Developer, staff outline utility, cost and permitting barriers to middle housing in Milwaukie

Milwaukie developers and planning staff on Wednesday laid out practical obstacles that can make middle-housing projects — such as cottage clusters and small multiunit infill — hard to deliver at an affordable price.

The discussion centered on utility connection rules that can force expensive sewer-main extensions, one-off water taps and stormwater work; site-preparation costs on tight lots; and city tree and parking rules that both raise upfront costs and complicate project design.

Jamie Stangelman, a Milwaukie resident and owner of ITG Construction who described a recently completed cottage-cluster project, said the city’s utility requirements nearly made a land-division plan infeasible. Stangelman said engineers told him a sewer-main extension estimate ran “around $60,000,” and that excavation and site-preparation for an 85-by-155-foot parcel cost “about $104,000” before later citing a figure of roughly $140,000 for the overall excavation/infrastructure work. Stangelman said those costs pushed his per-unit build cost to about $200,000 before financing and profit and that land-price increases further reduce feasibility.

“I thought this is pretty cool,”…