(Data: Census Bureau, summarized here)
After eight years of failing to add housing units nearly as fast as new residents were arriving, Multnomah County nearly kept pace in 2014, according to Census estimates released Thursday.
The shortfall in new units since 2005 has led to the country’s worst chronic shortage of rental housing in the most desirable parts of Portland as residents have competed for the largely unchanging number of homes in the central city. That’s led to rocketing home prices and rents, forcing many to live in less bikeable areas further from the urban core.
In 2014, a wave of new apartments hit the market and the City of Portland has led the region in both single-family and multifamily housing starts. The population still grew faster than the number of housing units, the Census estimated, but by a much smaller margin.
The population of Multnomah County grew 1.4 percent, the new Census figures showed, while the housing supply grew 0.9 percent.
Even so, the shortfall in new housing construction that began in 2006 — for example, Multnomah County added an estimated 10,709 residents in 2011 but just 534 net new homes — has left a deep backlog in the housing market that would require construction far faster than today’s to erase.
“I would argue that it’s vital that we keep building — if we don’t, Portland’s affordability problem will worsen.”
— urban economist Joe Cortright, City Observatory
Still, major developments like those going up in Northwest Portland, the Burnside Bridgehead, Lloyd District and North Williams Avenue are signs that at least for the moment, Portland’s rock-bottom rental vacancy rates (once again the lowest in the country in the first quarter of 2015, the Census estimates) have lured out-of-town investors to capitalize on central Portland’s housing shortage.
“Supply is responding to increasing demand,” economist Joe Cortright of the Portland-based urban policy think tank City Observatory said in an email Wednesday. “This is essential if we are to make any progress in addressing the declining vacancy rate and slowing the increase in rents. I would argue that it’s vital that we keep building — if we don’t, Portland’s affordability problem will worsen.”
Jerry Johnson, owner of research and consulting firm Johnson Economics, said that the metro area currently has 79 major projects with 8,140 units in construction, half in Portland and half in surrounding cities. That’s less than half of the 20,000 units that would be required in Multnomah County alone to return to 2005’s ratio of population to housing.
Still, Johnson predicted that developers will eventually overbuild.
“The housing market is complicated, but it’s fairly predictable,” he said. “Clearly the supply is on the way that is going to ameliorate this issue. … Eventually the market always overbuilds itself. That’s what’s happened. The market will overbuild and they will crush the rents and everything will become affordable again.”
“Not actually affordable,” he added. “It never goes back down all the way.”
Johnson noted that population isn’t always the same as housing demand, and also that as prices rise, fewer people in a city tend to own their own homes and more decide to make do with less space.
“If you can’t get out of your mom and dad’s basement, that’s one household that would have traditionally been two,” he said.
I asked Johnson whether he thought a political backlash against urban construction, similar to the backlash against rural construction that led in the 1970s to Portland’s urban growth boundary, could interfere with the usual business cycle. He said that such efforts would be counterproductive.
“What you want them to do is to overbuild the market, which they’re prone to do,” he said. “But I get what the neighbors are saying, too. They’re thinking super-local. Like all of us, really. … Everybody’s, I think, thinking pretty rationally in this. It’s just these are difficult things to solve.”
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“it’s just these are difficult things to solve.”
Ain’t that the truth.
especially if we, predictably, only talk about one half of this situation.
“the shortfall in new housing construction”
…. or a longage of people. There is no rule against viewing this from both sides, folks.
That’s what I find fascinating, that some people who are the first to crap all over models that show an increase in auto traffic over future decades, can be just as likely to believe models and predictions that the population will keep exploding for decades in this city.
Not saying we shouldn’t have some plans for the future, but they are just predictions.
Would you mind unpacking that a little, dave? I’m not quite following. I don’t know if you had me in mind, but I don’t think either automobile use or fecundity will continue to increase going forward (notwithstanding what models may show), but that is rather different than what I was lamenting, which is that all we ever seem able to talk about on this subject is the supply shortfall without any acknowledgement of the other dimensions of this ‘problem.’ Just because it is easier, safer, less likely to ruffle someone’s feathers to avoid discussing population growth in its many forms doesn’t mean we can afford to pretend this doesn’t concern us, that only talking about supply is somehow adequate.
Just saying I don’t really have faith in almost any predictions for 20-30 years in the future, whether they be about the Portland population, Portland traffic, or the housing market.
We agree then. But I wasn’t talking about predictions; I was talking about our present inability to speak forthrightly about more than one angle of this problem. Your comment was (apparently) a response to mine, so I was unclear.
I am interpreting you are talking about population control?
Is that right?
I am talking about the problem of predictably lopsided discussions of this subject. Without acknowledging the need to wrestle with how we end up with so much demand for extra, additional housing we’re never going to get ahead of this dilemma.
Population control, questioning the unquestioned pursuit of growth in all things (people, consumption, square footage, economic output, burning of fossil fuels, etc.), subsidies to growth, incentives to move here…. these are all dimensions of this problem I’ve raised in similar conversations here in the past. They all contribute to this mismatch, but we tend not to acknowledge any of this and instead just look at the sundry pressures that *keep the supply of housing from growing even faster.*
Thanks for asking.
Preventing building is what you’re suggesting and it isn’t a solution. It will price people out of the city. The opposite of equitable policy.
No, Jeg, that is not what I’m suggesting. Why do you persist in this kind of glib distortion, this simplification of other people’s points of view in this discussion? We’ve been down this road before and it wasn’t particularly insightful the last time you tried to pigeonhole me.
Claiming that we should consider the other side which would encourage sprawl and ecosystem degradation is something I will never acquiesce to.
I reject your persistent strong arming the conversation into only two positions, with no overlap, no gray, no allowance for your interlocutor to see the world differently than you do. Do you even hear us when we try to suggest to you in these conversations that the world is a little more shaded, that someone else’s perspective should not be so glibly dismissed?
That’s like standing in the middle of a flash flood and saying, got a towel? We have a flash flood of demand. We must build faster than we currently are. Rents are spiraling out of control.
You are the sinister call to center when we are in an emergency that calls for big measures of adding housing.
“That’s like standing in the middle of a flash flood and saying, got a towel? We have a flash flood of demand. We must build faster than we currently are. Rents are spiraling out of control.
You are the sinister call to center when we are in an emergency that calls for big measures of adding housing.”
To use your own analogy, what 9watts is trying to ask is how do we stem the flood, instead of just trying to widen the river to accommodate an ever increasing volume of water? I believe he is right to take more than a one dimensional approach here.
…so the obvious solution is either a holocaust, or location-based housing permits like China does. Ie, you are permitted to live in a specific city, and would be illegal to move somewhere else.
Or, you know, actually building and inclusionary zoning with linkage fees, and maintaining our UGB to protect wilderness and farm.
Thanks, but those are pretty clearly not our only options, but snark is a predictable response to someone who suggests we address a topic which has the potential for drifting into territory some would rather not talk about. Your discomfort, however, doesn’t remove the need to face this particular music.
One thing our society rarely talks about is the choice of how many children to have. Sure you aren’t going to solve today’s housing crunch, but the housing crunch 20 years from now is almost entirely in your control….not to mention most other serious global problems.
Huh. I’ve never heard that word 🙂
It’s a measure of how long it takes you to ride one mile.
“If you can’t get out of your mom and dad’s basement, that’s one household that would have traditionally been two,” he said.
According to the PHB that person in the basement is considered “shacking up” and is considered in a way “homeless.” So, for those of you that don’t understand the definition of homeless, there you are. There is one example. Anyone sleeping on a couch or in a place that’s not considered generally habitable by people. So if it’s not traditionally a bedroom by real estate standards, (meaning a room with a closet) they can be considered displaced.
Coalition for a Livable Future just came out with their Equity Atlas this year which gives a great visualization of how overpriced the housing system is here and how great the need of mixed-used systems and community land trusts are.
The ED of Center for Intercultural Exchange came and spoke with my team yesterday and mentioned that the last apartment he was in here; in 2 years raised rent 45%. That is asinine.
I don’t know where you have your numbers. The numbers we have in our housing dept are that Mult Co’s rental vacancies are at less than 3% and have been holding steady there for a while. And with no growth in subsidized and affordable housing, forgetaboutit.
For years, I was about as “stacked up” as you can get… but I wasn’t homeless.
They can overbuild the market I’m beginning to lose faith that hundreds of new $1500 luxury studios and $2k+ 1BRs in buildings with community kegerators and rooftop lounges will have a net positive effect for renters.
What it means for bicycling is less certain. Will people move to keep their cars or ditch their cars to make rent?
These apartments are “luxury” only by name. Most of them have no central heat/air, instead opting for wall units in each room, and they’re tiny with finishing that “looks nice” but will probably fall apart easily in the years to come. They build them cheap and offer them at “luxury” prices.
That is my concern…most of what they are throwing up in this boom will begin to deteriorate in less than 20 years.
Bam! Affordable housing. Isn’t that what we want?
Buildings are much more durable now. This is a common biased point of view that is completely wrong.
That’s a complete generalization. Come walk around my neighborhood, look at the junk mega-mansions Renaissance Homes, Peter Kusyk and Guy Bryant and their ilk have put up and compare it to the 100 year old houses they demolished. My 105 year old house is in better shape than the lot sprawler a Vegas developer built next door 10 years ago, with its sagging siding, rotting unsealed rafter ends and peeling paint.
If, as cyclists, we are concerned with preserving the environment and our city’s livability and affordability, we should be opposing the massive waste and pollution associated with much of the development going on in Portland neighborhoods. Replacing an affordable older home with a $1m OSB mansion helps no one but the developer’s bottom line. This is an investor fueled gold rush; the social, cultural, and environmental impacts will be no different than in 1850.
I’m going to have to call bull. A lot of Portland housing stock was kit housing through somewhere like Sears. Many of these houses are leaky as hell when it comes to heating and efficiency. New construction will always be better long term except if it reduces density of housing/population.
“New construction will always be better long term”
You are talking through your hat, Jeg. fredlf generally talks sense here, especially on this subject. I would suggest listening to what he’s saying before shooting back. I too know a few things about old houses and new. And your claim is utterly without basis. For starters I’d recommend reading anything by Joe Lstiburek. Houses today are built to very specific tolerances (specifically related to indoor comfort, so defined) but not for longevity. I challenge you to point to any reputable source that claims otherwise. The materials (second growth studs, OSB, building papers, caulk, asphalt, hardiboard, MDF) and assemblies (vinyl windows, ducting) are only barely good enough to pass code. Assembled as they are by low paid workers who are penalized if they take any extra time to accomplish a task, the results are predictable. I have been going through dumpsters at construction sites all my life. You learn lots that way.
You are not proving anything. Housing built to better modern specifications will live longer. And older houses are MUCH less efficient on average.
“Housing built to better modern specifications will live longer. And older houses are MUCH less efficient on average.”
Again you are skipping over all the important distinctions I tried to introduce above. Efficient, something you mention here a lot, tells us *nothing* about how durable the house is. An airtight house may be more comfortable (something we tell ourselves we value highly these days) and that is may be worth the extra cost, but this comfort requires techniques and materials and assemblies that are very finicky, ever changing, and these require attention and knowledge on the part of the builder that they may, or may not possess or be paid to take the time to deploy.
We can get into more nuances of building techniques, codes, materials, but you seem utterly uninterested in learning anything from others in these discussion, so I’m going to skip it.
Quote, Maccoinnich, below: “I do a lot of work on older homes, and it’s nothing but romantic fiction to pretend there was some golden age of construction about 100 years ago and everything built since then is terrible. I regularly see floor systems sagging by a matter of inches because the joists are way undersized for the span. The framing is usually barely attached to the concrete, if at all, which means that in an earthquake the house will slide right off its foundation. Many of the beautiful brick apartments in NW have floor joists ledgered to unreinforced brick walls, a construction detail that’s guaranteed to kill people in an earthquake. Most of the houses in the West Hills are built on shallow strip foundations, with nothing to hold them in place in a landslide. Older houses are often uninsulated, and leak energy. Due to the high fire risk modern electrical codes prohibit the installation of knob and tube wiring, but there’s nothing requiring its removal except during renovations. Lead based paint was common until the 1970s, and poses a serious health risk that few people seem to be aware of.”
I do a lot of work on older homes, and it’s nothing but romantic fiction to pretend there was some golden age of construction about 100 years ago and everything built since then is terrible. I regularly see floor systems sagging by a matter of inches because the joists are way undersized for the span. The framing is usually barely attached to the concrete, if at all, which means that in an earthquake the house will slide right off its foundation. Many of the beautiful brick apartments in NW have floor joists ledgered to unreinforced brick walls, a construction detail that’s guaranteed to kill people in an earthquake. Most of the houses in the West Hills are built on shallow strip foundations, with nothing to hold them in place in a landslide. Older houses are often uninsulated, and leak energy. Due to the high fire risk modern electrical codes prohibit the installation of knob and tube wiring, but there’s nothing requiring its removal except during renovations. Lead based paint was common until the 1970s, and poses a serious health risk that few people seem to be aware of.
Holy crap, this. It’s delusion that people claim old houses are better than new and razing old ones to replace with new stock can actually be better for us long-term!
what you say is all true, but the quirks of old house construction is a separate and parallel discussion to the one about longevity, durability that fredlf started. 100-yr old houses have plenty of issues, to be sure, but crappy materials and short life spans are two things you can’t pin on them (Jeg’s shrill proclamations notwithstanding). That is all some of us were trying to say.
“what you say is all true, but the quirks of old house construction is a separate and parallel discussion to the one about longevity, durability that fredlf started. ”
Not true. Better materials, better practices today. This is an ongoing fallacy that isn’t based in reality that new houses will last for a shorter time.
The things I listed aren’t “quirks”. Many of them are things that can and will kill people. Portland hasn’t experienced a major earthquake in the time it has existed as a city. When it does happen, I hope that I’m in a newly constructed building and not some turn of the century mansion in the West Hills.
“The things I listed aren’t “quirks”. Many of them are things that can and will kill people.”
I get that. I’m all about earthquake retrofitting. But you are implying that today’s houses, being so much better, won’t kill people at the rates that these older, terrible houses would/might. I don’t think we know enough to say that.
But, as I said above, we were not arguing about safety, or efficiency, or setbacks, or gentrification; we were arguing about longevity. You may not find that dimension of our old/new housing stock as interesting, but I stand by my statements that on that dimension ~century old houses win, hands down.
I’m not implying that buildings built to current codes are less likely than older buildings to kill people in the event of a natural disaster; I’m quite explicitly stating it. We do know that, and to pretend otherwise is not that different from claiming that we don’t know if vaccines work.
Actually as someone who had gotten to pay to have a house jacked up so the crumbling foundation could be replaced, cement is one thing that has come a long way in 100 years. Anything built to current code is going to come out a lot better in an earthquake that is for sure. Especially if no one has gone back and strapped the building to the foundation, of course when I attempted to do that was when it became apparent that parts of my homes foundation were’t solid enough to strap to.
Multi-residential developers are going the design-build route in Portland, which speeds project timelines and saves money (on architects and engineers). I work in the A/E/C field and colleagues have noted the trend. This may not = bad construction, but it’s a bit worrisome—esp. as human nature leads most folks to want to make a buck, above all, and we’re in a particularly frenzied and avaricious time in Portland, re: housing. Time will tell, I guess.
This is manufacturer-related, but several high-end condo buildings wound up with serious plumbing/flooding problems and sued (resolved only recently): http://www.oregonlive.com/business/index.ssf/2015/01/plumbing_supplier_victaulic_co.html
Luxury is a subjective thing. I compare it to my former 100yo apartment.
Four-story walkup vs. fob entrances w/ elevator.
Designed for delivery to iceboxes vs. dishwashers.
Laundry room with a pool table vs. in-unit laundry and community spaces.
Utility room with hooks drilled into the wall vs. bike rooms.
That place was simple, but certainly not a dump.
Developers aren’t dumb, they want to earn their money back ASAP before the units fall apart. Hence, “luxury” marketing.
However, at least the buildings are structurally sound, having modern plumbing, heating, electrical, appliances, have modern windows and don’t leak, which is more than I can say for most of the houses and apartments I’ve been inside in Portland!!!
Oregon has been one of the only states in the Union to have inclusionary zoning (mandated % of new units offered at below market rate) made illegal (along with Texas). We as a city do not seem to fully understand how urgent our need is to create/ protect a mixed income city.
I moved from SF 7 years ago for one reason: I could rent in a location that is a 3 mile bike ride to work down town AND have money left over every month to save for a house. My household income is almost 100K nowadays and there is no way we would decide to pay the rents in any of the apartments getting put up around town within 3 miles of downtown now.
Portland also has no rent control laws (WTF Portland?). I know 3 friends who have had their monthly rent hiked up 200 dollars THIS YEAR. Two have moved further out; one has stopped biking. Meanwhile the neighborhoods I felt comfortable in are no longer affordable for the artists/ old Portland that make this place great.
If Portland is going to stay interesting, it needs to build more affordable housing and bring on some long-overdue rent control laws. From what I can see, simply trusting for an increase in supply to solve our affordability challenges is a little naive.
Rent control has failed miserably at keeping San Francisco an affordable city. What makes you think its effects would be different here?
Rent control in San Francisco has worked marvelously at ensuring people aren’t forced out of their homes because of skyrocketing rents. I know a woman in her early 60’s who has lived in the same apartment in Noe Valley for almost 40 years. She makes 35K a year. Rent control is why so many of my friends who arrive in San Francisco before the dotcom boom can still live there. Of course, if SF dropped rent control they’d all move to Portland…
Sure, rent control is very nice for the few people who happen to benefit from it. At a citywide scale is fails miserably at ensuring affordability. You can’t seriously be arguing that you’d prefer that Portland had San Francisco’s housing market?
So I googled it:
…and learned it is way more complicated than I thought.
We need sliding scale inflation adjusted increases in rent control units tailored to a specific person’s income. There could be various types zoned in every development bigger than a minimum number of units. This would be myvh more flexible rent control that wont completely screw over landlords and will help tenants. We can then also focus on minimum wage and labor issues to fill the gap. Inclusionary zoning with linkage fees works. See:http://www.theurbanist.org/2015/05/07/why-urbanists-must-support-linkage-fees-and-inclusioinary-zoning-a-scalable-policy-for-affordable-neighborhoods-in-seattle/
Rent control does not work. “Sliding scale inflation-adjusted increases” is trying to put lipstick on rent control to make it sound good.
Rent control has failed everywhere it has been tried. It only benefits long-term tenants at the expense of everyone else.
Oregon is also a “tenant-at-will” state, meaning your lease can be non-renewed for any reason other than protected classes of people. Institute rent control and landlords will simply not renew their tenant’s lease when they want to raise the rent.
Rent control is bad for everyone, and it’s a huge disincentive to owning a rental property. It’s a garbage, Marxist idea that should stay in California and not be tried here.
Those are some nice, angry opinions that I completely disagree with.
You are entitled to be wrong when the facts are not convenient for you.
Fortunately, the state or Oregon prohibits municipalities from enacting rent-control ordinances.
Hopefully, not for long. I have been bugging my representatives to approve inclusionary zoning with linkage fees for rentals, not just sales. They seem very receptive.
You are the one who seems to be skewing reality with red scare mumbo jumbo.
Rent control doesn’t always benefit long-term residents, either. If rents are held artificially low, landlords will do the bare minimum maintenance and upkeep in the hopes that the resident will leave, so a new, higher paying tenant can move in. Rents are low, but the squalor factor can be high.
Which is why sliding scale and adjustment with inflation each year foxes the issues you just claimed. It allows owners to keep up with properties while the subsidy can continue. It is more moderate for both sides.
It is at best a partial fix — if the subsidy is being paid by the landlord (by accepting below-market rent), then they have all the incentive in the world to get their subsidized tenant out, and get a new one that resets the “subsidy clock”.
Not if it’s a locked in place regulation. It’s merely the cost of entry to being a landlord. You can only ever use that unit as subsidized for a certain low or middle income subset. Eviction won’t give them more money.
jeg: I suggest you become a landlord and see if you can break even following your notions of what is fair. I wasn’t very successful and bailed out. Too much work, too many headaches, too little return on my assets. Good luck to you.
The greater societal good is more important. We don’t keep failing small businesses afloat just because.
@Jeg — elsewhere you argue for building more rental units to relieve demand, but what you are suggesting here will have the opposite effect. Who would ever build rental units if such a policy were in place?
Inclusionary zoning with linkage fees does not stifle development. See: http://www.theurbanist.org/2015/05/07/why-urbanists-must-support-linkage-fees-and-inclusioinary-zoning-a-scalable-policy-for-affordable-neighborhoods-in-seattle/
Rent control is a horrible, horrible idea.
I like what I think I know about it. It encourages people to stay put, for one. That’s not a bad thing at all. I read the piece excoriating it linked above and wasn’t particularly impressed. That article also treats exponentially increasing demand for housing as exogenous. That to me is the problem that needs some attention. Saying that rent control is horrible while remaining silent on where demand for ever more housing comes from is inadequate to say the least.
Finally closed on a house close-in, but are now facing the reality we can’t rent-out our condo in the Pearl due to HOA backlog wait-list restrictions and are forced to sell. So what’s largely considered not long-term (10 year) housing in Portland, will be on the market for $300k. The unit would have been rented at $1,200-$1,400.
Yes, the apts & condos fill a niche, but are tough fits for active families. I’m not saying (new) Portlanders will adapt. Just given the lack of vacant lots, homes (even small ones) with yards, garages, and basements will continue to be out-of-reach for many.
That sounds more like a problem with private HOA restrictions rather than public policy. Is the city requiring the restriction that only a limited number of units are allowed to be rentals?
Well the, city isn’t, but lenders and FHA are. To be eligible for lower down payment FHA loan, the condo must have a cap on the percent of rented units. I’m not necessarily saying its a bad requirement, but it is definitely a direct result of public policy.
Thanks for the insight 🙂
Nick is right. It’s FHA ultimately driving HOAs to implement the policy. I should have noted.
The cap helps to prevent investor-owned units driving a massive investor-driven speculative real estate market, like you see in places like Miami. It makes affordability even worse.
My condo building didn’t have any rental caps and was 50% rentals. One of the units just sold with a bank loan. True it does prevent some types of government loans but in this case, the bank just required the buyer to put 10% down instead of 5%. That is probably better for them in the long term anyway. I think Condo Associations fear that it would be much more difficult or impossible to get a loan when that is not the case today.
The other reason for those restrictions is because the Condo Associations think renters would treat the building with less respect than owners would and move more frequently.
No argument generally with what you’re saying, but the conflation of “home” with both “ownership” and “house” bothers me. Not piling on you personally here – it’s a very common piece of unconscious messaging, and I’m pretty sure the realty industry is to blame.
I rented for 25 years, 21 of them in apartments, and the last 4 in the crummy little house I was finally, in my mid forties, able to buy. Those places, no matter how little respect landlords, banks, credit agencies, and the general economy might have felt towards them, were home to me.
The idea that to be a full and respected American citizen anywhere outside of New York City, one has to own real estate (and the fewer shared walls the better), is a huge part of the sprawl problem cities are now so desperate to correct.
This is where the Federal policies really create a problem. By allowing homeowners to write off mortgage interest, and providing FHA loans for certain borrowers, the game is totally stacked in favor of home ownership. I have friends that have used FHA loans to buy multi-plexes, evict the residents, remodel them, and then jack up the rent. Is this the type of thing we want to be subsidizing?
Some of lower value loans (talking < $175K) (some of which are more likely to be FHA) often don't generate enough interest for the taxpayer to claim them at an advantage over the standard deduction.
I know we were in that boat the first couple of years, until we had more things to itemize.
So not all homeowners will deduct their mortgage interest.
Also as a side note, the line item deduction of mortgage interest payment is a far cry from a write-off. It represents a percentage, based on your mortgage’s amortization table, of the money you pay for housing to be deducted from your income, assuming that along with other itemizations it is still less than your standard deduction. It is by no means a tax credit and does not guarantee a refund. Furthermore, the longer one lives in the home and pays the mortgage, the more unfavorable the amortization table swings against the interest deduction, since the proportion of your mortgage payment that goes to paying principal instead of interest increases over the life of the loan. The real advantage of a fixed rate mortgage (of which most FHA loans are), especially in the given market of skyrocketing rents, is a stable monthly housing payment. Of course that depends on investing in the property when prices are lower, which at this point was about five years ago. Real estate in this city is about on par now with the level it was in 2008 when the bubble burst.
I can’t speak to the anecdotal “friends” who used FHA loans to take the rather unethical actions described above, but my understanding is that they are only available to first-time home buyers, and that the rules on them have been tightened even since I bought in 2010. It’s also violation of IRS tax code to claim mortgage interest deduction on a property that is not your primary residence. The real subsidy given to landlords comes in the form of property depreciation claims, in which a portion of the assessed value of the property can be deducted yearly – an amount which is likely _greater_ than annual mortgage interest payments. Here is a brief, simplified explanation:
While I agree that mortgage interest deduction does provide a small incentive to buy vs renting, keep in mind that homeowners are also fully responsible for the costs and time of maintenance to their property, as well as utilities which are generally covered by landlords for their tenants, such as water (which is increasingly expensive) and garbage. And with the 203(k) provision available on FHA loans, it allows older houses that don’t meet HUD livability standards to be remodeled and left in the hands of individual owners rather than going as cash sales for flippers or developers.
Eh. More like the game is stacked in favor of investing in homes. We bought because ultimately it’s a better wager than the rental market — especially when desiring storage for river craft and bikes (passions).
Regardless: Portland isn’t building family housing, resulting in families moving to the ‘burbs (nothing new). The rise of Williams, Division, North Pearl, still serve a very precise (already over-served) demographic.
How can you claim that demographic is over-served? Housing prices in those neighborhoods would seem to indicate that the market is under-served.
You’re right Chris. There should be a cap to how much mortgage interest can be deducted and no interest for second homes should be deducted. It’s unfair to get a tax break for taking out a $600,000 mortgage but not be able to deduct the interest on a $150,000 mortgage (because the interest might be smaller than the standard deduction). It’s one of the confusing parts of our tax system that favors the rich.
I wonder whether Portland really has the jobs to support the influx of people and the increasing rents. It seems that employers pay less than in other West Coast cities, yet the price of housing is really high. Is there really a gap between income potential and housing prices, or is that just my erroneous perception?
The Baby Boomer generation sold their children and grandchildren down the river. The only way anyone under 40 earning a standard wage (BS not MBA), can afford a home in a bikable part of PDX (or any west coast city) is if they are given a huge chunk of money for down payment (30% or more)from their wealthy parents, AND have TWO full time incomes with NO children.
It’s maybe headed that way, but it isn’t that way right now (although “bike able” is a relative term for everyone), and definitely wasn’t that way even 2-5 years ago.
To me it’s more a geographical thing… things are getting very tight in Portland, true, but there are plenty of other cities where housing is cheap. Prices are going up in Portland because it is a great place to live, and it is attracting lots of newcomers. Portland was much less expensive when it was not such a great place to be.
At some point, attention will turn elsewhere, and the draw of a low cost of living will start attracting the next generation of artists/restaurateurs/musicians, which will help that next city become a great place to live. Maybe in 20 years, people on bikedetroit.org will be complaining about how hard it’s become to buy a house for under $30K.
Who knows what Portland will look like when the trend turns to somewhere else.
“The only way anyone under 40 earning a standard wage (BS not MBA), can afford a home in a bikable part of PDX (or any west coast city) is if they are given a huge chunk of money for down payment (30% or more)from their wealthy parents, AND have TWO full time incomes with NO children.”
I too am going to disagree. I have a friend who is undocumented. He has a wife and two kids. He works hard. He saved up 80% of the cost of a new house but the bank wouldn’t give him a loan (two months ago) for the balance because he was undocumented. No rich parents; no two incomes. It is called saving (and having modest expectations). I know it isn’t easy, but it can be done. And to suggest otherwise does everyone a disservice.
Does your friend commute by bike or public transit? Your friend purchased a home in what neighborhood? Maywood Park? Sure, if you purchase a home where low/no-car use is NOT POSSIBLE, then it can be really affordable.
Does your “undocumented” friend pay income taxes? Many people would love to have an extra 35% of income not be sequestered by the state and federal governments that could then be added to down payment savings.
Just saying you disagree because you know one person who may or may not pay the same (or any) taxes, and may drive his car 10 miles to work does not invalidate the absurd upswing in west coast real estate prices since 1996.
“Does your friend commute by bike or public transit?”
He drives everywhere.
“Your friend purchased a home in what neighborhood? Maywood Park? Sure, if you purchase a home where low/no-car use is NOT POSSIBLE, then it can be really affordable.”
A short hop from downtown Salem. Definitely bikeable. We’re loaning him the balance.
“Does your ‘undocumented’ friend pay income taxes? Many people would love to have an extra 35% of income not be sequestered by the state and federal governments that could then be added to down payment savings.”
You bet he does. And social security, which he’ll likely never get back.
“Just saying you disagree because you know one person who may or may not pay the same (or any) taxes, and may drive his car 10 miles to work does not invalidate the absurd upswing in west coast real estate prices since 1996.”
You are correct, J4son. Perhaps I overstated my case. I was just blown away by the fact that he accomplished this under those circumstances, and it struck me that we don’t hear enough of these counter examples.
9watts, you seem like a really nice person and I appreciate nearly all of your comments. However, if you want to increase the number of people who commute by car, then keep repeating that Portland housing is affordable. Frankly, if my generation is forced to choose between EVER owning a home and low/no-car use, then owning a home will win every time.
Renting absent of taboo “rent control,” will NEVER be a long term living solution, for anyone.
“if you want to increase the number of people who commute by car, then keep repeating that Portland housing is affordable. Frankly, if my generation is forced to choose between EVER owning a home and low/no-car use, then owning a home will win every time.”
I didn’t mean to say that Portland housing is affordable. I think it is absurd what has happened to prices, generally. My point was (supposed to be) that if one is frugal, lucky, clever there are ways to make it work without big checks from Dad.
Right here, right now housing prices in the inner Eastside where I live are absurd, or at least the ones I see going up for sale. I don’t follow the market at all closely. My suspicion, however, would be that if we look beyond this bubble we happened to move into (for $180,000 12 short years ago), we might find all kinds of reasonable or more reasonable housing that is still within biking distance of lots of things.
To me the challenge you pose: proximity for biking vs affordability just stacks up a little differently, not quite so starkly. But perhaps I’m wrong. Thanks for getting me to think a little more about it.
I imagine I’m probably part of your generation (born in 1980), and I think right now in Portland (which certainly prices have gone up a good bit) it is more an issue of entitlement with many would be buyers than it is with an actual problem. Most people in our age group just don’t want to compromise. They feel they deserve to live as close to the core as they want and the housing should be available to them. But that’s not the real world. Housing near the core is expensive. If they want to buy a house, move a little further out if you can’t afford it. Bike an extra mile or two and save $100k. Or don’t go out to eat 5 days a week. Or don’t buy a new set of clothes every other week.
A decent house 5-6 miles from downtown is certainly attainable for two people who are making $35-40K in Portland right now. They just need to compromise and sacrifice a bit and make it a goal.
That’s a great perspective, davemess, and a helpful corrective to the shrill cries of some.
Entitlement?? On which side . . . those that already own real estate? Because that certainly is true!
davemess wrote: “an issue of entitlement with many would be buyers”
I interpreted that to mean a sense of entitlement on the part of those who would like to buy a house; they appear to think they deserve a package that simply may not be realistic at a given income level.
Thanks for explaining what was obvious. I was attempting to point out the hypocrisy in Davemess’s “entitlement” comment.
Why is that hypocritical? Do you know the circumstances of dave’s or my house purchase? Maybe we did exactly as he was suggesting people without large incomes looking for a house today should? I don’t know enough to rule that out.
On the one hand you have rich homeowners demanding that anyone who can’t afford a 500k house live on an arterial where you can’t open your windows or move miles further out and pay a premium for the privilege because the rich people in those $500k++ houses don’t want their neighborhood to ever change. Many find the situation preposterous, and you have davemess accusing them of having a sense of entitlement, not the rich landowners. I don’t know where you or davemess lives, or what your lives have been like. No matter how hard you may have worked, that doesn’t justify government creating exclusively rich enclaves. Many are upset about it. And they are damned right to be.
Nope, you’re right, we’re near the bottom of the list of the 50 largest metros, at least according to the following analysis: http://www.newgeography.com/content/002950-the-cities-where-a-paycheck-stretches-the-furthest Southern California is worse than us, but the other West Coast metros are better.
** Note: The cost of living index used (which is the only one widely available that I know of) is for upper-income-type spending (“mid-management”). That is definitely a problem with it for most analysis, but it’s better than nothing…
I don’t know how to fix this problem. Land prices and construction costs have increased which increases the rents on new construction. I guess we increase the supply or decrease the demand.
I miss the ol’ Portland where young people go to retire.
I think the endgame here is that prices will continue to rise until we become like San Francisco — so expensive that it forces a lot of people out and slows in-migration. I see this as a very negative outcome, but I don’t think the city can accommodate current rates of in-migration and household creation indefinitely.
The difference between Portland and San Francisco (or California in general) is that it’s actually possible build things here. We have a very efficient development review process, and no equivalent to the CEQA which can hold up projects for years. Between Downtown, the Pearl, Conway, South Waterfront, the Lloyd and the Central Eastside there’s also a lot of land that’s zoned quite intensively where developers can build large projects.
I disagree. Zoning in SF proper (the suburbs are another matter) is far less density-restrictive than Portland.
Have a look at this map – http://marketurbanism.com/wp-content/uploads/2015/01/sf-building-height-zoning-1.jpg – the yellow areas indicates areas zoned for a maximum height of 40′. San Franscisco might allow for taller buildings in a few small areas like the Financial District, but overall our zoning has a lot more capacity in it.
Why are you linking to some low0res blog map when there is a much better map that illustrates the enormous diversity of SF’s residential zoning code?
Every major west-coast city except Portland has code that allows for a spectrum of denser residential and residential-mixed use development. Portland is unique in having huge swathes of the central city carpeted by tracts that restrict development to detached single-family housing.
The map I linked to shows allowable heights, which is why I linked to it. The map you linked to shows zones, which doesn’t really indicate anything to someone unfamiliar which San Francisco’s zoning.
But anyway, if you think San Francisco’s zoning is so much more permissive than Portland’s, how do you explain that they only issued permits for 2,711 units in 2014 compared with the 5,016 units that Portland issued? (Data from the Census Bureau).
One added thought: I think you and I are actually in agreement that it should be easier to develop a range of housing types in Portland’s R5-R20 zones. I just disagree that San Francisco’s zoning allows for more development opportunities.
Given the relative size of each city, I strongly disagree. With the land prices in SF, they should be building 20-story condos all over the city, but the vast majority of the land is restricted to 4-story developments. SF is the poster child for bad zoning policy. How do you explain the insane housing prices in SF if you believe they have good policy?
Maybe people living there don’t want 20-story condo buildings all over the place?
Maybe causing a housing shortage to match bourgeoise taste is abhorrent?
Of course they don’t want development. Their property just gets more valuable every year. Sucks for everyone else, though.
I agree. Nevertheless, allowing 4 story condos and mixed-use residential (this category does not even exist here) in traditional residential areas is a significant improvement over Portland’s FUIGM residential zoning policy.
And the story is much the same in Seattle. Capitol Hill, Queen Anne, Ballard, and Wallingford residential neighborhoods have seen huge increases in density over the past 25 years due to zoning that permits low-rise residential development.
To clarify: I agree that they should allow 20 story condos everywhere.
I should note that SF’s zoning code resembles that of many dense european cities which also have broad height restrictions but allow low-rise denser development in residential neighborhoods.
It also seems to me that complaining about SF while living in NIMBY PDX is a bit odd. I would jump up and down with joy to have zoning codes reminiscent of those in the larger and more liberal cities to our north and south. That being said…I’m a huge fan of building up. We need to free land for more productive and sustainable uses!
Building up may seem great, until your neighbor does it and casts your home in perpetual shadow.
Not everyone would agree that changing the character of existing neighborhoods would be an improvement. In fact, I would argue that it is exactly those neighborhoods that give Portland much of its “Portland” feel.
What you propose would fundamentally change the nature of those neighborhoods. I suspect that the majority of residents (including renters) do not want to see their neighborhoods changed into something much different. People choose to live in those neighborhoods for all sorts of reasons; proximity to downtown is only one factor.
The “fundamental character” of inner NE Portland changed 10 years ago when many african-americans started moving out and the white folks started moving in.
The jobs are there. A huge percentage of them may just be on the Westside, which makes transportation an even bigger nightmare than it already is.
A majority of folks want to live in Portland and are willing to commute to that “worth it” job on the outskirts of the city. I just wish more folks sought alternative modes of transportation to get back and forth from those jobs.
We need a SW corridor MAX line. We also need to take highway funding from ODOT so we can build a subway network.
I could think of lots of (transportation) things to spend a billion(?) dollars on. That would not be very high on my list. What exactly would be your reasoning, your feeling that this would be a good way to spend our money?
We are going to see a big increase in traffic due to steady population increase. Our metro area needs express options for commuters. Since suburbia tends to be lower income now, this would allow someone to live far out and not own a car. MAX them becomes a more local option that is for heavily used surface lines/non express. We need a BART option for our region. We are hrowing at a faster rate than SF according to 2010-2014 city data from census bureau.
Except we’ve seen decreases of car traffic volumes on many roads (including Barbur) over the last 8-10 years. And predictions for traffic increases over the I-5 bridge were proven to be overestimates.
Transit works. Doubling down when we are in an ongoing boom is a good idea.
The Pearl? Lloyd district? Central east side? South waterfront? Booming.
The streetcar network should be expanded hastily after the loop is completed. Down Sandy, MLK, and yellow line to st johns along Lombard.
The streetcar gets 15,000 riders a day. By way of comparison the peak number of cyclists going over the Hawthorne Bridge in the last 30 days was 8,500.
The streetcar lines are over 7 miles long. And you’re comparing it to one bridge.
Frankly I’m kind of ambivalent on the streetcar, but do think it obviously was just a development tool versus a real answer to transportation issues.
But you’re comparing apples to oranges.
I’m just making the point that the streetcar is enormously popular. If you think that the streetcar “obviously was just a development tool” I have to assume that you don’t ever use it. If you did, you’d see that it’s often packed.
New York’s most recent subway line extension (about 1.5 miles) was budgeted at $4.5 billion.
ODOT’s entire 2-year budget for FY2011-13 was less than $5 billion including almost $1 B that was transferred to cities and counties. After subtracting out various other stuff including transit, rail, licensing, etc., the highway program is $2.5 billion for two years. I don’t think you can build much of a subway from that.
One certainly make a downtown bypass for MAX that isn’t stopping a million times. Direct and quick.
New York’s recent subway projects are the most expensive subway projects in the world by a significant margin. I’m not going to claim a Portland subway would be cheap, but University Link in Seattle is probably a more realistic point of reference: $1.9 billion for 3.15 miles.
Whether one uses the NYC or Seattle subways as the basis for estimating subway costs doesn’t change the fact that even a starter subway line would be many times more than the entire ODOT highway budget for years and years.
No, it clearly would not and it is an investment that would have many times returns in density taxes from property.
I’m surprised that no one has commented on another possibility: children as additions to households. As I look around my neighborhood (inner SE) over the last few years I’ve seen older retired couples or singles depart for other housing and seen replacement by young couples who add children.
Portland Public School enrollment in 2005 was 42,500 and is now 48,500.
And, for what it’s worth, one elderly neighbor was replaced by a couple and child and father/husband is a bike commuter.
“everything will become affordable again” … not likely.
It seems like an important factor here is the relationship between the percent change in median income and housing costs. That would a useful graph to have along side percent growth of population and housing.
There is some value in looking at these issues just in Portland where new and legacy bike and pedestrian infrastructure is most developed. But these are regional issues. Part of the affordable housing problem will be “solved” in Portland by lower income people being forced to move to East County, North Clackamas, or to new pockets of poverty in Washington County where commutes are longer and transportation choices fewer.
Once again, great reporting here on Bike Portland.
Which is why we must not stop any housing that owners want to build through overrepresentation of NIMBYs in the process.
OREGON INCLUSIONARY ZONING COALITION
You guys need to lobby for the bill to amend and include renters, not only buyers/owners! Also, linkage fees are needed to make it work. Why hasn’t this been pushed to be included on the current bill?
Good link, anna–thanks.
You may notice that over 90% of the new construction in NW, NE, SW, and SE are apartments with California ticky tacky construction without any off or on street parking. Most of these are not on bus lines. True! some of these actually have insulation in the walls. Bicycle is the only reliable transportation to and from 30,000 of these apartments. The residents cannot afford the $300 per month parking fees that will happen within a year. I have 2 in laws that have been living in the same two 1 bedroom apartments in pearl for over 30 years. They originally were paying $125 a month. Now it is $1300 a month with no parking space. They had a space up til 2 years ago. They have not seen the landlord since they moved in and have to pay for their own utilities. It is still less than anywhere within 4 blocks of ESCO.
What does ‘California’ mean other than ‘thing you don’t like’?
Do you have a source for the claim that almost all of the new development lacks on-site parking? My sense is the opposite, at least based on Albina + Lloyd District new development.
We need to remove parking minimums as a restriction.
I realize this will be unpopular here, but so tired of the call to remove parking minimum restrictions. The only real benefit for this is to increase profit margins of developers. Look at one of the newer New Seasons near Grant Park – they have a huge sign that says “great parking here” (or something like that). People own cars and if we want people-friendly streets and neighborhoods, especially for families, lets keep them off the streets.
You fail to realize if developers have money freed up from parking they WILL put that into housing to invest that money wisely. It is not just a benefit to developers; taking this absurd restriction of parking minimums away would make it easier to add housing stock.
Parking is expensive and unnecessary.
This is an age-old fallacy “if developers have money freed up from parking they WILL put that into housing to invest that money wisely” Has never happened and it never will.
This doesn’t prove that the regulation is at all necessary. Parking isn’t a right. It induces people who own cars to live there. Close in, especially, this makes no sense.
Cause developers clearly aren’t in it to maximize profits…….
I think a quick comparison of rents on Division Street between units that have parking and those that don’t will reveal that they are pretty similar… the developer is the one that benefits by externalizing his costs.
But you are ignoring the fact that they may have added more housing by forgoing parking thus making averages less upwardly pressured than they would have been.
If you change the regulations that apply to all projects so that no parking is required, then assuming the market price for parking is below the cost of construction and enough slack in zoning you can assume some projects that were not viable before will be, increasing the housing supply serves a public good. That’s different from a single developer with an apartment they are going to build anyway getting out of an expensive regulation.
Pretty much all I can think of are close to tons of public transit. Everything going up in the Lloyd District couldn’t have more access unless it were downtown. The Williams corridor is near bus lines. The Grant Park Village at 33rd and Broadway: on several bus lines.
Sigh…the livability this city once had is going fast.
100% agree. Lets keep building and building because some want to be San Francisco or NYC.
not building is pretty clearly how San Francisco got to be San Francisco…
If we don’t add more housing stock faster within the city and UGB culture here will completely go away. Change os not the end of Portland; stifling change/growth is.
Many will argue the opposite, that the culture will completely change with a sole focus on build, build, build.
Division or Williams vs Laurelhurst or Ladd’s Addition? Gee…what a tough choice.
Maybe not for you. But the city is not just made up of you’s.
The city has an awful lot of renters who are currently under-represented in decision making processes. I hope you would agree that this is not necessarily a good thing.
I live in NoPo but would beg to differ on suburbia being a “lower income” territory. In fact, Lake Oswego, Progress Ridge (Beaverton), Bull Mountain (Tigard), Bethany, Peterkort, Stafford, Skyline area (much of which is now in unincorporated WashCo.) are the richest areas in this state.
Yes, this comment reeks of someone who doesn’t leave the center of Portland very often.
Throw in Happy Valley as another example.
Areas that actually have less density than the low income areas of our suburbs that are underserved by much needed heavy rapid transit.
What about Gresham, Far East Portland, deep Vancouver, Clackamas sprawl, Aloha?? Poor areas not served as well as they could be by beefed up transit
If much of the rest of Portland starts to look just like SE Division, that probably will fix it. Nobody will want to live here.
The so-called wisdom of the marketplace does not work with public necessities. Instead, the market is destroying the character of the city.
I say the city drstroyed the ecosystem of this area that existed before we cane here. So we meed to maintain it within the UGB to protect the rest of wilderness in Oregon. Inclusionary zoning with linkage fees will make the density affordable. Transit and infrastructure is much easier to maintain at dense populations.
Are you talking about the same SE Division that has a bunch of fully leased apartments and lines out the doors of its restaurants?
It’s bizarre how these people that want to enclave portland contirt their delusion.
I walked down Division last night and there was definitely nobody walking on the street or packing the restaurants or lining up for ice cream or enjoying themselves. The guy visiting from Indianapolis walking with me definitely did not say “is every street in Portland amazing?” the moment we turned onto the Division sidewalk.
Journalists really should clarify sarcasm 🙂
Just think how much more awesome Division would be with better architecture!
When I go to Division in the evenings, the eat/drink businesses look like they are doing quite well. I don’t think I’m imagining the crowds at Salt Straw, Bollywood, Pok Pok, Sen Yai, etc. Like the rest of Portland, though, the sidewalks roll up by 10 pm.
The question is though, do many of them live around there? Or are many (or most of them driving in from somewhere else)? It’s one thing to build a destination for dining and shopping, it’s a completely different thing to balance an area where many people still want to live there.
I remain concerned that there is so little diversity of businesses on SE Division. The restaurants replaced (among other things) a disaster restoration business, a business that stocked thousands of parts for common appliances and a bunch of other small businesses that had weathered economic ups and downs.
When the tech industry contracts, many of those restaurants will close, and the apartments will be less desirable as the owners under-invest in maintenance and the gap between rent and income grows.
The economy is due for a contraction and PDX will be in drought in two years. Just my guess based on past cycles- 2017. Food prices are definitely going up. Marijuana could also be a competitor to liquor and food for scarcer disposable income.
Interesting overview and article by Nick Christensen on the Metro site, re: the UGB–includes video interviews with several regional leaders (published just a little over an hour ago):
Hear, hear, for talking about the longage of people! 🙂
Weird. I posted this as a reply, way up yonder, to 9watts 5/21, 12:03 comment. How it wound up here is a mystery to me.
Tightly and densly built urban housing without parking will within a generation become tenement housing after it is realized that most of the “New development” has squeezed out the industrial base and the majority of the occupants have to commute to the burbs.
Because there won’t be an automation revolution at all? Or nano-tech to make space-efficiency a non-issue? You make a lot of assumptions. Industry isn’t the same as it was, and it certainly won’t be excluded from Portland because of density of housing– the opposite. And there’s more possibility now than in the time of slums to make things work densely without pollution. You are just doom and gloom and no substance.
“Production” employment only accounts for 6.5% of jobs in Portland. I don’t think that is going to be an issue.
Oh, I don’t know, maybe consider stopping unlimited illegal immigration and stop serving Portland up as a Sanctuary City for illegals? Might be a start.
So- what kind of methods would “stop” illegal immigration, which you claim in “unlimited.”? Raid the Asian restaurants on SE 82nd and the RVs behind the restaurants where the kitchen staff sleep?
Deport all those kids brought into the US as babies and raised here
speaking English and saluting the flag.?
Are you also a zero-population growth person too? Trek 3000 once recommended sterilizing all male babies at birth. Are you one of those folks?
Nothing invites non-Caucasians to ride more than anti-immigration rhetoric.
This is Bike Portland at its nadir. Thanks JMak.
Either that or the space occupied by restaurants will be remade into small manufacturing after demand for restaurants falls off. On Division, admittedly, Fox Fence couldn’t fit in one, but the Scooter shop would. Don’t know that we’ll need as many transmission shops in the future of electric cars or just plain less cars.
I don’t think there’s anything rational about “super-local” concerns, assuming that’s a polite reference to anti-housing activism.
Opposition to new housing ignores how corridors benefit from new residents, both in commercial activity and safety. Opposition ignores how people’s own needs will change with time, and how their ability to meet an old house’s needs may change. For some people their ability to stay in the neighborhood will depend on their ability to find alternate housing. And finally, there are children. It’s easy to disregard the plight of young adults plagued by the housing shortage if you don’t sympathize with them, if you consider them “other.” But if you have children, sooner or later they will be in that cohort. Your children will be the “other.”
“Super-local concerns” are rational like someone with severe nearsightedness claiming the end of the world and the tip of their nose are the same thing.
At heart, your argument seems to shift all the decision making to real estate interest and their lap-dogs.
Like our mayor?
I like chihuahuas, so I refer to Hales as a “lap possum.”
This is from the very interesting story about the UGB which rachel b linked to below:
“Oregonians hate two things: Density and sprawl.”
So where do you think we should house climate refugees, 9watts?
I’m fine with anticipating and even planning for the possibility of climate refugees who may want to move here.
But I don’t think we should incentivize, subsidize, reward in-migration, and the development associated with that. If things get crowded or threaten to get crowded it is not our responsibility who live here, have paid taxes here for generations, may like things how they are or have been, to bend over backwards to accommodate additional millions. We’ve done a rather poor job of accommodating some of those already here (for generations). Let’s fix that first.
I don’t think I’ll ever understand our cultural penchant for this—except of course in so far as it makes millions for developers, landlords, & those with property to rent or sell.
Since there’s no way of limiting in-migration, what you’re suggesting is a two-class society. “Natives” whom government should prefer, and “outsiders” whose needs and problems government should ignore.
The problem with that (aside from the obvious moral problem) is that there’s no mechanism for discriminating. There’s no structure for telling homeowners, you can only sell to “x” and not “y”. And I think the prospect of enacting such a mechanism any time soon is poor. So what will happen in the future is what happens now: discrimination by wealth and income. Ignoring the housing shortage and the problems of in-migration doesn’t protect natives and punish outsiders, it protects the wealthy and punishes everyone else.
“Since there’s no way of limiting in-migration”
But that is hardly a fair description of where we stand right now. Right now we subsidize in-migration, additional Oregonians, to the tune of hundreds of millions of dollars every year. Surely there is some middle ground between violating the Interstate Commerce Clause and using our tax money to incentivize people who don’t live here to come join us.
“The problem with that (aside from the obvious moral problem) is that there’s no mechanism for discriminating. There’s no structure for telling homeowners, you can only sell to ‘x’ and not ‘y’.”
There are many other ways to take up this challenge, to reward behaviors that align with the benefits I’m talking about and discourage behaviors that work against them. It doesn’t have to be a question of selling to X vs Y. We could instead elect to, for example, stop rewarding the buying and selling of houses in the myriad ways we now do. What if, to pick a hypothetical policy, we decided to discourage the buying and selling of real estate: get rid of the 1031-Exchange and the mortgage income tax deduction, or replace them with something that rewards staying put? Part of the reason it is so common for people to move all the time is that the matter of housing is in fact a real estate market which has become a big casino. Is that the best way to advance our social objectives? What if we decided to substitute a package of social objectives for the profit-motivated parameters of the housing market we currently have? Might that help us get a handle on lots of these problems? If nothing else, the conversation would be instructive.
“Ignoring the housing shortage and the problems of in-migration doesn’t protect natives and punish outsiders, it protects the wealthy and punishes everyone else.”
What I am proposing in no way ignores the ‘problems of in-migration’; it is an explicit reaction to the near total silence, currently, about this as a challenge. As for protecting the wealthy and punishing everyone else, wouldn’t you agree that the system we have already does this? I don’t see how acknowledging and working to eliminate growth subsidies, embracing a conversation about the costs and benefits of our growth-drenched politics couldn’t yield different policies than we have now, couldn’t do a better, more equitable job of addressing these challenges. Why so beholden to the deeply flawed status quo?
If you asked the question of our fellow Oregonians: would you prefer an Oregon with twice the number of people we have today, I can pretty much guarantee you only a tiny fraction would answer yes. But why is it then that we refuse to ask ourselves what (non-xenophobic) strategies we might consider to avoid that outcome? To dismiss the entire issue out of hand hardly seems adequate.
Not every city is suitable for every one for their entire lives. Nor is every neighborhood in every city. Abundant and reasonably priced housing facilitates mobility, a legitimate social objective. It creates the opportunity for children of long time residents to afford their own place when they grow up, a legitimate social good. Allowing more small units to be built in increasingly homogeneous neighborhoods of detached single family houses on large lots can increase economic and social diversity. Another legitimate social objective. It’s not just about developers making profit (most of which goes to landowners, not builders).
Saying you don’t want money to trump social objectives is a cop out. If you want a discussion on these policies, then why not clarify your social objectives, and don’t cast off anyone else’s as being about money.
“If you want a discussion on these policies, then why not clarify your social objectives, and don’t cast off anyone else’s as being about money.”
I’m not hiding my social objectives. I think I’ve been pretty clear about them, to the extent that I can articulate them.
We have a cultural hangup (frontier mentality?) when it comes to fixing what we have (infrastructure, homelessness, existing housing stock, appliances, etc.); we prefer instead to start over or skip the messy issue entirely (CRC, _____, McMansions, refrigerator recycling, etc.). This asymmetry has real social costs. The poor who already live here always lose. I don’t think this is acceptable. And it isn’t that I’m (mis-)characterizing everyone else’s views as being about money, but someone who defends the status quo where money does tend to overwhelm other alternative approaches may very well get that treatment from me and I am prepared to defend that.
“Abundant and reasonably priced housing facilitates mobility, a legitimate social objective. It creates the opportunity for children of long time residents to afford their own place when they grow up, a legitimate social good.”
I agree. But there are (at least) two ways to have abundant housing. The one we refuse to consider, acknowledge, explore involves revisiting unchecked population growth.
“Allowing more small units to be built in increasingly homogeneous neighborhoods of detached single family houses on large lots can increase economic and social diversity. Another legitimate social objective.”
I agree with that too. I wasn’t arguing against being creative about how we do land use, planning, zoning, etc. My point was that all of these strategies become hamstrung by our refusal to wrestle with the 800 lb gorilla.
Global or national population growth is beyond the scope of housing policy set in Portland. Even if it was flat or declining, Portland is a desirable place right now and would be attracting migrants. You said you want to cut subsidies to growth, but take a closer look at the Fodor report you linked to. Its numbers seem suspect at best. It seems based on the claim that all existing infrastructure is already fully utilized, which isn’t at all realistic. It throws in every program it can claim is at least tangentially related to ‘growth’. Non-profit low income housing units? War veterans housing? It includes TTI’s overinflated congestion costs?
Let’s say there are some real subsidies, and they encourage some to come here. Without those subsidies, those people wouldn’t come here because housing would be more expensive, right? Then those subsidies are providing a social service to existing residents that wouldn’t benefit from more increasing rents as well.
So it’s back to the question of how do you privilege long time residents over ‘foreigners’, and is it moral to do so?
thanks for the corrections on the UMR that Fodor cites. I’m not up on all those sources. I’ll give this a read.
You wrote: “So it’s back to the question of how do you privilege long time residents over ‘foreigners’, and is it moral to do so?”
I think one of the reasons we seem to be talking past each other here is that we’ve not yet arrived at some commonalities we can agree on. This is a large and largely avoided topic, so this is not in itself surprising. But I would like to think it possible to have a reasonable discussion of this where we agree on some basics, and then nibble away at the stuff we don’t agree on, see how far we get.
You and others have now brought up the question of morality, of whether what you see as following from my rather broad suggestions can be justified morally. I appreciate that pushback, and will return the favor: Is it moral to continue encouraging and subsidizing additional thousands to move here, when the ill-housed, the pushed out, the homeless who are already here get the shaft? When we know that housing is and will necessarily remain in short supply for the foreseeable future? Is it moral to avoid the tough subjects of inequality, population growth, and the policies that encourage or reward both?
Say there’s a new subdivision that gets built and impact fees don’t cover the cost, a lot of tax dollars go to support the ‘public’ infrastructure that’s useful in practice only to the new residents. Or even if impact fees cover the cost, the strongtowns guys have written at length how many developments like that don’t generate enough revenue to cover maintenance costs, or replacement costs for the next infrastructure lifecycle. They’ve also written that those projects are everywhere, so I’m sure the Portland area has quite a few. Supporting that sort of auto oriented development is wrong. But the thing is, I don’t know that the money goes to the people priced out of LA, or refugees from jobless areas elsewhere in Oregon or in other states that you think are being subsidized to come here. Because I don’t know who moves into those developments. If your neighbor sells his house and moves into that subsidized development is it still a subsidy encouraging additional thousands to move here?
I think we both see problems with subsidizing auto oriented development patterns at great public expense. From your posts you seem to see the alternative as no growth. The alternative I see is to legalize density. Gradual intensification of land uses is the historical development pattern that built every city. The last 50-100 years that process has been disrupted, and the costs have been great. Permitting density everywhere doesn’t mean that you’ll see high rises on every block in the metro. But a lot of detached houses will have to go in order to make housing affordable. Nobody has to be forced to move before they’re ready to, but many will have to put up with ‘undesirable’ neighbors. Lower housing costs, both per square foot and by permitting people to buy less house, will greatly improve the situation for those who are being left behind now. Many will still be unable to afford housing – can’t pay rent if you don’t have a job. But the reduced housing prices will make it affordable to subsidize those at the bottom in a way no west coast city does – the street homeless population is an order of magnitude higher in Portland, Seattle, LA, SF etc…than most east coast cities.
“From your posts you seem to see the alternative as no growth. The alternative I see is to legalize density.”
I understand that, and you have lots of company. Most of my friends agree with you, and I am a big proponent of density myself. But what I’m objecting to is the unwillingness of density advocates to also see the futility of their unitary, supply-side approach. Soren brought up GHG emissions. These are absolute, and we’ve not shown ourselves to be capable or inclined—at a societal level—of reducing these per capita. So the idea that accommodating, much less incentivizing population growth is at least from where I stand incompatible with that goal. Something’s got to give, and the last 50-100 years don’t really provide the template we need for the next 50 since those were exactly the years that yielded the climate crisis we’re currently in.
“the street homeless population is an order of magnitude higher in Portland, Seattle, LA, SF etc…than most east coast cities.”
I’ve always assumed this had more to do with milder winters than any local land use differences, but perhaps I was wrong.
I want to thank you for the conversation and your thoughtful insights, lop.
Milder winters is an issue. So is a stronger safety net on the east coast. In NYC if you ask for a bed and they don’t have room in a shelter they’ll rent you a hotel room. Another big issue is that the east coast cities until recently were declining. A large amount of formerly middle and upper middle class housing was abandoned by those fleeing to the suburbs, and this created an abundant supply of cheap housing in areas where those without a car could have a reasonable degree of mobility. In boom towns in the west, that cheap housing supply was never as large, and much of it has already been reoccupied by middle/upper middle class. Boom towns need a different approach to housing those at the bottom. Portland isn’t the richest city around. Subsidizing the homeless at current rents would be a not insignificant financial burden. At the same time a substantial amount of regional wealth goes into inflating land prices. Short circuit that process and you’ll free regional wealth for more productive uses – expensive land doesn’t create jobs, going out to eat or to a show does – and make it cheaper to subsidize housing in transit/ped/bike friendly areas. I didn’t mean that different land use had created the larger street homeless population in the west, but rather that different land use policies were a path to reduce it.
If you asked the question of our fellow Oregonians: would you prefer an Oregon with twice the number of people we have today, I can pretty much guarantee you only a tiny fraction would answer yes. But why is it then that we refuse to ask ourselves what (non-xenophobic) strategies we might consider to avoid that outcome?
a strategy that limits in-migration to protect land values of current rentiers…oh sorry…”neighborhood character” is inherently xenophobic. it’s also a losing battle. climate-refugee in-migration is coming and it’s going to result in the very worst kind of “growth” if current residents erect nimby barriers to sustainable growth in urban areas.
you’re skipping over the reason I’m wading into these waters. Is that because you don’t think we could do better, find a middle ground between your NIMBY caricature and Soylent Green?
i’m certainly willing to discuss elimination/reduction of development/growth subsidies once we also agree that incentivizing detached single family housing to the tune of hundreds of billions each year is even more pernicious.
“I don’t think I’ll ever understand our cultural penchant for this—except of course in so far as it makes millions for developers, landlords, & those with property to rent or sell.”
I think that thing you’re struggling with is equality before the law.
You mean that money always trumps social objectives?
I “like” the UGB* AND dense housing. Suggesting that this position supports the status quo is absurd because its not currently even in our societal overton window. If we are going to achieve negative GHG output in the next few decades, building up will be inevitable.
*The metro area’s UGB is failing in the ex-urbs.
“If we are going to achieve negative GHG output in the next few decades, building up will be inevitable.”
I recognize where this sort of statement is coming from, but you have to realize how much it sounds like this –
A supply-side focus would lead us here. All I’m saying is that there are other ways to think about this dilemma. There are, after all, more than just two outcomes imaginable.
Negative GHG emissions will be vastly more difficult to achieve with increasing population. And just because it is easier to talk about building up than it is to talk about the larger scope of this problem doesn’t make that statement any less true.
up-thread i pointed out that every other major west-coast city has a far wider array of residential zoning options (as opposed to portland’s ridiculous anti-density residential classifications). reform in this direction would be the epitome of the middle ground. but in portland this kind of milk-toast reform is considered by many to be marxist social engineering. this is the most “libertarian” anti-density city i have ever lived in.
Part of the problem might be that Portland has minimum densities in each zone, not just maximum densities. So changing the zoning mandates something different and could fairly be seen as a form of social engineering. In many cities this isn’t the case, because zoning for higher density relaxes the prohibition on denser construction but doesn’t prevent low density construction directly. (it may indirectly because high density uses will outbid low density uses, though allowing the housing market to function a bit freer hardly seems to qualify as social engineering) In Portland density is all that is permitted in some ‘town centers’ where demand can’t support construction, but is forbidden in other areas in near in neighborhoods because people living there like the ‘character’ of their neighborhood just as it is.
There is a wide swath of land within a few miles of downtown where zoning or overuse of historical designations conspire to prevent dense construction, forcing people to live further out, and pay more for the privilege. If any libertarian objected to changing to a denser zoning designation, then introduce a new zoning designation, that used the current minimum and a far denser maximum. Social engineering averted.
Last time I checked, I leave the city center everyday to work on the Westside. I work for Washington County, so I would put money on it I actually see more of the Portland metro area on a daily basis than you do.
I was agreeing with you, and directing that comment at the post that you originally copied (i.e. I get the feeling that Jeg doesn’t leave the center of Portland very often).
Apologies if that wasn’t clear.
My bad. My apologies.
One of the prevailing talking points of “neighborhood character” advocates is that increased development of multi-unit housing contributes to increases in rent. One problem with this myth is that cities that have facilitated robust development of multi-unit housing in desirable areas have had negative or low rent increase rates:
Contrast with Portland’s recent 7+% rent increase rate:
Portland’s low vacancy rates have helped fuel an apartment building boom. But many of the new units are entering the market at with rents above the median. A study by Zillow last month found that Portland-area rents rose 7 percent year over year, the seventh fastest rent rise in the country. The area’s median rent was $1,587, Zillow said.
And the most recent Zillow release shows that Portland’s YOY rental rate increase is now 8.6% (one of the highest in the nation). Is this really the kind of city “neighborhood character” proponents want to live in?