EcoFlats: One More Unsustainable Green Icon for Portland

timber money tree.serendipityThumb EcoFlats: One More Unsustainable Green Icon for PortlandBy Christopher Robinson

So-called “sustainable development” is a longtime political interest in the city of Portland. Although the term itself is never defined, the concept implies the use of “green” design and technologies in order to reduce energy consumption, water use, solid waste and automobile travel. The loftiest goal is “net zero,” whereby all electricity and water needs are met from on-site generation and no outside sources are necessary.

One such “sustainable” project is the EcoFlats apartment building located on North Williams Avenue in Portland’s Boise neighborhood. Recently, the development received a good deal of media coverage due to its implementation of green technologies and an “affordable” price tag. EcoFlats has no interior hallways, no air conditioning, a large roof top solar array and the goal of net-zero energy usage. On the surface it would seem an excellent model for future affordable, sustainable development; but an extensive back-story to EcoFlats’ financing and planning reveal otherwise.

First, EcoFlats’ location is no coincidence. Although promoted as a bicycle commuter friendly location (North Williams Avenue is considered a major “bicycle thoroughfare”), it is within the Portland Development Commission’s (PDC) “Interstate Corridor Urban Renewal Area.” This means businesses and developers can receive subsidies from PDC. EcoFlats sits on land previously occupied by a small equipment repair shop, which was considered underutilized space. In order to aid redevelopment, PDC provided the developer with a $740,000 commercial loan representing roughly 23% of the total project cost. Loans approved by PDC are intended to close financial gaps and may have reduced interest rates if applicants meet certain requirements, such as using sustainable technology.

In addition to the incentives from PDC, the developer also applied for Oregon’s business energy tax credit. The program covers up to 50% of costs towards the purchase of certain technologies. These include high-efficiency combined heat and power projects, such as the $200,000 solar array on top of the building.

The estimated costs are misleading. Tenants pay the energy costs for their residence, so the tax credit only benefits the developer. Proponents argue that energy costs will be lower because the building produces its own energy, cancelling out the cost of solar panels. However, the solar panels are subsidized by taxpayer money. All Oregonians, including the tenants, are footing the bill.

Furthermore, the developer of EcoFlats was not required to build any off-street parking for the building, a significant subsidy that allowed for more revenue-generating units. The developer received a parking exemption because North Williams Avenue is considered a “transit street” because it has a TriMet bus route. However, the majority of tenants likely will own an automobile, meaning the surrounding neighborhood will have to bear the burden of increased on-street parking.

Finally, EcoFlats is part of Energy Trust of Oregon’s “Net Zero” pilot program. The Energy Trust is a non-profit organization funded through a three percent, state-mandated surcharge on customers of the state’s largest energy suppliers, including PGE, PacificCorp and NW Natural. The Energy Trust works to promote reduced energy use by providing incentives from the money they collect. Projects enrolled in their “Net Zero” pilot are eligible to receive up to $575,000 in various incentives. The goal is to achieve net-zero energy consumption through careful planning and implementation of new technology. Again, however, the benefits are concentrated in developments such as EcoFlats, while the cost is spread across all who pay the three percent energy surcharge.

In total, EcoFlats has $1,415,000 in potential and realized subsidies, representing roughly 44% of the total project cost. Yet, even with these subsidies, the rents are very high for the local market. Portland Housing Bureau designates the Boise neighborhood as a low-moderate income community. Rent for 600- and 750-square-foot apartments at EcoFlats are $1,000 and $1,500 a month, respectively. This means it does not meet the requirements of low-moderate income families for affordable housing, which should represent less than 30% of gross annual income. Current Boise neighborhood residents are effectively priced out of the development.

There are clear winners and losers here. The 18 residential units and two commercial spaces are filled, which is good for the developer. The City of Portland wins, because they now collect almost double the property taxes on the land. The Energy Trust wins, because they can claim more energy savings, though whether or not the building ever achieves its net-zero energy goal will depend on the usage of the tenants. It will require a conscious effort in order to do so, and actual performance is likely to lag the estimated performance.

Oregon taxpayers and all who pay the Energy Trust surcharge are the big losers. They are required to make up the difference in costs for “sustainable development” but receive none of the touted benefits. EcoFlats is only one in a long list of heavily subsidized projects which have increased in number in recent years. Eventually, people will realize that “sustainability” in Portland is not about helping the environment, but rather about creating an image that only benefits a select few.


Christopher Robinson is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Posted by at 05:00 | Posted in Energy, Global Warming, Government Regulation, Portland Politics | Tagged , , , , | 20 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Firth Havaweather

    Wine toting liberals will be the first the move in when opened…and the first to move out when they realize that a “Green” building is very expensive to maintain.

    • Hobojoe

      I believe wine is mentioned in the Bible. I think it is healthy in modertion. I wish you would not resort to name-calling. I like a nice bottle of wine every evening…

      • Anonymous

        And you are an insult to hobos everywhere.

  • Proudgreen

    The cost for this building and the rent is not important in the slightest. What is important is that Oregon is once again leading the way to sustainability just like she did in the old days with the original bottle bill. As more of these buildings are built costs will come down and the environment will be all that much for the better.
    I applaud these so-called “greenies” for doing something – anything – to help cure our mother, the earth.
    Plus, if everyone rode a bike our country would be much better off.
    Much.

    • Ronglynn

      Right on! It does not matter if this project does not make any economic sense. It is the sincerity of the effort which is most important. We are on the long road to saving the Planet Earth and we have to keep trying to make a difference no matter how much it costs. People need to be downsized in their homes and we need to make people give up their cars. We do not have much time left to get the job done in time to save many millions of people from Manmade Global Warming. Only the gods know if we have enough time left to save the Blue Marbal.

      • Anonymous

        When do we start building gulags.

      • Anonymous

        “The economy is a wholly owned subsidiary of the environment, not the other way around.”– Gaylord Nelson, Governor, US senator 

    • C. Robinson

      Proudgreen,

      If developers and private investors wanted to spend 100% their own money on these projects it would be fine. The point is, they are being subsidized with public tax dollars. In reality a building like EcoFlats isn’t possible without such subsidies and wouldn’t be built on a large scale. Also, even if everyone was in fact better off by riding a bicycle, if they were forced to do so, it wouldn’t be worth it would it? 

  • Founding Fathers

    I’m waiting for the article on Oregon Catalyst calling for an end to the huge subsidy for nuclear power through the Price-Anderson act.

    Oh, wait, you LIKE subsidies for dirty energy.

    • Rupert in Springfield

      Just like all of us are eagerly awaiting the day when a liberal will actually defend some of this nonsense without trying to change the subject.

      I love the logic here – pointing out one bad subsidy justifies another bad subsidy.

      Starts to sound a lot like overspending by Bush justifies overspending by Obama.

      Same ol same ol. Ill tell ya, you can read these guys like a book.

      • Founding Fathers

        I believe some subsidies are justified. Subsidies for dangerous technologies are a bad idea, but “conservatives” seem to love them.

  • Bob Clark

    Governance in stump town isn’t reality based as city hall and Metro completely ignore excessive capital costs (backed by taxpayers who are largely unaware how their local government runs up a mound of public debt).  Organizations like TriMet tout operating savings for light rail all the while ignoring the huge capital cost disadvantages of these projects.  There’s no limit to “telling big lies” by city officials to achieve their green image, reality be damned.  For instance, last summer the city of Portland’s Office of Sustainability published a statement that there was floating mass of plastic (bags) the size of Texas in the Pacific Ocean.  This was relatively easy to show as an outright lie as even OSU and Greenpeace environmental scientists couldn’t stomach such misinformation and called the Sustainability Office on it. 

    P.S. Steve Duin’s Oregonian editorial attacking lobbyists for stopping the statewide plastic bag ban was really laughable, as it completely ignores the bull face misinformation campaign of Portland’s Sustainability Office (backed by Mayor Adams).

    Maybe when sugar daddy federal govenment cuts off the (deficit based) candy money for light rail and other economically dubious projects, reality based governance might return grudgingly to stumptown.

  • Patterns of Freedom

    It would be wonderful if the covenants and restrictions (HOD’s) for the homeowners and businesses here included NOT being allowed to own a car.  There’s a very green development in Freiburg, Germany, where only 40% of owners are allowed to own a car.  (Google: Quartier Vauban)  And, there are huge fees to be paid up front if an owner does want to own a car (Last I new it was about $14,000).  All too many of these PDX Greenies talk zero carbon, but drive their own cars, and fly (immense carbon footprint) for vacations to foreign lands. 

    • Firth Havaweather

      Exactly…Socialism for thee but not for me.

    • C. Robinson

      You bring up a very valid point…people still want to drive cars, because they are the most convenient way to get around. If a developer wanted to build high density housing, lease to only those people who did not own a car, and assumed 100% of the financial risk, it would be fine. My main point is that these projects should not be subsidized by the government, especially when schools and other valuable community assets are so underfunded. 

      • http://www.facebook.com/evan.mackenzie Evan MacKenzie

        If cars are the most convenient way to get around, why are so many people riding bikes and walking in Portland? We Americans are so addicted to “convenience” that any impediment to achieving happiness is some kind of catastrophe or government intervention.
        We can talk about local, State and Federal subsidies until the cows come home. Just like taxes, one purpose of subsidies is to attempt to encourage “desirable” behavior and/or discourage “undesirable” behavior. Sometimes it takes one or both to encourage people to push the envelope while a new product or technology is in its infancy. The extraction and use of finite, non-renewable resources has matured, and now we realize we must find alternatives. The old “reduce, reuse, recycle” mantra. We do not need to subsidize old technology and products; we need to subsidize things that reduce reliance on them. We all know what happens when we have competition for scarce resources, and nobody wins.

      • valley dude

        They are convenient for some people, and some people choose that way of getting around. But the convenience of driving come at a large cost. Cars are expensive to own and operate, streets are expensive to build and maintain, air pollution is expensive in health care, and  oil lanes are expensive militarily to keep open.

        Developers and many others are making market choices every day that lessen the need for people to drive, without eliminating that as an option. Look around. The world is changing. Subsidies are just a way to nudge things in the better direction.

        • valley dude

          I forgot to add that I myself have two cars.  Now I drive them as a necessity and not for fun, like most Americans.  Even though I know that automobiles will soon be a thing of the past, people such as myself will still drive, to make sure that others are not.  Sound crazy?  Well then you just don’t understand the economic theory of need, not want…

        • valley dude

          I forgot to add that I myself have two cars.  Now I drive them as a necessity and not for fun, like most Americans.  Even though I know that automobiles will soon be a thing of the past, people such as myself will still drive, to make sure that others are not.  Sound crazy?  Well then you just don’t understand the economic theory of need, not want…

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