Pearl Family Housing - How We Did It
The Nuts and Bolts

Site Control - Rather than going out and finding this land ourselves, IHI responded to a Request for Proposals issued by the City and was selected as the developer through a competitive application process. The City acquired the site from Hoyt Street Properties at a discounted price of $1.3 million as part of an agreement between Hoyt Street and the City that 35 percent of the housing developed on its 34 acres in the Pearl would be affordable. IHI proposed three development scenarios to the City - a five story building with 40 units, an eight story building with 50 units, and a nine story building with 64 units. As the selection process proceeded, it became clear that the City wanted to maximize density on this site and when they selected IHI as the developer they asked us to redesign the building as a 12 story tower! In order to build that high, we had to purchase Floor Area Ratio (FAR), or additional development rights, from a nearby property owner. FAR is not always easy to find and can be difficult to price because there is not a reliable market for it. Fortunately, we were able to find a friendly seller and secure enough FAR to build our top two stories, but it added one more twist to the project.

Funding - Affordable housing development involves piecing together many different funding sources. The City of Portland awarded IHI funds on the condition that we apply to Oregon's Housing and Community Services Department for an allocation of federal 9% Low Income Housing Tax Credits. As the design evolved, so also did the budget and it began to make more sense to use 4% LIHTC's for this project. 4% LIHTCs are similar to 9% LIHTCs - they provide less equity but they are not capped, so as the project got larger and we reached the 9% LIHTC cap, we could actually get more tax credits using the 4% program. With tax credit equity as our largest source of capital financing for this $33M project, we hit a major hurdle in early 2017 when the tax credit market froze up as a result of a new federal administration and potential changes to federal tax code. You can read more about how this affected our project here.

The bottom line is the amount investors were willing to pay for tax credits took a large hit due to uncertainty about future tax liability, causing a $2M gap in our budget just months before we were supposed to close on construction financing and start the project. As a result, this project, along with almost every other tax credit development in the U.S., was delayed while we worked to fill the gap. IHI staff doggedly pursued additional financing and secured advantageous permanent financing that helped. The City of Portland stepped up and guaranteed another $750,000 so we could proceed with the project while IHI applied for grant funds to fill the rest of the gap. We submitted one application to the Federal Home Loan Bank of San Francisco that was not awarded. We have another application pending with the Federal Home Loan Bank of Des Moines. We are very grateful to the City of Portland, our investor Raymond James Tax Credit Fund, Wells Fargo Bank, Barings LLC, and Oregon Housing and Community Services for working with us throughout this process to ensure that the project could move forward.

Design - At IHI's request, Alex Salazar Architects teamed up with LRS Architects to design this project. That isn't the norm but we really wanted to work with Alex Salazar, who was new to Portland and had done some exciting work in other cities. He couldn't take on a building this large by himself, so we asked LRS if they would work with him. LRS worked with IHI on the Broadway Vantage Apartments and the Erickson Fritz Apartments we have a great working relationship. The combined vision and technical expertise of these two firms will result in a visually stimulating tower that maximizes floor space to create as many affordable homes as possible on a very small piece of land (10,000 sq ft).

IHI ran into a few bumps with the City's Design Review Process. Design Commission did not love our design as much as we do. We worked with Design Commission through two formal Design Advice Request hearings as well as additional meetings and, following their suggestions, we made many changes that improved the overall building's design. The ground floor in particular benefited from their guidance and input. Unfortunately, we never reached agreement on the upper floors, specifically our bright colors and rotated bays. We will be housing many large families who have experienced the trauma of homelessness. We expect that we will be housing many people from communities of color and immigrant families. We want all of our residents, whether they come from near or far and regardless of what they had to go through to get here, to feel safe and comfortable in their new homes. With this goal in mind, we asked our design team to design something different, with an energy that will draw people to the building and make them feel that it is a special place where they belong. We asked for metal cladding because we want to honor and complement the industrial style and history of the neighborhood. We love the energy of the resulting design. We like the bright pop of color and the unique rotated bays that call attention to the building and help it stand up to the massive freeway structure nearby. Design Commission did not approve our design, so IHI appealed to City Council in November 2016 and sought permission to proceed. City Council granted that request, allowing us to move forward on a unique, vibrant, and intriguing design, resulting in a place that we believe people will want to live.

Construction - Bremik Construction joined IHI's development team very early in the process - even before we applied to the City for the land! We involve our contractors from the beginning so that they can add value to the design process by reviewing plans and suggesting ways to improve the building while saving money. Bremik worked with us as we evolved this project from a 5-story idea to a 12-story development and started construction on June 22nd. This is a small site with a large structure, which means we have to fit a LOT of stuff in a very small space (an underground fire water storage tank, electrical vaults, generators, parking, etc.). To make it a bit more complicated, some of the soil is contaminated and had to be taken to special hazardous waste facilities once removed. To limit the amount of soil we have to remove, we are using a creative "soil mixing column" process to solidify our foundation - think of a very large kitchen mixer stirring concrete into the existing soil to stabilize it. This saves us having to dig up the dirt, remove it, and drive piles into the ground - the neighbors love it too, as pile driving is a very noisy process.

At the end of the day, we will build 104,090 square feet of gross building area and 79,234 of net rentable area that will house 93 families. Although we explored several different construction methods, we are using concrete post tension slab construction. The concrete slabs for each floor are poured in place, and we will be using a "full table system", which utilizes metal forms (called tables) that are flown in place by the tower crane. A post tensioned slab has a lot less rebar than a regular concrete slab. Instead, it utilizes cables that are inside greased plastic sleeves that are installed into the concrete when it is wet. When the concrete has cured, a hydraulic ram is used to pull the cables into tension (kind of like a guitar string). When the cables are pulled tight, they help to hold the concrete slab together, greatly increasing its strength and resistance to cracking.

Who will live here? This building is being designed to house families with incomes at 30%, 50%, and 60% of area median. That translates to $22,410, $37,350, and $44,820, respectively, for a family of 4 - before taxes. Rents are locked in at 30% of those income levels so, for example, the rent for a 3-bedroom apartment will range from $487/month to $1,077/month. 40 of the units will have Project-based Section 8 rental subsidy attached to them, which means a tenant only has to pay 30% of their income towards rent. If their income is zero, they pay zero. These 40 units will serve families who are homeless or at risk of homelessness and are referred by Multnomah County.

IHI has a large portfolio of family properties in the Portland region and the average income of our families hovers around 35% of area median, or $26,000/year for a family of four. As a result, we anticipate that the families who live in this new housing will have limited incomes and need wraparound support to maintain their housing stability. To help meet these needs, IHI will provide a full time resident services coordinator and draw on our expertise housing formerly homeless individuals and families to deliver support services designed to help our new residents use their housing as a foundation for success.

What is Innovative? The community space in this building is located on the second and twelfth floors. This provides a number of benefits for the property:

  • The space will be more secure for children, away from the main entry doors of the building on the first floor.
  • This allows most of the community spaces to be interconnected and enjoy a lot of shared visibility. We designed it this way so that parents can be in the laundry room or meeting spaces and still see their children playing in the indoor/outdoor play room, at the outdoor playground, or reading/working in the study room.
  • There is an outdoor roof terrace on the 12th floor of the building, which will have great views of the Willamette River and the city. Residents will be able to use the outdoor grill, enjoy a meal, or just gather and relax in this space.
Please follow our construction-in-progress photos to watch the building rise. Thank you for your interest in our work!