due to the drastic
increase in data center
construction and the high
demand for those materials that
those developments are, are
costing in this region.
>> So and like I said, the
energy code is forcing
apartment buildings to use a
totally different type of Hvac
system. So you're going to be
spending, you know, twice what
you used to be spending on
heating and cooling your
apartment buildings. So that's
going to be something that's
just mandated under the
industry.
>> Okay, we're going to switch
now to the affordable housing
side. And before I do that, I
just want to highlight. So we
included in your in the packet
of materials for this meeting
that this is one of the annual
reports that we've been doing.
So this is really it overlaps.
Obviously there's some market
information, but this really is
a report out to to our city
council and to the public on
the, the, the whole collection
of activities that we engage in
around affordable housing. So,
so this is a more detailed
summary of that activity that's
will also be shared with
council and everybody. So, you
know, our affordable housing
production is, is kind of stuck
in this kind of 250 to 300
range. And it's largely because
of the all of our projects
require multiple sources of
subsidy. And we have
dramatically increased our
resources, particularly through
our affordable housing fund,
the levy that we have. But but
other funds we've we've put,
you know, we're putting
together, you know, we adopted
this construction sales tax
exemption. So we have a lot of
different tools, but these
projects still need to go
through, get state funding,
particularly the ones that have
the deepest affordability. And
I think so. So the next slide
has this. But I just want to
say that number there will be
stuck because of the state
bottleneck. So I can't push
more units through the system
is basically the issue that we
have. We know we have the
capacity because we have a
whole pipeline of affordable
housing projects with qualified,
affordable housing developers.
We have committed the funding
that we need from the local
side to to at least double that
production. And there's just no
money at the state level. Next
slide. So this is the state
issue. And we've been this is a
new slide this year because
this really is the single issue
on the affordable housing
production side is is that the
state of Washington has
tremendous need and, and for,
for affordable housing. And it
and it has, you know, decent
programs, but its main source
of subsidy, both the, the 9%
low income housing tax credits.
And then there's something
called the housing trust fund,
which is basically the state's
kind of grant program. It, it,
you know, probably meets about
one tenth of the need for for
the state. And then on top of
that, we get there's only a few
counties across the country,
across the state that really
are that that get underfunded
at our level. So we get about
half of what we probably should
get from a, from a population
standpoint. So there's some
there's some inequities baked
into the system in terms of how
this money gets allocated. It's
allocated, the legislature sets
the formula, and then then the
Department of Commerce
allocates it. So so we've been
trying to advocate, but it
looks like next legislative
session next year, we will take
a crack at a number of folks
around the state to see if we
can redo the formula. So this
year we got one project funded.
Last year we got no projects
year before one. So. So our
average is to say one. If we
change the formula we might get
two. We had six that applied.
We could probably do 3 to 4 a
year on our end. So this is
still not going to be the
answer. But right now it's it's
one of the things that is
that's holding us back. Next
slide. So. The before we get
into kind of some of the other
actions we're doing, just want
to kind of kind of pause and
talk about what are the
implications of the data that
that has been shared on the
previous slide. So obviously,
we've been highlighting this
with the that line going across
the top of all the bar graphs.
The housing deficit is going to
continue to grow as long as you
have the white space in there,
it's going to continue to grow
even, you know, even with if
you have like, you see vacancy
went up, that's those are kind
of temporary lapses when new
units get absorbed into the
market that we, we know from
the population trends in our
production that that deficit is
going to grow. And we're just
going to continue to see it
popping up in different parts
of the housing market. The, the
leveling off of, of increases
in price. Like at the beginning
I mentioned, you know, we, we,
we, we are getting bids on
infrastructure for the heights
that, that look like prices
coming down. There's still this
unpredictability to, to, to the
cost side of the construction
market that's going to continue
to plague us. Right? We just
talked about, you know, data
centers sucking up important
commodities. You're still oil
shocks, right? All of a sudden
we, we have proposers ask us if
they could have a contingency
for for the cost of oil in
their proposals. So things like
that will continue to shock the
system. So even if costs come
down, we still have that when
we talk to developers and what
we see and what Chad sees in
the permit data, what we hear
from them directly is they're
not like, they're not all,
they're not out there looking
to do five over one projects.
Those are the most expensive
projects for them to do, you
know, without getting into
taller projects, they add a lot
of extra costs that we that the
economics don't work. So, so
were they. The ones doing
multifamily are like where they
found the cost structure works
is in the lower density, three
story walkup type projects that
can eliminate a lot of the, the,
the other costs in podium type
projects. So, so our, our goals
are don't are different. We
want to see higher density
projects, particularly in areas
like commercial corridors
around transit, certainly
downtown, our strategic sites.
So we have this kind of
mismatch, but we need housing
built. We want development
activity. So I think part of
this is we're going to have to
just kind of come to the
realization that we're like,
this is what this is
development that can happen and
we should not fight it. We
should be, you know, helping
make these projects happen. And
then to the extent that we are
determined to achieve either
deeper affordability or density
or both, we have to change our
investment in projects. It
doesn't like our formulas that
we set up for how much we put
into projects, or how much we
price land in affordable
projects, or the MFTE stuff.
That formula doesn't work
anymore. So we, if we, if, if
we want to pay for these
outcomes, then we have to, we
have to do that. And then we
have this ongoing issue on the
other side where every time we
we do this report, the next
report is here's the budget
picture for the city. And and
it ripples through, you know,
everybody's got this problem.
So it's, it's, it's this
reality for us that, that we're
losing a lot of revenue.
There's also this ongoing
pressure, like we have a
construction sales tax deferral
program for affordable housing.
The legislature actually just
eased it this session. We can
expand it, but that's sales tax
is not is like is is immediate
revenue for us and construction
sales tax during the, you know,
2020, 2021, that drove a lot of
revenue growth for the city for
us to say, okay, we're going to
expand the eligibility for
construction, sales tax
exemption that like that could
get more housing built. But
that's a real revenue impact
for the city. There are other,
you know, impact fees. Sdcs all,
if we delay impact fee
increases, those all have real
impacts on our ability to fund
new roads and parks and things
like that. So, so the revenue
questions come up, become
really significant as we go
forward. Next slide. So we have
been doing a lot of work on the
housing side. You know, these
are all the little things. So
the other document that was
that was included in your
packet is this summary of the
housing action plan. We put
this together probably three
years ago now, and it's now
ballooned to about 65 actions.
And we actually have a pretty
robust spreadsheet that we
track. This is the condensed
version, the user friendly
version. But you can see, you
know, we're pretty happy that
some of the things that we've
pulled off and we continue to
work on are significant changes,
you know, so, you know, things
like, like we just, we just
approved what's on here. But so
you can see some things we just
did there, but we're making,
we're reducing development
times. We're due, we're
changing things like this, the
single stairwell code. So these
are all things that we're
slowly making progress on. They
all have this really
incremental impact on cost of
housing. But collectively we
hope they can make a big
difference. And then you can
see where we have our
priorities for the coming year.
So we already mentioned the
first two earlier. We did
reduce development review times
on the engineering side of
things. And Chad's team is
going to continue to look at
other parts of the development
review process. Are there other
ways we can squeeze out time
there? Single stairwell code.
Like I mentioned, we are
working on the six story wood
frame code, as I mentioned. So
hopefully that's something that
we can add to this list. And
then we, we are on track to
adopt the comprehensive plan. I
guess it's going to I heard
yesterday it's going to council
June 1st. Right. So, so and it
gets so then effective date of
it would be.
>> 60 days.
>> After that. So 60 days. So
it's it's a massive change in
land use for the city. And so
you can see this is just the
highlights of some of the
things that are going to be
coming through their
elimination of, of, of most
parking requirements. There's
going to be substantial changes,
single family zoning that will
allow for this middle housing
to happen in a lot more places.
And then there's some other
things. So, so massive changes
coming. You know, when we look
across the state and say, okay,
who's doing what on, on housing.
When you look at the broad
spectrum of things from, you
know, on the land use side, on
the investment side fees and,
and kind of our own advocacy on
this, we're not sure there's
many communities that are doing
more. And, and so there's a
frustration on our part that we
really are, you know, negative
rent growth is still dominating
all, all the, you know, it
overrules everything that we do.
>> So Patrick, could.
>> I add. Yeah.
>> Please do one thing doesn't
show up here, but another way
we're reducing development
review timelines as part of the
comprehensive plan is any
projects that's 200 units or
fewer will be classified as a
type one land use action, which
is a 28 day land use review
instead of 90. So huge decrease
in time spent by the developer.
We're going to have to really
improve our, our processes and,
you know, make our, our instead
of a staff report that you have
to write a, you know, a story
about, you can maybe have a
checklist. And so we're just
going to expedite the process
for these projects that are up
to 200 units.
>> And those, those types of
efforts also allow developer to
spend less on consultants, too.
So what's your if you're
allowing these kinds of things,
some of the environmental
things you're doing to make it
more efficient to get through
the CPA process, those are
things that'll lower the
development cost because those
all go into the formula, you
know?
>> Yeah. So the, the reason the
way we ended up at 200 units
for type one is that aligns
with the maximum CPA exemption
allowed by the state. So we're,
we're, we've already adopted
the, the maximum CPA exemption
for residential. We'll also be
adopting the maximum CPA
exemption for commercial, which
is 30,000ft². And then those
will all will align with type
one processes.
>> So yes, I was, I was really
impressed with that list, that
60 item list. I, you know, you
talk about the things you have
levers for. That's a lot of
levers and, and you know,
anyone in itself, you know, may
not, you know, deferring a cost
is a little just a tick on it,
but they do add up for sure.
>> All right. So. You know,
once again, looking forward to
conversation with leadership
and council kind of want to
highlight some, some additional
options that we we might have.
A lot of this is focused on the
affordable housing side of
things, but the top bullet is
really kind of the big one,
which is, you know, yeah, this
like if we continue to work on
this list, particularly the
things that, that, that keep
costs down, that streamline
processes that, that, that
shorten timelines, you know, we
are stripping costs out of
projects, we're making projects
more feasible. So going to
continue to push that and the
internal stuff, you know, our
conversations with leadership
that Chad and I have really are
about that, like keeping
everybody aligned so that we
don't have to like, kind of
react to some policy change
that we weren't in the loop on.
That's going to make it more
difficult to get housing done.
And really, we've had great
collaboration. So we just want
to continue that. The other
ones really are on the
affordable housing side like we
have. We have this pipeline of
projects that we know are ready
to go on the affordable housing
side that can't get state
funding. So what else can we do
to maybe move some of them
forward? So, you know, we we've
we have a we do a lot of ground
leases on affordable housing.
So we can use a sliding scale
for evaluation. So deeply
affordable, basically are
getting property for nothing
but ones that are doing our
workforce. We're trying to get
it closer to 50, 60% valuation.
We convened a whole group of
developers on the workforce
side. Maybe we're not
discounting enough. Maybe we
need to to discount property
valuations more. There's a, you
know, when when council looks
at that, the way that they
think about it is what am I
getting? Right? And so getting
80% Ami units doesn't feel like
you're getting a lot. And so,
so that's part of what we have
to work through is how do we
make sure everybody understands
getting units locked in at, at
that rent level actually is a
benefit. It fills out the, the
spectrum of housing options and
gets projects built too. So, so
valuation of land. Obviously
I've already mentioned the
density expectations, but you
know, like the heights in
particular are back here behind
City Hall. Like density is one
of the main goals of those. So
are we going to step back from
those goals for those projects?
I don't know the answer to that
yet, but we have other city
properties that we've been
acquiring in different
locations where we actually
don't have the same, you know,
kind of massive planning effort
that has created a lot of
expectations there. We probably
can experiment more in other
properties and see how long
this, this, this set of market
conditions continues. We
probably need to increase our
direct investment in projects.
So put more of our affordable
housing fund dollars into
projects. So we're probably
going to be taking changes to
council on that. And then we've
heard from a lot of folks that
that that are out there trying
to move projects forward
without funding locked in, that
they're taking on a lot of
costs. On the pre-development
side, we've never had a
pre-development program.
There's been pre-development
funding out there from other
places. The VA's been doing it,
some of the foundations, but we
feel like maybe we can we have
some funding source to make
that happen and see if that
will help some some projects
move forward. We don't have the
depth of funds to do a. There's,
you know, there's other kind of
multifamily lending ideas that
might that would make sense in
this market. We don't have the
depth of funding to do that.
The state needs to step up if
that. So pre-development is
really the one area I think we
can step into that we're not
into right now. And so yeah, so
that's the update. And I, we
shared with the subcommittee
that we, we have a limit on
presenting to city Council 15
slides. This topic needs about
30. So there's a lot of other
topics that are out there. So
happy to delve into any other
kind of side issues that you
feel like we didn't, we didn't
touch on, but, but then yeah,
there's, there's a set of
questions up here, you know,
you know, what else could we be
doing? What other observations
on the market? You know, how
should the city be thinking
about prioritizing its work and
just any other, any other
thoughts? And once again, with
an eye toward, we're going to
be presenting this to to city
leadership. And so any, any
insights you have we can bring
along, we can share those too.
>> Yeah, I think this is great.
And I appreciate that you all
are thinking about even the
incremental and every element
that goes into reducing costs.
One thought and presenting this
to council seems what I'm
hearing is really trying to get
to this message of all housing
is good. Is that correct? Maybe.
And I don't know if that is
clear, but just in that
description of I know trickle
down is an awful way, but maybe
even a graphic of that
limitation. And and I don't
know if city Council has
embraced, but I think that's
going to be a big shift of
where we're going and thinking
is all housing is good. So
that's something I would
recommend maybe conveying.
>> If you recall, a few years
ago when we had Mike Wilkerson
present, he also presented the
City Council and he doesn't use
the term trickle down. He uses
the term filtering. And and I
and I, and that was presented.
I think that there's a
recognition of that concept,
but that they're still like,
then what's the city's
investment in all forms of like,
should the city be investing in
market housing? So I think that
where it becomes the question
then gets to, are we willing to
put money into non affordable
housing?
>> And I guess I would say no,
but in some communities, just
saying all housing is good is a
very important step. So that's
why I'm bringing that forward.
>> I think, you know, just some
of the stuff I brought up just
a minute ago is something you
ought to really present because
these are deregulating, I guess,
or lowering the regulation.
Pressure on cost doesn't cost
the city anything. It, you know,
it's not cash out of your
pocket. So there's some levers
you can pull that the city
doesn't have to fund. And I
think those are really
meaningful for, for, for both
the city and the development
community.
>> Any other comments or.
Looking at me?
>> I just want to say, I think
the city is doing a really.
>> Amazing job at being really
practical and forward. Thinking
about this, I brought up some
of the City of Vancouver's
efforts with the city of
Portland yesterday during a
meeting we had between the
private and public sectors, and
I think they were really
interested in learning more. So
I really appreciate all the
work that's been put into this
and all the foresight. Thank
you.
>> No further comments from me.
I think you're doing great.
Hopefully build more so. But
okay.
>> And I one of the things that
just the small point, but I
just, I, I've forgotten to
bring up this MFTE renewal
topic. I think it's worth a
even a small presentation to
this group since you, you're
actually doing your charter,
have oversight over MFTE. But
it is a, it's a brand new
dynamic in that the state
changed the law a few years
back. That allows existing
projects to apply for a second
renewal. And, and what's really
interesting about it is that it
allowed any MFT project,
including market rate projects,
to apply when they apply for
the renewal, you're applying
for the affordable renewal. So
we have, and so we actually
have a list of all these eight
year market rate MFT projects
that are within a couple of
years of their, their exemption
expiring. And they, you
mentioned the market conditions
for them. It's like kind of an
almost a no brainer. Take the
12 year exemption, set aside
20% of your units at 80% Ami,
which is kind of market. And
then you pick up another 12
year exemption. So that's a
whole new dynamic for us. The
City Council's already, I think
approved. One will have a few
else of those projects coming
forward, but it's probably
worth a conversation just to
keep you up to speed on what's
happening there.
>> So you're gaining affordable
without having to build it.
>> But we're also losing like,
so that that project is now
going to have 20 years of not
paying property taxes.
>> Or 12.
>> Well, it's already had eight
and it'll got another 12. So
and, and I think one of the
debates and, you know, council
had really serious questions
about it because there was a
question about what are we
buying? Because when we do the,
the, the MFTE for a new project,
we're helping get it built. Now
it's built. So what are we
getting for 12 years? And, and
we, and we do a typical
analysis for them that is like,
what's the market? What's 80%?
And there's not a lot of
difference. If you do some kind
of like NPV on it, it doesn't
look good. They're getting, you
know, kind of a $4 million net
present value MFTE exemption
for, you know, less than $1
million of actual rent benefit.
The problem is you can't
foresee rent growth and where,
what the delta between market
and 80% will be ten years out.
So, so there's a lot of
unknowns about it. And there's
also this whole idea that 80%
army units don't just control
rent, they control who can
qualify for a unit, which is
this filtering concept. So now
we're getting really wonky like
so, so, so in a, in a tight
market, people who are, who are
one income level are basically
competing for, for housing that
is at a, that is priced for a
lower income level. So that's
what happens. They get, they
get pushed down. So when you
have a rent restricted unit,
not only do you keep the rent
at a certain level, you
basically keep all those other
households from being competing
for that housing. So that's a
benefit that you can't we can't
quantify in a way that says
that's what we're buying here.
But that's the argument we've
been making with those. But
it's certainly a topic that
there are differences of
opinion about what we're
getting. So it's not a slam
dunk kind of conversation. But
but we can bring this to you
and have this conversation more
in full because like I said,
there could be maybe over the
next five years, we might,
there might be a dozen projects
that get that get this. So and
a lot of them are downtown.
>> So and there's the, the
transit overlay district bill
that was passed last year that
has some MFTE implications to.
>> Okay, if there's any any
more discussion or comments, I
guess we can go ahead and say
we're adjourned. Thank you guys
for all your work.