How rising electricity demand is hurting the push for more housing in Oregon

Jessica Blakely knows to expect delays during the construction process. She’s used to planning and developing housing projects for the Salem Housing Authority, and her team plans accordingly for those delays.

But one of the projects she’s especially proud of — a modern-style apartment complex that mostly serves Oregonians who previously experienced homelessness — almost missed its opening day.

The reason surprised Blakely: a potential monthslong delay in acquiring equipment needed to connect the buildings to the power grid.

“We understood it could be an 18-month lead time,” Blakely said.

So, before even breaking ground, they ordered the electrical equipment. The 60-unit housing project needed a box for each building, with meters for every apartment and wiring to help connect to the electric grid.

On the day in November 2023 when it was supposed to arrive, Blakely’s team got a notification that the equipment wouldn’t ship for another four months.

Housing providers across the state are reporting similar snags. Delays and amended timelines are par for the course in the construction industry, but in recent years it’s been especially challenging to get the pieces of equipment needed to connect apartments and clusters of homes to the larger electricity system.

The delays come as Oregon is in dire need of more homes. Lack of affordable housing is the largest contributor to the startling number of people experiencing homelessness in the state. Gov. Tina Kotek set an ambitious goal of building 36,000 new homes a year when she took office. The state’s latest budget includes more than $350 million to address the housing and homelessness crisis.

Related: How homelessness in Oregon started, grew and became a statewide crisis

Meanwhile, developers point to the numerous delays they face, from long wait times for permits to challenges with funding, as barriers to building more housing. These problems are compounded when crucial equipment is significantly delayed.

Electrical manufacturing experts say the reason it’s so hard to get electrical equipment is, at the core, a basic supply and demand imbalance: the push to electrify everything from heavy industry to transportation is rapidly driving up the demand for equipment used to connect to the power grid. Suppliers can’t make and distribute the equipment fast enough to keep up.

Risks and costs of long delays

In the housing world, the pieces of necessary electrical equipment go by a variety of names: meter box, electrical box, power pack, shutoff, meter pack, and so on. People across the nonprofit and for-profit building industry — including engineers, electricians, architects, contractors, and utilities — tell a similar story: that the equipment to connect homes and apartments to the grid has been hard to come by. It shows up eventually, but in some cases projects are waiting one to three years for the correct equipment.

Whether the housing developer is a for-profit company or a nonprofit, delays cost money.

At Sequoia Crossings, the Salem Housing Authority project, a delayed opening could have threatened to bankrupt the complex before it ever got to serve residents.

Blakely said the apartments are geared towards Oregonians who would benefit from having access to social services on site. Rent is capped at 30% of the resident’s income, which has to be under $39,000 annually to qualify to live at Sequoia Crossings. The project’s funding is mostly from grants and subsidies that could disappear if a housing project doesn’t open close to its target date.

Blakely was feeling pretty good about how far in advance they ordered the equipment. And because the housing authority would be covering the cost of utilities for each apartment, the equipment wasn’t as complicated as what they need for other developments.

“All we needed was the power supply pack for each one of the residential buildings, all in one box,” She recalls. “They weren’t individually metered, so we thought, ‘Hey, piece of cake, this one’s going to be the easy one. It’s not one of our complex buildings. It should be a slam dunk.’”

Related: Lawmakers approve Gov. Tina Kotek’s top priority for the session; funding expected to ease Oregon housing crisis

Instead, they learned the power supply packs might not show up until after they were hoping to open the building to residents.

“So, we panicked.”

That’s how Blakely found herself talking with U.S. Rep. Andrea Salinas, D-Salem, about power packs. The Democrat represents a swath of Oregon from Tigard to Salem, and was visiting the construction site for a planned Veterans Day tour when Blakely mentioned their problem with electrical equipment. Salinas’ staff started making calls to see if they could help.

“They say I give them too much credit,” Blakely said. “But I cannot tell you what magic wand they swung. They had called and rallied enough people to find a power supply pack in the back of a warehouse across the country, for which our contractors got in a truck, drove over, picked it up, got it back, and delivered it on the timeline that we had originally anticipated — so we were able to open the building on time, thankfully.”

It feels like a supply problem — but it’s not exactly

Blakely wondered if there was a problem with supply: that, perhaps, somewhere along the line, a crucial manufacturer had shut down, or there was a problem getting a certain component from another country.

However, experts say there hasn’t been a downturn in production. Instead, they point out a rapid rise in demand is making it harder for housing projects like the one in Salem to get equipment on time.

Spencer Pederson is the senior vice president for public affairs at the National Electrical Manufacturers Association. The Washington D.C.-based trade group represents nearly 400 electrical manufacturers across the country.

Pederson said company leaders are telling him they’re the busiest they’ve ever been.

One CEO told him, “electricity has only been really exciting twice in history, once when it was first invented — and now,” Pederson recounts. “So that should give you an idea of the amount of activity in the industry.”

The rapid rise in electricity demand is a confluence of things, he said. On the consumer side, the pandemic saw a rise in home renovation projects. Also, there’s been a continued ramp-up of electric car demand, triggering demand for home charging stations and roadside equipment — all of which needs to be hooked into the grid.

Pederson said those things were already pushing up demand when the U.S. passed two landmark pieces of legislation: the bipartisan infrastructure law and the Inflation Reduction Act, both jampacked with federal dollars to help move the country away from fossil fuels. That means switching things like heavy machinery and industrial operations to electricity.

And if that wasn’t enough, Pederson said the rise in electricity demand for large data centers is pushing up demand for both electricity and electrical equipment needed to power and cool the concentrated mass of computers. Oregon has a number of such centers holding information for Google, Facebook, Instagram and others.

“A lot of those products that are going into some of the larger multi-family housing complexes are the same products that are going into just new home construction and in data centers,” Pederson said. “And so there’s just a very unusual demand right now for many of these products.”

Pederson said these delays touch every part of the construction industry, including nonprofit builders like housing authorities, large corporate builders and local development companies.

Uncertainty, delays flummox for-profit builders

Jessie Dhillon is the vice president and co-owner of Portland-based Carla Properties. It’s a family-run company founded in the 1960s, although Dhillon laughs while saying she’s the first person from outside the family to join the Carla Properties leadership team.

Dhillon said the company manages more than 2,000 apartments at over a dozen properties across the Portland metro area. Its newest development is a 162-unit apartment building in Troutdale. It was supposed to open in June 2023.

“It didn’t quite work out that way,” Dhillon told OPB.

Her crew expected the needed electrical equipment to arrive in April 2023.

Dhillon said they got a notification in April that the equipment wouldn’t arrive until June, the intended opening month.

“There’s so many things that happen between the time that we get power and somebody gets to move in,” Dhillon said. “When we get power inside these buildings, we can now finish our drywall, and the mud and tape will stick. We can do all of our finished carpentry work.”

It meant until the power was brought to the building, the apartments sat 85% done.

“And then, the equipment wasn’t coming in until July,” Dhillon recalls. “And then, the equipment wasn’t coming in until September. And then, October, and in the beginning of October, we were promised that the equipment was on a truck and it was going to be delivered. Come November, we heard nothing and we didn’t get the equipment.”

Similar to the Salem Housing Authority, the folks at Carla Properties started calling friends in the industry across the country. Dhillon estimates they reached out to 10 different sources and couldn’t find the needed material in a warehouse anywhere.

Then, like magic, one day in December — six months after Dhillon had hoped to rent out the first apartment — all the needed electrical equipment showed up.

“Our electricians and our staff worked like crazy to put these big shutoff switches on the ends of the buildings and put the meters in and call for electrical permits and call for inspections,” Dhillon said. “They worked really, really hard to get everything up and running.”

The first building in the complex opened in the middle of March 2024, nearly 10 months after its planned debut.

“Electrical equipment was the biggest delay in this entire project,” Dhillon said.

Dhillon said it’s well known in the housing industry that electrical equipment is hard to come by quickly, but her experience in Troutdale shows it’s exceeding the generous wiggle room most contractors build into timelines.

Longer timelines, she said, drives up costs.

Back at the Salem Housing Authority development, Blakely doesn’t anticipate starting construction on anything new until at least 2026 — and only if constraints in getting electrical equipment ease. She’s worried commercial builders could make the same choice, slowing the production of needed housing and further exacerbating the current crisis.

“There’s housing needs at every level,” Blakely said. “This could potentially become a federal issue — and I hope they hear it, and I hope they help, because I believe there is a solution. I just don’t know what that is right now.”