On May 8, the Portland Planning and Sustainability Commission held its first hearing on the Residential Infill Project, which includes strict size limits for single-family homes that can be built or remodeled in most areas of the city. To that end, the city’s proposal would limit house size to 50 percent of lot square footage, although certain basement and attic spaces will not count toward the maximum.

This is the first time in recent memory that the city has attempted to limit house size as a general matter, and if the regulations are adopted, Portland will become one of only a few Oregon jurisdictions with residential floor area ratio (FAR) limits. The City Council and the city’s planning staff have promoted this change as a way to reduce the impact of new development on existing neighborhoods while artificially constraining the values of existing homes. However, the proposed FAR limit – especially in such a restrictive form – would, if adopted, bring city regulation deeper into the private sphere but probably not create enough housing to justify the intrusion.

The strictness of the proposed limit is noteworthy. For the typical 5,000-square-foot Portland lot, new and remodeled houses will be limited to 2,500 square feet of floor area. To put this in perspective, current single-family zone setbacks and height maximums would, in theory, allow a home of up to 6,750 square feet on the same lot. Thus, the 2,500-square-foot maximum is a 62 percent reduction in the potential size of a home on the most common Portland lot. On larger lots, homes can be larger but are still limited in proportion to lot size.

The Residential Infill Project was originally focused on providing additional allowances for duplexes and accessory dwelling units (ADUs) – policies that have the virtue of increasing options for new units in existing neighborhoods. In the background, a general 2,500-square-foot limitation on single-family homes arose as a way of assuaging neighbors’ objections to the feared proliferation of ADUs and newer-style homes, which tend to have a larger footprint.

Unlike typical zoning standards such as setback requirements and height maximums, which focus on the direct impact of a home on its neighbors’ access to air and light, a limit on house size really gets at tensions related to neighborhood change and image, the skyrocketing price of homeownership, and perceptions of increasing inequality in perhaps its most visible form.

Proponents seem to come from two camps: those who do not want to see houses out of scale with their own and those who believe that a limitation on house size will somehow reduce the costs of housing.

Whether this limit will actually affect housing availability depends on whether you ascribe to the supply side or price control approach to housing policy. An economic analysis commissioned by the city suggests that the new residential FAR limits will slow redevelopment of single-family neighborhoods and generally reduce the value growth of single-family properties, the cooling effect of which will likely offset predicted new housing production – estimated at only 86 new units per year.

Also, one can reasonably question whether keeping all houses to a maximum of 2,500 square feet will somehow make them affordable. Instead, the proposed limit will likely have a simple deadening effect: increasing construction costs and high city fees often make construction of smaller single-family homes uneconomical, which has induced many builders to focus their production in other cities – a trend that this proposal would only exacerbate. Neighborhood aestheticians and those who already have houses larger than 2,500 square feet are the big winners here.

Absent from this discussion is any consideration of the rights being lost by current and future homeowners, or any recognition that a residential FAR limit constitutes the city’s crossing of a long-standing regulatory threshold. Aside from the sheer invasiveness of this proposal, there are many practical reasons not to go there. First and foremost, house size principally relates to peoples’ private lives and only indirectly determines how they impact their neighbors. For many families, house size is driven more by family size than a desire for luxury and certainly is a factor in whether they can establish a multi-generational household. Second, by extending to remodels, the proposed limit will substantially cap how much sweat equity people can build from their homes, which smacks of ladder-pulling when one considers just how many Portlanders already have houses larger than 2,500 square feet.

The proposed alternatives are not more affordable. For those lucky enough to own a home, buying a house on a larger lot is not necessarily feasible and will only become more unaffordable if this proposal is adopted. Then consider the considerable city permitting fees and high construction costs of building an ADU. At the end of the day, adding to one’s house is still the most affordable option when new kids are born, mother moves in, or a simple increase in comfort is sought. It is also one of the best ways for younger families to build wealth.

A rejoinder to the points above could be that FAR regulations are common in multifamily and commercial contexts, so why not regulate single-family homes the same way? The problem with that argument is that it ignores how differently people see their own homes than do developers evaluating a pro forma on a project. Homes not only reflect current market preferences – much different from those when most Portland neighborhoods were first developed – but also include the expectation that, within some general boundaries, owners can do with them what they wish.

The Residential Infill Project will not limit house size in most of the city’s upscale west-side neighborhoods. But for those of us living on Portland’s flatter land, the proposed limit will become a major downside when considering reinvestment in existing homes and be yet another factor in choosing where to raise a family. True, it is entirely possible to raise a whole passel of kids in a 2,500-square-foot house. However, at some level, it should not be up to the City Council to make that choice for anyone. This will not be a bell easily un-rung, so we can only hope that the Council considers these substantial downsides and errs on the side of regulatory humility when deciding the issue.

Column first appeared in the Daily Journal of Commerce on May 18, 2018.

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