In December, residents began moving into the 34 units in the first phase of developer Richard Krueger’s Pacific Rim Apartments near the North Coast Retail Center in Warrenton.
Joe Barnes’ 5th Street Flats, a new 30-unit complex just behind the Astoria Recreation Center, has been at or near full capacity since coming online a couple of months ago.
While the North Coast has added its largest number of apartments in recent memory, other large-scale projects have languished amid higher construction costs and a labor force stretched by a post-recession building boom.
Krueger has among the most proven track records for builders in Clatsop County. He developed the 30-unit Edgewater at Mill Pond Apartments for seniors in Astoria in 2011 and 24 units in the market-rate Yacht Club Apartments on Marine Drive in 2014, along with a second phase of 36 apartments in 2016.
Krueger was rebuffed in attempts to build higher-density housing on the former Central School site in Astoria, and next to Lewis and Clark Elementary School south of the city, before he moved on to the Pacific Rim project in Warrenton.
“I would say it takes a lot of patience,” he said.
The second building of Pacific Rim is slated to come online in February or March depending on weather, adding another 34 units. Krueger is also hoping to break ground this year on more than 30 single-family housing lots on the site next to Lewis and Clark.
Laurie Willey, Krueger’s local property manager, said there are still more than 20 units available in the first building in Warrenton, with a waitlist of people wanting to get in. “I get several calls a day, mostly from out of the area,” she said.
Barnes said the 5th Street Flats have been full since opening. He is already planning to break ground early this year on a second phase, adding 12 more units, while also negotiating to buy a building downtown with 10 more rental units.
Barnes’ and Krueger’s apartments took longer to open than they preferred. But like other developers, they are facing a construction market busier than ever coming out of the Great Recession, with rock-bottom unemployment rates and a labor force stretched thin.
"The biggest challenge in general right now in the industry ... is getting help," Barnes said.
Barnes finished an almost identical project to the 5th Street Flats in Lincoln City in 2016. The costs for the Astoria project have gone up 34 percent by comparison, he said, in part because of a shortage of workers and more expensive materials. He also pointed to the Federal Reserve’s recent decision to increase interest rates for borrowers as a damper on investment in new housing.
Kevin Cronin, the community development director in Warrenton, said the slow progress on large multifamily projects is partially because of the lack of local contractors big enough to move such developments forward.
“It’s labor shortage and the bandwidth of the local contracting community,” Cronin said. “That’s the biggest stumbling block to our housing crisis.”
Jared Rickenbach, a local contractor and board member with the North Coast Building Industry Association, said that of the approximately 500 general contractors on the North Coast, maybe one or two are big enough to take on large apartment complexes.
“There is a significant shortage of construction laborers, carpenters and foremen in the local labor pool,” he said. “It would be challenging if not impossible to hire locally enough labor to perform those larger multifamily projects.”
Cronin’s office has several applications for large developments around Warrenton that have so far languished.
Growth in Warrenton
Local contractor Jason Palmberg received conditional use approval in March for a 66-unit complex across U.S. Highway 101 from Ocean Crest Chevrolet, but has yet to begin groundwork. The delay is largely because he’s already been busy helping to build Barnes’ apartments, Palmberg said.
He hopes to begin construction on his complex in the spring, with plans to bring the apartments online in 2020, hopefully as other complexes fill up and demand stays high.
“You don’t want to have all that stuff come online at the same,” he said.
Fort Pointe, the largest potential multifamily project in Clatsop County, has been been trudging along in starts and stops since Texas-based builder 210 Development Group purchased the property in 2006. The project promises about 300 housing units, including 130 apartments, 50 single-family homes and more than 100 smaller-lot homes in a higher-density new urbanist model similar to the Mill Pond neighborhood in Astoria.
“We try to sensitively design a project and set aside a tremendous amount of open space,” said Mark Tolley, a principal in 210 Development Group. “That type of master planning takes time.”
Labor and materials have gone up because of shortages, he said, but the demand for multifamily housing on the North Coast remains strong, and people should expect some fairly substantial announcements regarding Fort Pointe in the near future, Tolley said.
Local hotelier and developer Antoine Simmons scrapped his plans for the 37-unit Skipanon River Apartments near downtown Warrenton more than a year ago, citing construction costs. But the property recently changed hands, and local developer Randy Stemper said he is pursuing the same project, meeting with the new owners in the coming weeks on how to proceed.
Builders Cary and Stan Johnson were recently approved for a 120-unit multifamily complex on 22 lots near Tongue Point Job Corps Center. The project is expected to be built out in 2020.
Developers said they see plenty of opportunity for more multifamily housing in the region, albeit with the usual challenges of working through permitting and finding workers.
After hiring consultants for a housing needs analysis, Krueger said, there are at least two more possibilities for multifamily projects. "There's definitely more opportunities for growth in Warrenton," he said.