Local governments understand that addressing housing needs is essential to a healthy and resilient community and requires an “all hands on deck” approach. That means looking for partners in new places. Sometimes, those partners might be public ports.

Ports and housing may seem like odd bedfellows, but running a healthy port requires a secure workforce, which in turn requires healthy and securely housed people. Housing impacts workforce availability, quality, and equity: housing cost burdens and unstable housing are associated with negative health, economic, and educational outcomes for both adults and children. These also tend to disproportionately affect marginalized populations, including low income and communities of color.

From many ports’ perspectives, the current housing gap is therefore both a short-term emergency and a chronic issue in need of a strategic solution. Housing shortages can negatively impact port operations and productivity today and into the future. Ports have a compelling interest in helping the communities they call home broaden entrée to accessible, high-quality housing, which is why some are showing up as partners to meet housing demand and promote housing stability.

In Savannah, the Georgia Ports Authority is a financial contributor to the city’s affordable housing development fund. The Port of Cincinnati buys and sells houses, and works closely with both Cincinnati city management and Hamilton County management to champion infill development and promote homeownership. The Port of Portland, Oregon, is using its expertise as an industrial developer to turn a former marine terminal into a housing innovation hub focused on making housing affordable, sustainable, and a job-generator for communities statewide. Farther up the west coast, the Port of Bellingham, Washington, has planned for housing as part of waterfront redevelopment. It put these plans into action by selling former industrial land to a nonprofit affordable housing producer, with support from the local community foundation.

Ports approach housing differently depending on their communities’ needs. Their stories, however, share a penchant for creative partnerships that bring new resources and networks to the housing realm, highlighting novel possibilities for housing production and preservation.

Georgia Ports Authority: Investing in Savannah’s Housing Fund

The Port of Savannah is the largest port operated by the Georgia Ports Authority. In 2021, it clocked in as the nation’s fourteenth largest port, handling about 10% of U.S. imports and exports. A 2021 study estimated that the ports authority generates one job for every 10 containers it handles, with direct and indirect economic impacts reaching 560,000 Georgians.

In September 2023, the ports authority pledged $6 million over eight years to Savannah’s Affordable Housing Fund. The fund, which is managed by the nonprofit Housing Savannah, supports the production, preservation, and improvement of housing for Savannahians at all income levels.

The Georgia Ports Authority’s contribution constitutes the fund’s single largest infusion since its founding 12 years ago. This investment will support home repairs for low- and middle-income residents, plus down payment assistance for qualifying buyers, and it will target the near-port communities that a significant portion of the Port of Savannah’s workforce calls home. “This is an investment in our people and our neighbors, and the quality of life around us,” says Jamie McCurry, chief administrative officer at the Georgia Ports Authority.

Savannah was founded in 1733, and established itself early as a trading center. The port and city of Savannah grew together, with all the give and take that requires around issues like environmental impacts, traffic management, and infrastructure needs. While the port has historically been engaged with city management and neighborhood associations, its support for housing is new. “In terms of big-dollar investments, this is certainly the first when it comes to housing. It’s important and innovative,” says Jay Melder, city manager of Savannah.

When Melder joined the city two years ago, housing and homelessness were top priorities. Then in May 2022, Hyundai announced it would locate electric vehicle and battery manufacturing facilities near Savannah, bringing over 8,000 jobs—Georgia’s single largest economic development project ever. Combined with the ports authority’s February 2022 announcement of its intent to expand the Port of Savannah’s container capacity by 60%, these exciting developments heightened demand for immediate strategic action on the housing front.

Meeting Savannah’s housing needs required more support from institutional partners, and Melder set out to bring them to the table. He toured Savannah with Jamie McCurry and Georgia Ports Authority CEO Griff Lynch, highlighting housing needs as well as progress the Savannah Affordable Housing Fund had already made. “It was a three-hour tour, like Gilligan’s Island,” laughs Melder, “but stepping off the bus, there was an immediate commitment to bring this forward with the board and partner with the city.”

Four key partners form a tight-knit web that makes much of Savannah’s affordable housing happen, and key for the ports authority was understanding how and where it could plug into existing efforts. The nonprofit Community Housing Services Agency (CHSA) finances housing projects, issues mortgages, and manages the Savannah Affordable Housing Fund, of which every dollar spent leverages an average of $9 in private investment. The city’s housing department facilitates projects via direct development or by waiving permitting fees and providing infrastructure. The Chatham Savannah Land Bank Authority—Melder calls it a “secret weapon”—acquires properties via donations and tax sales, which can significantly lower the total cost of construction. Finally, Housing Savannah, Inc., a nonprofit created out of the city’s 2021 Housing Savannah Action Plan, raises private capital to support the Savanah Housing Action Fund.

These four partners created a clear landing spot for outside investment. “We found the right structure and partners to work with,” says McCurry. “Being able to be a part of not letting those neighborhoods continue to deteriorate, but hopefully continue to improve was a priority for us.”

From the city’s perspective, “We’re hoping to create something that people can’t resist being part of,” says Melder, “…and when we think about the last year, our record for private investment has been broken three times,” with the Georgia Ports Authority’s $6 million contribution setting the new bar. “[People] see that success and want to make sure it continues.” For Melder, the lesson here is about deliberately finding points of commonality with major institutions and working together for mutual benefit to redefine how work around housing happens. “When you can identify a common goal, then you can start to be optimistic about what partnerships can mean,” he reflects.

Port of Cincinnati: Driving Redevelopment and Neighborhood Revitalization

The Port of Cincinnati has no maritime operations. Instead, it’s a brownfield redeveloper, community financier, and neighborhood revitalization resource with a board jointly appointed by the city of Cincinnati and Hamilton County, and funded via a complex mix of fees for service, grants, and income from real estate assets.

The port is effectively working to unwind the lingering impacts of the 2008 financial crisis, and is clear about its intent: “Our organization, in talking with our community partners, has really decided that it’s more about wealth building than permanent affordability,” says Port of Cincinnati Executive Vice President Philip Denning. In 2021, Hamilton County home values finally returned to their 2006 levels. The neighborhoods where the port works are disinvested, comparable sales are low, and homes are systemically undervalued—all reasons why the Port of Cincinnati does not focus on affordable housing in its neighborhood revitalization work. “To put a cap on all these properties forever is going to cement a lot of the realities of those neighborhoods for a much longer period of time,” says Denning, “so we’re really focused on homeownership and wealth creation.”

Since about 2014, the Port of Cincinnati has directly supported housing development. In its first major effort, the port acquired 20 homes from the local land bank in a neighborhood of 8,000 people that hadn’t seen a home sale in nine years. The port renovated those homes and sold them at market rate, losing about $2.5 million. And then it went back for more. “We lost a little less every time,” reports Denning, and eventually these properties sold at a profit. Then the port ran out of neighborhood homes to rehabilitate. With the neighborhood’s housing market resuscitated, the port stepped out, leaving the private market to step in.

In 2020, the port embarked on a new approach to housing preservation when it learned that over the past six years, more than 4,000 single-family homes in Hamilton County had been purchased by just five institutional investors, who were using them as rental stock. Institutional investors snapping up single-family homes had been a topic of national discussion for several years, but as Denning notes, it was still “a crazy thing to learn.” When one institutional investor’s portfolio entered receivership later that year, the port suddenly had the opportunity to bid on 194 tax-delinquent, renter-occupied single-family homes in Hamilton County. It was timely, but there was a hitch: “All the work we had done before in housing never had a tenant—it was all vacant,” says Denning. What kind of reputational risk might accompany acting as a landlord? What if the port had to evict renters?

The port immediately engaged tenant advocacy organizations, and “all those advocates said…‘no, this is really a moral imperative. We want you to move forward with this,’” Denning recalls. The plan was for the port to purchase the 194 properties, provide financial counseling, and give tenants the ability to become homeowners, with the goal of selling all homes within five years. With the help of 30-year bonds, the port could break even on its investment while creating meaningful change in the local housing landscape and stemming the tide of institutional investors moving into Hamilton County and Cincinnati.

The port offered $14.5 million, or about $75,000 per house, bidding against 12 institutional investors. Due diligence for all bidders was limited to touring 30 homes that had been pre-selected by the receiver. The port was in it to win it: “Our board was so supportive that in the middle of the diligence process they had us up our bid, which is a strong demonstration of the risk profile and the mission of our board,” Denning notes.

The port won the bid and closed on the properties, at which point “everything was really just in chaotic disarray,” relates Denning. The port had anticipated ten vacant houses, when there were actually 60. Of the approximately 150 tenants occupying the 194 homes, 90% were more than one month delinquent in rent, and 25% were more than six months delinquent. The quality of the homes was also much worse than anticipated, which would require the port to nearly double its original estimate in home improvements. With acquisition costs, that would raise the cost per home to at least $150,000—30% or more above comparable market sales for the target neighborhoods. Banks would be anxious about backing mortgages on these properties: “Now we have this appraisal gap problem that we’re working to try to understand and fill and fill within a lot of these neighborhoods,” says Denning. Unwinding the impacts of 2008 requires nothing less than remodeling some neighborhood housing markets, not unlike a home renovation.

Two years have passed since the port purchased its first receivership portfolio. The port is now offering financial counseling and homebuyer training to tenants, while renovating around 45 single family homes. Four have sold so far, all at market rate and with a five-year deed restriction that requires the owner to sell to another homeowner. Over the next few months, another 18 properties will hit the market, and while this project began with a great deal of uncertainty, “it really opened a door for us,” says Denning. The port recently closed on another receivership portfolio of 70 properties in Cincinnati.

For Denning, who previously served as director of community and economic development for the city of Cincinnati, what sets the port apart is its perspective and orientation: the port goes where the private market won’t and municipal government often can’t. “The port has all the public tools and capability, but having the flexibility and the risk appetite and the speed to act like a private institution is the difference maker,” says Denning.

Port of Portland: Fostering R&D to Support Housing Production and Social Equity

The Port of Portland, Oregon, is the state’s largest industrial developer and a regional economic engine that manages three airports, three marine terminals, and six business parks. Now, the port is transforming the former marine Terminal 2 (T2) into a Mass Timber Campus, all with the goal of jumpstarting a new industry while building housing affordably, sustainably, and innovatively.

Mass timber consists of prefabricated wood panels such as cross-laminated timber that make construction and renovation more efficient, use sustainably produced wood, and can also be disassembled and repurposed. The mass timber industry is growing rapidly, and T2 is a critical part of the port’s bid to harness a regional resource and traded-sector industry at home to build more homes. “Mass timber manufacturing technology holds the potential to accelerate production of high-quality homes at lower costs and to generate good-paying jobs at the same time,” says Port of Portland Director of Business and Properties Teresa Carr.

Leasing at T2 has already begun, and at completion, the campus will be home to mass timber research and development facilities, a university laboratory, and housing producers working on a variety of modular and mass timber methods and products. It will also host incubator space for startups working at the intersection of housing, mass timber, and climate change. “T2’s evolution into a housing and mass timber innovation hub is more than a development project—it’s a way to bring the port’s mission and vision to life by creating powerful opportunities for working Oregonians and small business owners and revving Oregon’s economy,” says Carr.

The port understands increased housing production not only as a job creator, but as a tool for combatting economic, social, and racial inequities. The vision for T2 includes strengthening and deepening the state’s workforce to support the growth of the mass timber and housing industries, while foregrounding social and economic equity. Working with Portland Community College and other partners, the port is fostering the development of urban and rural workforce training programs statewide to connect people with jobs in forestry, fabrication, and manufacturing, with guidance from a port-established social equity workforce oversight board.

The port envisions T2 both as a hub for building homes and for building wealth through high-quality jobs and secure housing. As Carr notes, T2 will be “providing skills training and professional development opportunities for women, people of color, and people from low-income communities, and creating opportunities for small businesses to be part of an emerging industry.”

T2 received a crucial catalytic investment in 2022, when the federal Economic Development Administration awarded the port and its partners in the Oregon Mass Timber Coalition a $41.4 million Build Back Better Regional Challenge Grant. The award funds work on mass timber supply chains, development codes, design testing, forest restoration, and workforce training. The largest piece—$10 million—supports development of infrastructure for the future Mass Timber Campus at T2.

The Port of Portland’s transformation of T2 illustrates the profound connections between housing and economic development. Ports can repurpose and revitalize underutilized assets to attract advanced manufacturers that address housing shortages, create jobs and economic security, and build new economic clusters and synergies. The Port of Portland is well positioned to expand on the expansive opportunities T2 presents. As Carr observes, “There could also be a trade aspect, as many ports move the raw materials of housing. Why not move more finished valued-added goods as well?”

Port of Bellingham: Planning for Housing and Setting the Table

Washington is home to 75 ports, a significant percentage of the nation’s total. They vary from large and mid-sized maritime facilities to smaller, non-maritime ports that support economic development with investments ranging from business parks to recreational amenities.

Like ports around the country, Washington ports are promoting economic development amid a housing shortage. Their relationship to housing, however, is circumscribed by state law. As Washington Association of Public Ports executive director Eric Ffitch describes, “Our ports only have those powers that are granted by the legislature, and while those have expanded over the years, they remain open to wide interpretation and analysis by ports and their legal counsel.”

As a result, Washington ports are approaching the question of housing in multiple ways. “Ports undertake their analysis independently and arrive at conclusions based on their specific circumstances, and I have confidence that our commissioners will always act in the best interests of the communities they serve,” Ffitch notes. For some ports, housing may not be an option, especially if it conflicts with heavy industry. Some focus on job creation to facilitate economic mobility and home ownership. Others have planned for housing as part of waterfront redevelopment projects, working with for- and nonprofit housing producers to bring these plans to life.

The Port of Bellingham offers one example. Located along Western Washington’s Salish Sea, the port supported heavy industrial development throughout the twentieth century, including coal mining and timber. Like many ports nationally, Bellingham is in the business of growing local industrial capacity, while also remediating past environmental impacts.

In 2005, the Port of Bellingham acquired a 137-acre contaminated brownfield site from paper manufacturer Georgia Pacific. Its goal was to redevelop the property into a mixed-use waterfront district. Following years of environmental cleanup, the port used a 2019 state grant to evaluate the appropriateness of a 3.3-acre former warehousing parcel for potential future housing development. In 2021, and with support from the Whatcom County Community Foundation, the port sold that parcel to Mercy Housing Northwest, a nonprofit affordable housing developer that has produced more than 200 affordable homes in Bellingham to date. In a press release, Mercy Housing Northwest’s president, Joe Thompson, observed, “This project would not be possible without partnership,” and cited support from the city, port, and community foundation as essential.

Phase I of the new Millworks project will bring 83 affordable, family-sized apartments to market, as well as an early learning center that will serve about 100 children. The project will also feature a food campus designed to incubate value-added food products that will supply local restaurants and further strengthen Bellingham’s food and beverage industry. Construction of Phase I is underway, and in April 2023, the Port of Bellingham Commission voted to proceed with Phase II, which will add another 80 workforce rental and ownership units to the site. The port has also sold or extended exclusive development rights to for-profit developer Harcourt on 9.4 acres.

Cleanup continues on other sites around the Bellingham waterfront, with the end goal of incorporating parks, open space, residential, commercial mixed-use and light industrial development into a new waterfront for the twenty-first century.

Ports as New Partners in Housing Production and Preservation

Ports are economic engines, and they approach that work in different ways. “Many ports maintain the traditional ‘working waterfront’ model which, for economic and safety reasons, means the port complex is reserved for transportation and logistics. Other ports are reinventing themselves, though…Densification is the watchword for many port districts in growing urban areas,” explains Cary Davis, president and CEO of the American Public Ports Association.

That includes rebuilding disinvested areas and catalyzing the development of new economies around housing development. In Cincinnati, the port is a market maker. In Savannah, the Georgia Ports Authority is an investor. In Portland, the port is catalyzing a new traded-sector economic cluster. And in Bellingham, the port is expanding housing and revitalizing its waterfront through innovative and focused planning.

Like any business or institution, ports frequently balance mission, or community benefit, versus margin—traditional economic development seeking a return on investment. What sets ports apart is that unlike private companies, ports don’t relocate: they live where they are, and many of their workers are neighbors. Ports also have a different risk profile compared to local governments, which offers a comparative advantage—they can try new things and leverage funding in new ways. Ports can make investments the private sector can’t, and pave the way for private sector investment in the process.

Partnerships and an awareness of an organization’s comparative advantage transcend all these examples. As Savannah City Manager Jay Melder put it, addressing the housing crisis is hard: “You have to create a big, big toolbox to be able to apply all the tools, sometimes all at once, to make it work.” No institution, public or private, has the answer or the capacity to single-handedly address the housing crisis. If complex projects require all the right people rowing in the right direction, partnerships with ports just might bring all hands on deck to achieve full speed ahead.

 

SARAH SIELOFF is an urban planner and funding strategist at Haley and Aldrich.