Portland suburban builder switches to small-scale urban infill, despite long list of challenges

From the Oregonia writer Elliot Njus: "When Renaissance Homes filed for bankruptcy in 2008, the builder was known for sprawling subdivisions on the fringes of Portland.  Two years after emerging with a reorganization plan, the company has positioned itself as the No. 1 builder within the city of Portland -- building mostly one-off houses in long-established neighborhoods. "It's an unusual move for a builder the size of Renaissance.  Bottom line: Building in the suburbs is cheaper and easier. The sites are closely grouped with plenty of space for equipment, and all the infrastructure is new. Permitting several sites in a planned residential area is a breeze compared with doing one at a time in the city.

"Building in existing neighborhoods comes with obstacles not seen in the suburbs, and that makes most larger builders wary.  Infill development is expensive and risky, and builders lose many of the advantages that come with scale.  It's difficult to find and secure suitable lots, and staging and staffing costs rise without the advantages of scale.  The projects often require costly infrastructure upgrades, like increased sewer or electric capacity.  In the neighborhoods where the company is siting its new homes in Portland, there's usually little parking, and some haven't seen a new home built in decades.

"There isn't much room for mistakes with the new strategy.  With the increased expenses, homes in the infill market have narrower margins than their counterparts in the suburban subdivisions.  But company president Randy Sebastian thinks the days of building on the fringes -- the strategy that got his company into trouble -- is coming to an end.  'We've made mistakes, but we're learning every day,' Sebastian said."  Full article here.