What can you build on your own land? The answer to that question depends on where you ask it and what you’re thinking of building. Intuitively, you might imagine that you can build what you want, as long as it conforms to the zoning and building code – but the answer is different in Portland, New York, and Houston. Here in our backyard, the Design Commission is responsible for approving large-scale projects, and they have a clear mandate:
The Design overlay zone ensures that Portland is both a city designed for people and a city in harmony with nature. The Design overlay zone supports the city’s evolution within current and emerging centers of civic life. The overlay promotes design excellence in the built environment through the application of additional design standards and design guidelines that:
Build on context by enhancing the distinctive physical, natural, historic and cultural qualities of the location while accommodating growth and change;
Contribute to a public realm that encourages social interaction and fosters inclusivity in people’s daily experience; and
Promotes quality and long-term resilience in the face of changing demographics, climate and economy.
Last month, Portland’s leadership called the Design Commission into question. The Design Review Reform Report explores improvements – and potential suspension – of the Design Review process, with the broader objective of accelerating development.
Perspectives on the Design Review process are mixed – what it should entail, how it can improve, and if the Design Commission should exist at all. This is an active surface area for debate, and the outcome will shape the next generation of Portland’s building projects.
This week’s post is a transcript of a talk that Matthew Claudel gave to Portland’s Design Commission. It picks up on a provocative idea in the Design Commission’s mandate – supporting the city’s evolution – and advances a strong view on Design Review, grounded in Adaptive Urbanism. For a video of the full session (including a presentation by Will Smith and Randy Gragg, Q&A and discussion) see the city’s records here – and many thanks to Peter Andrews, Tim Heron, and the members of the Design Commission for your thought partnership.
Today I am going to talk about how the built environment adapts to what society and the economy need. Obviously, what society and the economy need is changing quickly, and what I’m going to share is a way that design commission can play a role in the process of the built environment adapting.
I’m going to make the argument that the work of the next decade is adaptive urbanism, and that design review can actually guide that process. And I’m going to be concrete because you’re dealing with very concrete issues.
The first part of my talk might sound a little pessimistic, but hang in there. You’re going to have a starring role, and it is, in fact, very optimistic.
I’m going to start off with what I call a tale of two towers. These are two very familiar and very iconic buildings in Portland. The first is Big Pink, the US Bancorp tower. It was designed by SOM with Pietro Belluschi, completed in nineteen eighty-three for around sixty million dollars.
For forty years, this building traded steadily upward. A $165 million in 2000, $286 in 2006, and $372 million in 2015. There are rumors that there would have been a transaction in 2019 that would have put this well over four hundred million.
The building was renovated in the mid-2010s and achieved LEED platinum status in 2019.
But in July 2025, Big Pink sold for $45. That’s less than its 1983 construction cost in nominal terms, and it’s a fraction of the capital invested over decades. It’s probably less than the land is worth.
This building was beautifully designed. It was beautifully maintained. It was owned successively by JP Morgan and JLL and UBS, and it was managed by Unico, and these are the best in class. But Big Pink was designed for one purpose. It was designed to be a corporate office tower, and when demand for that purpose disappeared, the building’s value disappeared too. The big idea here is that buildings designed for a single purpose are stranded when that purpose disappears.
The second tower I mentioned is Block 216, the Ritz Carlton building. This is arguably Portland’s most impressive tower since Big Pink. The design is top-notch. It has premium branding with Ritz-Carlton. It had sophisticated institutional debt behind it. The financing was ambitious, but Portland in 2017 was extremely hot, and the note was based on the best possible projections.
But 9 months after groundbreaking, the world locked down. The tower was delivered in 2023 into a market that the developers could never have imagined when they started in 2017. On opening day, the office space was 15% leased. By mid-2025 it was 23% percent leased.
The hotel was operating around 45% below Ritz-Carlton brand average, and only eleven of the condos had sold. As you all know, in 2025, the lender took possession, and the total exposure was around $560 million.
But, again, I want to stress that this was not ineptitude. These are smart people working from information that had been reliable for decades. My read is that it wasn’t a bad bet, but it failed because they put all of their chips on the table for a single future, and that future didn’t emerge. The building was essentially locked into a single path. Even when it became apparent that they needed to pivot, they were unable to change.
These two towers are part of a cascade that we’re about to see in Portland and across the country. If you look at 7-10 year leases that were signed before COVID, they’ll be expiring now to 2027 or 2028.
Tenants are going to have to decide: do we want to take on this lease even though the rates haven’t materially decreased, or do we want to exit entirely? What we’re seeing now in terms of vacancy rates is a leading indicator of something that’s going to continue and perhaps get worse because when someone leaves, it’s easier for the next person to leave.
At the same time, the debt on a lot of these buildings is maturing into a high-rate environment. Owners bought these buildings at pre-2019 valuations, and their debt was 3-4%. But now they’re going to have to refinance. Money is between 7% and 9%, and the assets are worth a lot less, 50-80% less.
And that’s why over 700 commercial property owners in Portland filed tax appeals last year. We can expect a wave of foreclosures – that’s just basic math and basic logic.
But it isn’t necessarily a bad thing. It doesn’t have to be a bad thing. The risk is if foreclosure is followed by a long hold.
This is when institutional distressed asset investors buy up the building and essentially wait out the cycle. The problem is that if everyone is waiting for the next cycle, the next cycle is never going to come. It’s essentially a tragedy of the commons.
Big Pink and Block 216, are very different buildings. They’re 40 years apart. One failed after decades of success, the other was dead on arrival. They represent spectacular losses – but neither was a result of incompetence. And they’re trying to teach us the same lesson, which is that they failed to adapt.
Big Pink could only be interpreted as an office building. The Ritz couldn’t get off the train tracks that it had set.
It’s tempting to write off COVID as a single exceptional moment that rocked the built environment, and it did. But thinking of it as a single, one-off event – an exception – is, I think, both naive and dangerous.
The pace of economic and social change is increasing. The magnitude of these changes is increasing, and these shocks are compounding. I read this as a paradigm shift in thinking about what the built environment is for.
I grabbed these headlines today. AI and autonomous vehicles. Data centers are now the most investable asset class that you can find in real estate. But quantum computing is about to go prime time, and when it does, all of those data centers are going to be obsolete. We need more preschools. “Downtowns as experience” is booming.
What I’m trying to demonstrate is that society and the economy are changing, and they’re going to keep changing, and they’re going to keep changing more significantly. What we had before, as an essentially cyclical process, is no longer going to hold. Society and the economy are shouting: we don’t need downtown offices.
Those low-priced office buildings are actually a remarkable asset, and the best way to think about them is adaptive urbanism.
The task of the next decade is not only to reimagine what our built environment is for, it’s also to build the capacity to continuously adapt in a faster future. Right now, our built environment – the buildings and the institutions that govern them – are not designed to run at a very fast pace.
You know this. You know that it takes years and years to examine a UGB expansion. You know that it takes years to go through permit review.
Adaptive urbanism is an approach to designing buildings and blocks and districts and the systems behind them to learn and evolve in response to changing economic, social, and environmental conditions.
Essentially, you can think about this pointing in two directions, forward and backward. Forward-facing is to design buildings fit for adaptation. Think about all the buildings that don’t get stranded, things like early 1900s warehouse buildings. These things have been industrial, they’ve been creative offices, they’ve been loft apartments, they’ve been retail on the ground floor.
I used to work at a building in Old Town called the Povey Building. It was originally a glassworks – they used to have high-heat furnaces to melt glass. Then it became a home for marketing and creative agencies. For a while, it was packaging and fulfillment for a cannabis reseller and it now has advanced manufacturing in the basement and design studios up above. Tomorrow it could be retail, or any number of things.
Old warehouse buildings can adapt because they have certain architectural features. The specs are really unglamorous: generous floor-to-floor heights, a structural grid that allows for subdivision, and structure that’s decoupled from the core.
We can design buildings this way today. A perfect example is LEVER Architecture’s building for The Schnitzer School at PSU. This is a thoroughly contemporary building and it’s designed to adapt. It has structure at the perimeter – there is no structural core. The partitions are all movable, so the building can essentially become what students need it to be in 2040 or 2050.
This building, interestingly, was even designed so that a floor could be added or removed late in the design process, because funding wasn’t certain until late in the game. Imagine if Block 216 had that kind of flexibility during design! They would have been able to modify what the building would become, as they received market signals.
LEVER’s building is ready for a faster future. I’d argue that it’s actually the lowest risk investment that you can make – flexibility is an incredible insurance policy. If I’m an investor, I want a building that holds options on many possible futures.
Adaptive urbanism is also about backward-facing adaptation. When you have a very low basis on a building, you can turn it into something else. You have some flexibility. A lot of the conversion conversation right now in Portland and in cities around the country is focused on office-to-housing, but housing is really only viable in a limited number of cases. There are many more endpoints to conversion.
I’ve already mentioned a few of them. An obsolete office building could become a perfect data center, an early childhood care facility, or a site for advanced manufacturing. It could be indoor agriculture or accessible self-storage. These are the kinds of things that society and the economy actually need right now, and all of them can become viable when you have the right low cash basis.
We’ve developed an analytical framework that we call a Conversion Friction Coefficient. This essentially quantifies the cost and the complexity of converting a specific building from a specific origin to a specific destination. It accounts for the structural system and services and envelope and regulatory dimensions, and it flattens all of that into a number between zero and one.
LEVER’s building at PSU, for example, is close to zero for most endpoints, because it can adapt. But a standard ’80s office building is close to one for housing because it’s very hard to get there. You will have structural issues, MEP issues, and so on. The conversion friction coefficient builds on Stewart Brand’s concept of pace layers. A building is composed of layers that cycle at different rates, and you want layer independence, so that something that wants to cycle fast doesn’t get constrained by something that has to cycle slowly.
A couple of specific examples. The one on your right is the Houston Post. This was a 1962 postal facility that has become a cultural and commercial hub. It was modified or reimagined by OMA. And the one on the left is Detroit’s Roosevelt Warehouse – an Albert Kahn building, actually – that is now home to Newlab, a tech startup accelerator with advanced manufacturing and creative offices.
Think of adaptive urbanism as the evolution of the built environment. Every experiment, like office to childcare or a new use for a parking garage, is like a mutation in the process of evolution. Designers are causing mutations.
You’re probably thinking: the built environment has always adapted. There is a steady vernacular process of evolution. That’s true. But what’s different today is that the pace is so much faster. What used to be a slow vernacular process that had inbuilt adjudication is now pressured to move extremely fast, and the mechanisms that typically govern the evolution – things like zoning or permitting or construction timelines or financing or even just our agreement of what makes a good building and a bad building – they weren’t built to run at the pace that they now need to run.
My view is: we should certainly speed those up. We need faster permitting. We can create new financing vehicles for conversions. We can use data to sense change as it’s happening, rather than quarterly reports from JLL. We actually have a book coming out that enumerates all those things.
But it does not say “get rid of design review.” This is the crucial question, and it’s really what I want to ask you, the Design Commission.
If the the pace of urban evolution is accelerating, what’s playing the role of natural selection? What are the fitness criteria that we’re using to decide which mutations are the right ones?
In biological evolution, natural selection makes those decisions, and it shapes the overall arc of a species as it evolves. And if we enable experiments with new building structures and uses, which, as I just described, is crucial to our city’s future, those experiments are going to create new value, and they’re going to introduce new paths in Portland’s ongoing evolution.
It’s the design commission’s job to decide which paths are most desirable. You have to ask: Value for who? What kind of city do we want? You play a vital role in the process of urban evolution.
The Design Commission’s role is to embed public value into the evolutionary process of urban adaptation over time.
Your role is more important at this moment, not less important, because the value at stake is enormous. The purpose of buildings is changing, right now. Big Pink just sold, and it will become something new. With that change, the character of downtown and the identity of downtown and the purpose of downtown is going to change.
If Design Commission leans into this role, it has to pivot from a focus on maintaining aesthetics to a focus on guiding adaptive urbanism.
Every day, designers and developers are responding to what they think society and the economy need, and you’re at the leading edge of deciding how those ideas become urban form. This is exactly what you’re already built to do, in five important ways.
The first is discretionary variance, the second is problem-solving, the third is as a public interface, the fourth is flexibility as a criterion (maybe that’s new. You aren’t already designed to do that). And then the fifth is recursive learning. I want to go through these each one by one.
Discretionary variance. I want to credit Nolan Lienhart for articulating this really well and changing how I think about it. He described how design guidelines specify goals, and then the Design Commission interprets how those goals are best satisfied.
The interpretation changes over time. His example was above ground structured parking. The design goal is to have a vibrant street front. Years ago, a sculptural screening facade was sufficient. But recently, commissioners began looking for programmed space at the facade with parking behind it.
So to quote Nolan, “The way that today’s Design Commission interprets proposals may be completely different from the interpretations of Design Commission twelve or twenty years ago. That’s the adaptation function. The rule didn’t change. Their interpretation of what created an active and vital public realm changed.”
This is the Design Commission doing its job. It’s adapting in real time without waiting for code to catch up. Discretion, in other words, is a tremendously important way for regulation to stay current – and you’re already doing that.
But it’s important to consider this role strategically. Architects and developers are coming to you with new ideas (or “mutations” in evolutionary terms), and you’re performing the fitness function. But as you do that, you can’t treat variances as one-off, single decisions. You need to think of every mutation as part of a longer evolutionary branch. That means each one of them has to test a hypothesis about the future of the public realm. How will it play a part in a longer arc of change?
The second role of design commission is as a navigator. Because these experiments are unconventional, by definition, every variation is going to run into complexities. The design commission has an opportunity to help projects work through these thorny problems that are going to arise. The built environment evolves, and so too must the internal systems of city government. As you work through conflicting code or issues raised by experiments, you can help the mechanics of city government evolve.
Let’s say someone wants to convert a parking garage into an autonomous vehicle charging depot (this is a very real question, by the way). Don’t just focus on the facade screen. Help restructure the relationships between BPS, PP&D, PGE, and PBOT. When you do that, you’re setting precedents, so that we see the right kind of infrastructure deployed in the future.
The third role is as a public interface, or a bridge. The design commission is essentially the connection point between residents and city government when it comes to the future of the built environment. That is to say, the fitness function isn’t only internal. Ideally you’re incorporating residents’ perspectives into it and continuously improving it over time. Design Commission is a public forum where residents can comment on development, and, over time, developers and architects get exposed to public values. This is where they learn what Portlanders really care about.
Crucially, this is a two-way street – you’re also sharing out. This is important because so many planning conflicts arise when trade-offs in development decisions are misunderstood, or the long-term strategies are not visible to the public. You can change that.
The fourth role is to ensure that flexibility is a criterion. So if you think back on the PSU building, this is a building that can adapt, and I believe all buildings in the future should be built to adapt. That has environmental repercussions. It means we don’t need to tear down buildings when their use is obsolete.
And it means designing for layer independence. So the space plan, for example, isn’t constrained by the structure. There are very specific architectural ways to do this. The conversion friction coefficient I described earlier gives us a shared and evidence-based language for evaluating the adaptive capacity at a building level.
Low conversion friction should become a design review criterion alongside the context and the public realm and the quality. In practice, this looks like asking a question of every project: What possible programs can this building accommodate in the future?
Finally, the most important role that I want to emphasize. If there’s one thing you take away from my presentation, it’s that the Design Commission has to enable learning.
For every discretionary variance that you allow, document why you made that choice. What hypothesis is it testing? What guardrails did you set? What were the outcomes over time, and how did the private sector respond?
The same is true of problem-solving. If you’re navigating issues one by one without incorporating solutions structurally, it’s a Sisyphean boulder. You have to solve the problems but then stabilize the solutions. It means continuously evolving public values as part of the fitness function.
If you are enabling experiments, you should be seeing a variety of outcomes. In other words, failures are inevitable – but they won’t be mistakes. If you’ve structured the experiment well, you’ve mitigated the potential risks, and you will learn.
The Design Commission’s role is to embed public value into the evolutionary process of urban adaptation over time.
Without the Design Commission, we might get faster development, we might not. We might just get institutional investors land banking downtown. We’re guaranteed to get a more chaotic process of urban evolution in the next five, ten years. The Design Commission is uniquely positioned to guide Portland’s adaptation to a new economic and social reality, and shape what the physical expression of what that is.
I do work all over the country, and I think Portland’s at the leading edge. The systemic dynamics are visible here early and clearly. And I think Portland is poised to demonstrate what post-COVID urban adaptation actually looks like. We can build and demonstrate a new model for design-driven reimagining of the built environment and the institutional framework around it.
