Surrounded by about 200 worried tenants, by a contingent of local media and by zero elected officials, Portland’s most prominent renters’ advocacy group declared a “renters’ state of emergency” Tuesday.
Saying that they’ve seen a wave of no-cause evictions and huge rent hikes throughout the city, the Community Alliance of Tenants called for two actions that its staff admitted might not be allowed under current law: a one-year citywide moratorium on no-cause evictions and a requirement that landlords give one year’s notice to tenants of any rent hike larger than 5 percent.
“Right now it’s harder for a tenant to find housing here than it is for a landlord to push them out,” CAT Deputy Director Katrina Holland said. “This is beyond a crisis. This is an emergency. Our communities are hemorrhaging and the bleeding has to stop.”
Many attendees to the event, in North Portland’s Peninsula Park, arrived on the bikes and buses that they’re able to use for transportation because they live in the central city.
“I pretty much live in a state of fear when it comes to rental,” said Lise Ferguson, who works downtown as a barista and administrator for a nonprofit. “I pretty much move every year.”
Ferguson said she and roommates had to leave her last house because someone contacted their landlord and offered to buy the property. The landlord took the offer.
Her most recent move put her closer to the Vancouver-Williams corridor, she said, so it actually improved her bike commute. Ferguson said it’s possible for a low-wage worker to live within bikeable parts of Portland if and only if they’re OK with sharing a house with roommates.
“Which isn’t bad,” she added.
For families trying to find space for children with only one or two breadwinners, the situation is more dire. Speaking to the crowd Wednesday, Juan Gonzalez said his family of five was evicted this year after their apartment building was sold for $2.2 million. They’re now living in his sister-in-law’s living room.
“We were happy,” he said, before beginning to cry and handing off the microphone in the middle of his prepared speech. “They just take our lives away.”
Briana Winterborn said she’d been persuaded to buy a house nearby 10 years ago, before Portland’s current crisis took off. Today, she gets around largely on bike and transit thanks to living where she does.
“For that to be elitist feels wrong,” she said. “Housing and basic food shouldn’t be something people make money off of. … With food you can eat really simply — rice and beans. With housing, we’ve taken away all the options.”
Winterborn said she supports universal rent control, and also a limit on the amount of money someone can make by owning property.
Though some people in the crowd talked angrily about landlords, politicians and developers driving the crisis, the event’s organizers seemed to be striving to capture the perilous situation for tenants without casting blame.
“We have an opportunity to be innovative in how we handle this,” Holland said. “A growing city, community development and stability can coexist.”
The Rev. Mark Knutson, of Augustana Lutheran Church in Irvington, described Portland’s problem as essentially one of morality.
“We are in a crisis in this city and we all know it,” he said. “It is also a spiritual crisis. What we are seeing now in the city is immoral. … Greed is overcoming many neighborhoods.”
Promise King, executive director of the League of Minority Voters, said the city has failed to follow coordinated plans that would add transportation, housing and jobs to an area all at once in a way that could raise the incomes of struggling Portlanders rather than merely bringing in richer people to replace them.
“I don’t usually do kumbaya things like this,” he said. “I’m a policy wonk. [But] it affects so many issues of our community. We need a voice. … The landlord has so much power.”
CAT staff didn’t respond to requests late Tuesday for any documentation that this year’s situation is in fact worse than previous years, or if so by how much.
But there’s little doubt that the situation for Portland tenants has rarely been worse. The recession that began in 2009 led to a near halt in new housing units for three years, just as new residents were pouring into Portland faster than ever.
That’s led to a huge deficit in the number of local homes…
…and the Portland metro area has had one of the nation’s 10 worst rental vacancy shortages every year since 2007.
(Data: Census Bureau.)
Some lower-income people like Ferguson have responded by piling into old homes, essentially combining their buying power to compete with richer families. Families like the Gonzalezes have a harder time doing so; many have moved further in search of cheaper housing.
Is there a solution?
CAT Executive Director Justin Buri said “there’s a lot of research being done” about what the city and county can do. State law forbids cities from restricting rent changes or sales prices.
“Because the state has so thoroughly regulated landlord-tenant law, the city and county feel they have no room to implement these policies,” Buri said.
The city, meanwhile, bans denser development on most of its residential land. It’s illegal to build rowhouses or duplexes in most of central Portland; just 162 such units were built in the city last year.
Kayse Jama, executive director for the Center for Intercultural Organizing, asked anyone in the crowd who was an elected official to raise a hand.
No one did.
“We have broken promises from our elected officials,” Jama said into the bullhorn that rally speakers had begun using to address the crowd after their speaker system lost electricity. “Where are you? You should be here! You should be here!”
— The Real Estate Beat is a regular column. You can sign up to get an email of Real Estate Beat posts (and nothing else) here, or read past installments here.
I’m pretty convinced that rent control (rent can never go up more than x%) is a bad idea, because over the long term it creates housing shortages and leads to a lack of investment in existing properties. Longer mandatory notice periods for large rent increases or no-fault terminations are probably a good idea though. I don’t know that a full year is the right length, but I think it should definitely be longer than the 30 days that I believe currently apply.
Renters make up ~60% of the population in Germany and rent control has not created “housing shortages” or discouraged investment in rental housing. I do believe that many Germans even support rent control regulation!
There is relatively little evidence that modern second-generation rent control programs contribute to problems with scarcity (theoretically or empirically):
What is a “second generation” rent control policy? How does it differ from what we have in SF or NYC or Cambridge (or other presumably “first generation” rent control cities)?
First generation rent control, which is the focus of economic studies suggesting increased scarcity, is global market rent control (e.g. all rental stock) with no exclusions for turnover.
I’m probably a little slow on the uptake, but I have no idea what you mean by this.
Rent control that targets all apartments in a region and treats new tenants the same as long-term tenants.
Is that first generation or second generation rent control? How does the other generation work?
All rent control I know lets the landlords raise rents when tenants change, but keeps increases to a minimum while someone is in the unit, and also prevents evictions that might be a backdoor way to get new tenants and raise the rent. I assume this is “first generation”.
How does “second generation” differ?
NYC has many apartments that are not rent controlled so it is a second generation or soft version of rent control. Studies that suggest rent control-induced scarcity often assume hard rent control where all apartments are controlled.
So… second generation rent control is where some units have rent control and others don’t? How do they determine which is which? How do renters get one of the coveted rent controlled apartments?
I’m sorry if I seem dense, but I just don’t quite get what you are describing.
“How do renters get one of the coveted rent controlled apartments?”
In NYC some are done by lottery, so you can have 98 affordable apartments and 48 thousand applications.
Some existing ones are first come first serve, good luck if you don’t know the super or their real estate agent. And if your application isn’t perfect, they won’t rent to you. If it is perfect but you want a day to think about it before signing a lease? Too bad, someone else will rent it before you make up your mind. There are tens of thousands with a more complete rental history, or who didn’t get the ticket for being in a park after dark three years ago, or have been at the same job for three years instead of three months etc…who are ready to rent today.
Public housing is by waiting list.
270k on the waiting list, 178k apartments. Rents don’t cover maintenance, the city and feds have been skimping on contributions they once made. You do the math.
Rent control is a great system for those already on the inside. Anyone not already here, or anyone who wants to move to the other side of town one day, or get a bigger place in a couple years to raise a family, or come back after a few years in college out of town, or anyone who has kids that want their own place one day etc…loses out.
Lots of people referencing New York–there’s at least three different flavor sod “rent control”. There’s rent control, rent stabilization, and the types of new development subsidized housing. They’re not the same.
Germany is not necessarily directly comparable to the US given that it has experienced very low population growth rates for most of the last 50 years (even dipping into negative growth in the ’70s, ’80s and 2000s and 2010s).
so you’re saying that rent control also acts as population control? I like it…
Correlation is not causation.
“Renters make up ~60% of the population in Germany and rent control has not created “housing shortages” or discouraged investment in rental housing.”
The other salutary thing about Germany is that their population is in fact not growing. This variable is, as always, notably absent from discussions about population pressure-driven inequities here.
At least it wasn’t growing until this past week…
And even before the refugees started pouring, the population of Germany was still rearranging itself. Certain parts of Germany are emptying out, and other parts are rapidly growing. Check out this map: http://www.dw.com/de/deutschlands-städte-wachsen-deutlich/a-18647520 Munich (and much of Southern Bayern), Stuttgart/Karlsruhe, Frankfurt, Hamburg, Berlin, Dresden, Köln/Düsseldorf and a few other areas are rapidly growing, but the rest of the country is declining in population. So yes, one can find lots of abandoned apartments in the villages of the former DDR, but cities like Munich aren’t even close to building a sufficient number of new residential units for their growing population.
I don’t think rent control has been overwhelmingly successful keeping the lid on rents in Munich.
“Renters make up ~60% of the population in Germany and rent control has not created “housing shortages” or discouraged investment in rental housing”
Yes, it has. Ich hab nur gestern dieses Artikel gelesen: http://www.spiegel.de/wirtschaft/soziales/wohnraum-jedes-jahr-fehlen-400-000-neue-wohnungen-a-1053064.html
“770.000 Wohnungen fehlen derzeit in Deutschland – und der Bedarf nimmt auch wegen der hohen Zuwanderung zu. Einer Studie zufolge müssten bis 2020 jedes Jahr 400.000 neue Einheiten gebaut werden.”
Translation: Germany lacks 770,000 apartments right now — and the demand is also increasing because of the high immigration. According to a study, 400,000 new apartments must be built by 2020.
The german word for apartment is Mietwohnungen.
Dude, I speak fluent German. “Wohnungen” is plural, and means “apartments”. “Miet” is just a modifier that means “rental”. Sure, “Mietwohnung” means “apartment”, but it’s just a way of being more specific.
It also can mean flats which are not rental apartments. This is why in the piece you quoted they broke down later numbers into mietwohnungen.
Regardless, some context is needed. Several hundred thousands units is not particularly meaningful in a nation with 82 million people (especially since rent regulation has been around for many decades and the shortage is a recent phenomena).
Oh, I get what you are saying. I think the numbers are still meaningful, given that only a handful of areas in Germany are actually growing, namely Munich (and most of southern Bavaria, Stuttgart/Karlsruhe, Frankfurt, Köln/Düsseldorf, Hannover, Hamburg, Berlin and Dresden). There are scores of villages with empty apartments, but there’s a definite shortage in the growing metro areas.
They be growin’ now baby – they’re getting about a million unwanted refugees from down south…………..
You still have waiting lists for those affordable apartments. It can take years to decades to get one in places like NYC and Stockholm. That’s not just an issue for people moving to an area for the first time from another part of the country/world. What happens to someone who moves away for college then wants to return? Say someone loses their job and can’t afford their rent and has to move in with family or friends for a couple months. If the only affordable apartment has a five year waiting list how do you think that plays out? What about the children of a long time resident who want to move out? Do they have to plan when their 13 that they want to live in their own place when their 18? What about someone in a rent controlled unit who lives on one side of the urban area, then for the first time gets a job on the other side? They either put up with a very long commute, or pass up the job offer. Because they can’t afford to move into a market rate unit, and it’s a five year wait for a below market rate unit.
Rent control helps many, but it is no panacea.
But, obviously, Oregon is not Germany, is it? Why do you think the German experience with rent control is in any way applicable to Oregon? Why is the German experience more applicable than rent control experiences in NYC or other US cities?
Seriously…we can play the game all day long that x country does this and it works there, so why not do it here…and that’s all it is, a game. There is no comparability between Germany and the US, let alone Germany and Oregon re: rent controls just as there is no comparability between the US anf Finald re: education policy.
Says the person who won’t end up homeless if their rent goes up again.
I’d agree with what mac says. Notice should be not less than 90 days, and notice of increased rate should nullify any existing time remaining on a lease, effective immediately.
Five percent is awfully low, and 12 months is an awfully long time. Requiring a full year’s notice to raise monthly rent from $1,000 to $1,051 could be a real problem when landlords are faced with sudden increases in costs from a property tax measure or major repairs. A large company can eat extra costs, but for someone just renting out a second home it would make more sense to post a 30-day no-cause notice to vacate and find another tenant at a higher rate.
Three months notice would be more workable. An alternative that might make more sense would be to require landlords to either give lengthy notice for increases or offer longer lease terms.
So true with ballot measures. Do renters think that the $x per thousand for school renovations they voted on wasn’t going to come out of their pocket, that only actual homeowners would pay?
I think that in the current situation, increases are much more than 5% though…
Some places that cap rent increases have created a mechanism for landlords and other property owners to claim hardship if they need to increase prices more than they are permitted to, and some city adjudicator determines if their claim is legitimate. You could create an exemption from the notice requirement where landlords have their costs go up.
Eliminating the option for no cause evictions will create a situation where people won’t feel comfortable renting a home out that they might want to sell or move back into. The overall effect of such a policy will be to reduce the available units making the undersupply of rental units in portland even worse than it is today. If people want a 1 year lease they should sign a 1 year lease, but what is being proposed is basically a 1 sided 1 year lease where the tenant can leave whenever they want but the owner has only 30 days of security. In practice this is practically what you have now with a 1 year lease because if someone moves early you are required to try to rerent the property at the current price and can only charge them rent if you can’t rerent it. The only thing that is going to actually keep rents down in this town long term is having a lot more available housing than we do now.
Yep, we can start by scrapping single-family zoning and parking minimums.
I see, eliminate single-family housing….yeah, uh, no. Move to NYC or Tokyo if you want that. I prefer living in my own dwelling.
Scrapping SF zoning doesn’t mean someone comes in and knocks your house down. It means when your neighbor’s house gets knocked down it’ll be replaced by a small apartment, maybe with a store on the bottom, instead of a larger SF house.
BTW, NYC and Tokyo both have plenty of detached single family structures.
But are they intermingled with 6 story apartment buildings? Even in NYC, they have zoning.
Who says the apartments need to be 6 stories? Eliminating single family zoning doesn’t mean eliminate all zoning. It means eliminate zoning that forbids anything but a detached home. That way, if your neighbor’s house is knocked down, it can be replaced by a duplex, 4-plex, 6-plex, 8-plex, garden apartment, a couple rowhouses, etc. Our zoning is artificially restricting supply here and in other cities. We bring this on ourselves.
Absent zoning they would be intermingled with denser development. In many areas, like in some parts of Portland, denser development was once permitted, but no longer is. So you have houses and apartments on the same block. But you can’t knock down an old house to put up an apartment in many cases. As mayor Bloomberg signed off on several ‘contextual rezonings’, that cut how many units could be built per lot – so before and after the change you could build 2500 square feet of housing where the original house was half that size. Before the change it could be a 2-4 unit structure, after the change it would have to be a large house.
“The only thing that is going to actually keep rents down in this town long term is having a lot more available housing than we do now.”
Or less people moving/staying here.
Maybe we should build a wall?
A cheap shot. davemess brings up a crucial and typically overlooked dimension of this problem. And dismissing it out of hand with this kind of retort serves no constructive purpose.
Portland is already a desirable place to live, recent development is making it an even more desirable place to live (IMO), and climate change will make it an extremely desirable location for millions of people south of us.
Do you or Dave have a suggestion for limiting this in-migration that is not facetious?
“recent development is making it an even more desirable place to live (IMO)”
The IMO is the key here. No one knows what the future will bring, and if Portland will continue to be desirable. Some of these issues might sort themselves out in the next 10-20 years.
I’m simply saying that it’s not a single variable equation.
“Do you or Dave have a suggestion for limiting this in-migration that is not facetious?’
I don’t think I’ve ever made any facetious suggestions about how to tackle this. It is a tough subject, but no less worthy of our attention for it.
Exponential growth (of people, of economic activity, of fossil fuel consumption) on a finite planet is doomed, cannot continue for biophysical reasons alone, never mind livability. As such it would behoove us to wrestle with these issues, and the sooner the better. Waiting until the metro area has 4 or 10 million people in it rather than just 2 million is kicking the can down the road and serves no one.
So, how to do it?
(1) stop subsidizing and incentivizing more people, more economic activity, more businesses to move here.
(2) revisit the conversation about who wins and loses from population growth; work toward some kind of consensus on the subject. Cf. Rockefeller Commission on Population Growth, Alternatives to Growth Oregon, etc.
(3) propose, debate, argue over policy suggestions for how to wrestle with this: there are a thousand ways to go about this. I am not claiming to have *the* answers, but the conversations we need to have would help us to not only identify some promising strategies but get more people on board with the whole concept.
(4) since you asked point blank: (a) spend our money on the problems we already have: crumbling infrastructure, homelessness, climate change, rather than on incentivizing people who don’t live here to move here. (b) take away the mortgage tax deduction, the 1031 exchange, make it harder to buy and sell real estate. (c) retire the child tax credit. (d) cap and trade for license plates, for new well drilling, for sewer or power line extensions: reduce the numbers every year.
@9watts . . . completely agreed! All of those suggested actions should be started now.
Unfortunately, I (and those of us who do not own real estate) must be pragmatic and start looking at more affordable places to live away from Portland. I hate to say it, but maybe Salem is where I must move.
Completely, well mostly, disagree about population reductions. Our goal is to maximize total human happiness. If you reduce population, you are incrementally increasing individual happiness but you’ve got less humans. It’s a quantity vs quality situation. There must be some critical population where total happiness starts to decline but I don’t think we’re even close to it. Sustainability is an obvious necessity however.
Do you mean the sum of all happiness, or the average/median of happiness per person?
“If you reduce population, you are incrementally increasing individual happiness but you’ve got less humans.”
Wait a minute. You’re overlooking time. Fewer humans at any one point in time surely doesn’t preclude more humans tomorrow or a thousand years from now. In fact it would be pretty easy to argue that a stable or falling human population *today* would positively affect the chances of human habitability a thousand years from now.
“It’s a quantity vs quality situation. There must be some critical population where total happiness starts to decline but I don’t think we’re even close to it.”
Well, yes. This is commonly called overshoot. By some calculations we passed that point in the 1960s.
“Sustainability is an obvious necessity however.”
So, how to do it?
“(1) stop subsidizing and incentivizing more people, more economic activity, more businesses to move here.”
Oh, stop economic growth? How are we currently subsidizing and incentivizing more people, economic activity and business to move here – besides Portland’s outrageous Sanctuary City nonsense?
I’ve never seen someone explicitly reject economic growth as a possible solution to improving lives…that’s new.
“(2) revisit the conversation about who wins and loses from population growth; work toward some kind of consensus on the subject. Cf. Rockefeller Commission on Population Growth, Alternatives to Growth Oregon, etc.”
You mean population control? Sorry, but the Progressives already attempted that via eugenics to cull the blacks; and they’re continuing with abortion and assisted suicide. If high rents is a moral issue as so many in this article expressed, then what is abortion and assisted suicide? Sorry, but I, for one, don’t want to see us killing off people so some have lower rents.
“(3) propose, debate, argue over policy suggestions for how to wrestle with this: there are a thousand ways to go about this. I am not claiming to have *the* answers, but the conversations we need to have would help us to not only identify some promising strategies but get more people on board with the whole concept.”
Wrestle with what, exactly? First, the problem must be defined. It hasn’t been defined very well here. Second, the causal factors must be identified. So far, the people attending this “rally” seem to think the causal factor is greed. Not sure what public policy addresses that, lol.
“(4) since you asked point blank: (a) spend our money on the problems we already have: crumbling infrastructure, homelessness, climate change, rather than on incentivizing people who don’t live here to move here”
I agree we can spend more on crumbling infrastructure. Who doesn’t? But the reall issue is where the resources come from. Too many people insist that more money be taken from my paycheck/wallet and fail to properly consider how to better prioritize and spend existing government revenues. Notice that you simply says spend more on this and this and that. That’s not a solution. The federal, state, and county governments have clearly demonstrated that they are incapable of competently maintaining current infrastructure, but you insist on throwing more money at the government for more of the same. That’s not a solution.
“(b) take away the mortgage tax deduction, the 1031 exchange, make it harder to buy and sell real estate.”
Yes; and no.
Eliminate the home mortgage interest rate is an absolute must. It distorts the financial market and tax regime.
Make it harder to buy and sell real estate….why?
“(c) retire the child tax credit.”
Sure, just as we should eliminate all government handouts and return that money to taxpayers.
“(d) cap and trade for license plates, for new well drilling, for sewer or power line extensions: reduce the numbers every year.”
Non-specific and, more importantly, doesn’t address the presumed problem here of high rents.
“facetious” referred to my “wall” comment.
i support most of the policy changes you listed but i strongly disagree that they will have negatively impact in-migration. in fact, i suspect that repeal of the mortgage tax credit and capital-gains exemption would significantly encourage apartment construction and in-migration.
Well said, 9watts.
Restricting the flow of people within the US is not a viable option. Period. Communities strive to attract young professionals, retirees, tech companies, etc and have done so for the longest time. This temporary problem of a housing shortage can be met with increased housing production, which is occurring, but perhaps not fast enough. Complaining about people moving here is not productive, so joking about building a wall is probably the only reasonable response.
(A) “Restricting the flow of people within the US is not a viable option. Period.”
(B) “Communities strive to attract young professionals, retirees, tech companies, etc and have done so for the longest time.”
You assert (A) as fact without making any attempt to explain why it is not viable, and then you state (B) as fact, again without any explanation. This is not helpful or interesting. Why are these things so clear cut in your mind? How do these taboos, these self evident patterns arise? How long until we realize that we need to change course?
Sure what you say is uncontroversial, common knowledge, how we’ve done things for as long as we can remember. But we’ve done lots of foolish, myopic, ignorant things sometimes for a very long time… until someone pointed out that they made no sense, were unjust, made people’s lives worse, and then, gradually, painfully, we changed how we went about things, reversed course. Blandly asserting that this is how it is serves no purpose; does not help us get beyond this impasse.
I see A as relating to, but perhaps not actually originating from, the inability of states of the union (i.e. the United States of America) to create tariffs and otherwise restrict the free trade between other member states. I had always assumed it pertained to the travel of people as well, but I may be wrong with that assumption since I’m unable to summon up a relevant portion of the Bill of Rights at the moment.
This what you’re looking for ?
Yeah, but every joke has at least a shred of truth to it.
Because let’s face it — we or our immediate predecessors created many of these issues BY DESIGN with zoning and land use planning laws that favored The Right People and effectively shut out many others.
Today, it is highly unlikely that a lower-income person can hope to move to Portland and actually find both a decent job and an affordable place to live in advance. And many Portlanders who are already here LIKE it that way.
Portland is pricing itself out of diversity. Until there’s a way to create and promote real tolerance and acceptance between differing cultures, races and socioeconomic levels, any attempt at engineering social change through legislation will make longtime Portlanders feel like something is being shoved down their throats.
The “right” people, eh? That’s so very liberal of Portland. Interesting perspective. So Portland’s liberal Democrats intended to discriminate?
maybe if we raise all the rents less people will move here…
I can’t tell if you mean:
maybe if we raise all the rents, less people will move here…
maybe if we raise all the rents less, people will move here…
Maybe you meant both!
How many times does it have to be stated that there will never be internal migration restrictions within the US? If the entire country packed up and moved to Oregon, it would be perfectly legal. Solutions have to be realistic.
Where should they move/live instead?
“Where should they move/live instead?”
Instead of only thinking of this in a static, right here, right now, sense, why not expand this, consider how to solve this over the long term. The number of future people is not a fixed thing. We can and do influence it. The child tax credit being just the most obvious. Heck, institute a child tax penalty. See where that takes us… 🙂
I am for the child penalty! 🙂 And I should get some kind of bonbon for not having kids.
Anywhere they want, I didn’t say that we should forceable remove or prevent people from living Portland (though i guess people somehow inferred that from my short comment). I just think there is a decent chance that Portland will become less trendy and it’s immigration will slow.
I hope you are right, davemess.
“It’s illegal to build rowhouses or duplexes in most of central Portland; just 162 such units were built in the city last year.”
Does this even matter since almost everyone in this city throws a fit about every last building being built anywhere? “It’s too skinny.” “It’s too tall.”
“It’s too big.” “This doesn’t match the architecture of the neighborhood.” “It’s ugly.”
I really, really want people to stop moving here. I’m sure some of you know how badly I want this because you feel the same. But I also don’t want to be priced out of town. I f’ing grew up here. That said I really hope the city changes their tune on this, or it starts raining in California, or Cleveland starts looking totally hot to people. Those last two things probably ain’t gonna happen so I hope we get a whoooole lot of rentals on the market soon.
“I really, really want people to stop moving here.”
I’ve never heard that in any of the cities I’ve ever lived in through the years before… 😉
Unfortunately for you, your government and local companies make (more) money by having (more) people move there. They even compete with others for that growth (i.e. tax breaks, lobbying for H1-B visa increases, etc.), so I don’t think they’re on the same page with you.
But I guess the question is whether there isn’t enough housing being built for the droves, or whether the housing market itself is subsidized in such a way to encourage people with money to become landlords, and people without to have to rally like this? (It’s going on all over the country, by the way – where I live 3/2 houses jumped from ~$2K/mo to ~$3.5K/mo this summer alone, but then again football and iPhones factor in more strongly in my neighborhood – I’m sandwiched between SuperBowl 2016 and the Jobstrosity).
Having had decades of landlord experience I can tell you the tax incentives are definitely there, let alone being able to get a mortgage for 3% these days with the right credit. I have a friend who owns over a dozen rental homes… most of his travel (and many meals) are business expenses. Can you write any of this stuff off as a renter? No? That’s what I call a “subsidy”… direct or indirect.
That sounds like tax fraud to me. Who takes tenants to lunch or travels to meet them? Schmoozing the plumber maybe? Having replaced a roof, furnace, water heater, heat pump, and refrigerator in a few years I can tell you there aren’t any tax breaks for doing it right. Patch-up an old, inefficient furnace and leave your tenants with a terrible gas bill plus not a lot of comfort and sure you can deduct 100% of that repair this year. Install a heat pump or anything you would get an energy incentive on as a homeowner… nope, not one cent in credits, plus it all has to go through depreciation (deduction spread over 30 years, lumped at the end of the 10-15 year life of equipment) and you’re not going to easily get it back from higher rent either. Half of our residential property is being basically dis-incentivised from having any kind of efficiency upgrades. Now, let’s talk about solar on your rental? If we want more slumlords, the 5% limit will definitely help.
Trips to work on your rental property, or if you’ve incorporated, trips to investigate potential property purchases, are fully (and immediately) deductible. But yes, that’s exactly my point: those costs are often embellished.
Recapture can be mitigated by moving back into your rental, but yes, you do pay for it in the ‘end’…
My wife and I are considering leaving town in 2016. That’s the best we can offer. 🙂
Hey Brad, I’m wondering if you have looked at other U.S. cities and found anything enticing. We’re trying to decide where to live afford-ably near transit and be able to bike and walk to some destinations. Like say, Portland in the 1990’s. Not great, but do-able. Thanks.
Minneapolis. Consistently tied with Portland for bike-city USA, 2 light rail lines in the ground and more LRT and BRT in planning. Cheaper than Portland. Very low unemployment. And I’m totally cool with snowshoeing to work. 🙂
Love ya, Portland. But I like to live downtown and if I can’t afford yours, I’ll find another.
Alright, cool. Thanks for the reply.
My impression is that most cities around the U.S. are becoming “like Portland” in certain respects. They’re all having a ton of 5-6 story apartments with ground floor commercial being constructed. They all have microbreweries and gourmet coffee shops and local/organic/vegan/etc type markets. They all have light rail, and bike infrastructure is being built in most of them. Even places like Des Moines, Indianapolis and Omaha. You know, places that most of us would never consider moving to. Cities around the country saw what Portland had and decided that they also wanted it. I think that’s a good thing. In the future, if a person from rural Nebraska wants to live somewhere where they can ride their bike to the local microbrew pub, they can just move to Omaha, rather than moving across the country to Portland.
I just visited Indianapolis and I can assure you it’s no Portland.
Just got back from Cleveland where I have a vacation home and was shocked at how many changes have happened in the last few years.
Housing costs are some of the cheapest in the U.S. – you can easily buy a house in a nice neighborhood for under $100,000 or a 1,500 sq ft condo for under $50,000 or rent a 2 bedroom apartment for under $900.
Their light rail system was either the first or second in the U.S. and started in 1913. The bus system is pretty good, was the first in the U.S. to have bike racks on every bus and their buses now has space for 3 bikes which is more than Portland. They’ve got neighborhood bike share systems, urban mountain bike trails, a rail-trail that goes the 113 miles from Cleveland to New Philadelphia, and they have developed a ton of bicycle infrastructure in the last four years. There’s also a National Park that connects Cleveland to Akron, one of the five Great Lakes for watersports, more rowing and river-based sports than Portland, a very vibrant art and music scene, a huge urban farming and organic food renaissance, is routinely named on lists of Best Beer Cities, Best Food Cities, Most Affordable Cities, etc. Full list of lists here:
Current unemployment rate for Ohio is 5.2% and Northeast Ohio is even lower. Lots of medical and tech jobs.
The Republican National Convention is in Cleveland next summer and they are busily working on capital projects, so the city will look even better soon. The politics of Ohio are similar to Oregon: Cleveland and NE Ohio are generally blue while the rest of Ohio is red.
Winters are colder than Portland but not as cold as Minneapolis.
But does it have a show called “Clevelandia”?
I grew up in Cleveland (It’s crazy that you have a vacation house in Cleveland?!?!?). I do imagine you wouldn’t find very many people who currently live in Portland who would be enticed to leave for Cleveland unless there was some substantial job advantage. They’re VERY different.
Telling people to stop moving here is not a solution.
I didn’t suggest we do. I actually ended by saying I hope we get a lot more rentals to keep rents reasonable and accommodating for all the people moving here that we can’t tell to stop moving here.
There’s a lack of affordable housing in areas that are comfortable to live without a car. This isn’t a Portland issue, it’s a national issue. I’m generally very pro development and would like Portland to relax some of its restrictions. But to really ‘solve’ this issue will require other cities all over the country to do the same. It’s not tell people to stop moving here so much as its give them somewhere else to move to.
“I really, really want people to stop moving here.”
There are no restrictions upon internal migration within the U.S., and there won’t likely be any in the near future.
What *might* help is the fact that other traditionally “boring” cities in the U.S. are becoming more like Portland. The mixed-use apartment boom is a nationwide phenomenon, which will have the effect of making cities like Des Moines and Omaha more lively and walkable. Microbrews and gourmet coffee are available in every metro area now. Even cities like Indianapolis are installing separated bike infrastructure. Pretty much everything that once made Portland somewhat unique is available everywhere now. I expect the mass migration to Portland will pass
I met some guys who just moved here from California (along with their entire company), and they all seemed surprised at how expensive housing was here. Maybe word will eventually get out that the Portland isn’t what it once was.
Portland is still the most livable city on the West Coast if you look at the cost of housing, taxes, ease of movement around the city, arts, food (services), etc.
What about Bellingham? San Luis Obispo? Arcata? Hell, pick the one that you think might come _closest_ to Portland, and I’m packing my bags and heading there.
I do hope you’re right. The role that internet hype plays now in Americans’ itchy feet has really done a number on Portland. I think we’re the textbook example of Americans Moving in the Modern Age. Everyone thinks they can do better now, and all have the attention span of a flea (thank you, internet). Everyone feels entitled to the best in life. I deserve it! Everybody’s breaking up with their perfectly good cities because they see a hotter/cooler city over there in the corner. And–here’s the difference from the past–they’re willing to uproot their entire lives and move, often far away from family and support networks, for formerly-regarded-as flimsiest of reasons (popularity, restaurants, lifestyle).
It’s a radical change from the way people used to think about moving, which is to say folks mainly only did it for jobs or family, if they had to. Because moving is disruptive and a real pain! Our rootlessness and quickness to make such a major life change now is a little scary and symptomatic of, I posit, our increasing inability to concentrate and stick with anything, and our inability to delay gratification (again–thank you, internet). Many people that come here now have such rosy tunnelvision and such confidence, internet hype-bred, that Portland will make their lives just the best. I always wonder–do you see what I see? ‘Cause I once loved this place and it really was great but I can barely stand to go outside the house without girding my loins and taking several deep breaths now. Daily life here now is a hassle of a magnitude it never was before. Many of us lived here because of that very lack of hassle, that easy pace and breathing room. That’s all in the past, and the crowding and hassle will only get worse. Yet the Portland hype seems to blind a lot of people to everything but what they want to see. Or they just escaped from, many of them, places even worse.
p.s…an aside…people’s forgetfulness and denial about the BIG changes in our weather here seem part and parcel of that blindness. I’m ready to slap the next weathercaster who pouts about our one minute of fall rain and crows that ‘thank gud, the SUN is coming back!!’ Apparently they missed that we just experienced the worst, most unending, hot, miserable summer ever…and the wildfires, and the drought. Their collective amnesia really puzzles and irritates me, but it goes right along with (and really, I think they’re playing to) the weird delusional nature of so many people here now, re: Portland. I still hear people talk about Portland’s ‘9 months of rain’. Seriously: when was the last year THAT happened? And do you pay attention to the news? Portland used to have a very accurate, sort of self-deprecating, wry view of itself. Now if you express anything like dissent, a million people will descend on you like a swarm of wasps and sting you with their Positive Thinking shame stingers. 😉
The outcome of 70 years of building non-walkable, non-bikeable, non-urban places. The small amount of intact pre-war neighborhoods we have left in this country are experiencing too much demand on a very limited supply.
It seems to me that requiring a one-year notice of rent increases will just lead landlords to give that notice every year, regardless of what they plan to do. Same thing with rent control — it hasn’t increased the number of affordable apartments in NYC and SFO to meet demand, just made people that have them reluctant to ever leave them.
I’m not claiming to know the solution, but the ones proposed so far don’t seem likely to solve our problem. Promise King seemed to have a much better point that city policies should focus on raising incomes so people can afford higher rents, rather than importing people to displace current residents.
Maybe if all the NIMBYs didn’t protest every new apartment building and demolition that goes on, we’d have more available housing! They’re already talking about imposing more restrictions and more “alerting of neighbors” for Division. The last thing we need is to add even more red tape to development.
That and we need inclusionary zoning.
As a NIMBY myself, I’d like to point out that I’m all for new apartment buildings and increasing density. What I hate to see is a gracious older home being demolished to build a new single family home that’s a cynical exercise in square foot maximization. It’s possible to be pro-density and still be against replacing relatively affordable $350k fixer uppers with $650k cardboard boxes.
I think “NIMBY” as used on this site just means someone who likes having houses in their neighborhoods, and doesn’t want everything to be all hard and concretey. As you said, you can be totally in favor of density and apartment buildings, and still be a “NIMBY” for suggesting they shouldn’t be everywhere.
Seriously. Can we stop with the whole “NIMBY” thing. Many different people have a diverse set of reasons and opinions on issues that likely differ from yours because they have a different life than you do.
Cities are dynamic and have been ever-changing since the existence of cities. Deal with it.
My point being don’t oppose change just because it’s different. We all need to work together on solving these issues and we shouldn’t let a few vocal people afraid of change get in the way.
“NIMBY” and “deal with it” don’t sound like the clarion calls of working together.
A group of “NIMBYs” almost removed a long-standing bike-friendly, density-friendly board member for personal issues. I am absolutely willing to work together, but it seems they are the ones unwilling to compromise.
I see… so “those people” are unwilling to compromise because “they” voted against “us” in what most sane people would consider nothing more than a neighborhood pissing match.
Calling it a “pissing match” implies that there are no outside consequences. Hardly the case here.
deal with it = race to the bottom; no thanks.
Perhaps a bit harsh choice of words, but I’m just getting tired of anti-density people showing up to NA meetings and basically opposing everything. We have two choices: either keep building and quell a meteoric rise in housing prices, or price everyone but the super wealthy out of the city. Which one is better for our city as a whole?
Your presumptions ignore the real cause for sky-rocketing real estate prices – easy availability of home loans. This situation is caused by the federal government.
Central portland is literally carpeted with older apartment buildings. However, few of these buildings can be redeveloped due to absurdly NIMBY land-use policies (promoted by neighborhood associations in the 70s).
Many have been fixed up and turned into quite nice places, even somewhat attractive from the outside. So your statement may or may not be true, depending on what you mean by “redeveloped”.
Replacing a 2 story building with a 4-6 story building.
NIMBY is an acronym for not in my backyard. It’s shorthand for those who try to prevent development in their backyard (e.g. neighborhood).
Correct me if I’m wrong but as far as I can tell this seems to be your position.
Labeling people is a good way to avoid having a real discussion and acknowledging that there are multiple valid points of view.
Oh, I agree. If you’re going to demolish a house it should be beyond repair or pretty close to; and the replacement should increase density. It’s possible to build duplexes that look like single-family homes.
On the other hand, as a homeowner, I certainly wouldn’t mind more mixed-use apartment complexes in my neighborhood! The problem is that most neighborhood association attendees are homeowners, and renters are vastly under-represented. Renters are the primary beneficiary to increased hosing density, and their voice is currently not being heard — being overwhelmed by NIMBY, FYIGM types.
Until we have vote-by-mail for all neighborhood associations, this issue will continue.
I support demolishing single family residences in exchange for denser housing just about everywhere. Single family residences are the “hummers” of housing stock.
Death to Bungalows!
“Single family residences are the “hummers” of housing stock.
Death to Bungalows!”
You sound like Brezhnev!
My cohabitant loves bungalows so I’m in trouble if she reads this comment thread.
Some people want to live in houses in denser walkable cities, hence the appeal of pre-WWII neighborhoods. I bought in my neighborhood specifically because I could walk and bike everywhere. Transit works great here too. Post-war sprawl, on the other hand, is another matter entirely. Why not “death to McMansions” instead? 😉
No need to demo old houses that were probably built better than new construction. We have plenty of open space and crappy warehouses from the 70’s we could tear out.
This was an interesting food for thought article, looking at civic participation amongst homeowners vs. renters.
A couple of interesting findings in the study:
“Homeowners are 1.28 times more likely to become involved in a neighborhood group and 1.32 times more likely to join a civic association. However, homeowners are no more likely than renters to belong to a sports or religious group.”
“Comparing short-term renters to long-term renters, the researcher finds that residential stability (staying in a home for more than five years) increases the likelihood of electoral participation, but does not affect participation in membership groups.”
“The likelihood that a homeowner will vote in a local election is 65%, compared to 54% for renters. For national elections, the difference is much smaller: The probability that a homeowner will vote in a national election is 86% versus 83% for renters.”
“Education remains the single most important driver of political participation and group membership, according to a 1995 study.”
In the zipcode I live in (97214) renters on average stay put longer than homeowners.
I am with Adam on this one. I am a homeowner but would love to see more people in the neighborhood in high density apartments etc. More people means more life, better businesses, more bus frequency and so on. More people is why New York city is one of the most popular cities in the world. People love people.
I like specific people: not the aggregate. 😉 That’s why I stayed in my home city of Portland (as it was). And that’s why my friends (and so many others) moved from NYC–because of people people people people. We don’t all want to live on top of one another. Portland doesn’t have the skeleton that NYC has for a like kind of development and density.
Those houses may be bigger but they are not “cardboard boxes” when compared to what they replace. As someone who has owned 3 homes built before 1930 2 of which have had serious foundation issues older homes are often far less well built than the modern code compliant homes that are replacing them.
While I believe that modern builders have time and money pressures that did not apply to home builders 100 years ago and that those pressures influence construction (I have seen some half-assed shortcuts with contemporary homes), I agree that the best modern homes are more robust than older houses. When I said “cardboard boxes” I was thinking more about their distinctive and unattractive profiles. Having said that, the houses built 100 years ago are still in use today — do you think the houses being built today will still be standing and usable 100 years from now?
Yes I do, the cement they are using on the foundations is far better than what was being used 100 years ago. The foundation on my last house used cement that was full of river rock, which is great if you want it to crumble but not so good if you would like it to stay together. I have spent a lot of money on earthquake retrofits and foundation repairs on my current house trying to make sure it isn’t going to fall down, realistically I am not sure I saved much over what it would have cost to tear it down and start over. One thing that will make me come out ahead is that I will still be paying somewhat less in property tax than I would on new construction thanks to our unfair assessment system. New homes aren’t all built fantastically but neither are many older homes in portland, and in general just building something to current codes means it is better built than anything from 100 years ago. I agree that the molding on an old home is often fancier and the look of the buildings more interesting, but that doesn’t make them well built when you start pulling off the siding and looking at what is inside.
+1 for the river rock. Or, rather, -1.
And during a remodel of my 100 year old house, we found one corner was held up with a single nail.
Hah, just try doing that with a crummy modern nail! I tell you, they built nails to last 100 years ago! 😉
I agree that something needs to be done to create more affordable housing options for renters. Hpowever, I fear that the policies suggested in the article will drive landlords to convert to AirBnB or other short term rentals in order to allow themselves more flexibility. The city’s development policies around ADUs already lend themselves to vacation rental use. We need more multi-family (2-3 family) housing in neighborhoods, not just elite studio apartment living along commercial corridors. Although, I will also add that I’m not opposed to more apartments being built too, as I think an increased supply will help over time. The market will respond with lower rents if they go un-rented. As long as newcomers can afford to rent $1400-1800 studio apartments on Division, developers will continue to want to build them.
There is a real problem with housing affordability. It is exacerbated by people who live in an outer suburb (and don’t know much about bikeable neighborhoods), and those who purchased a home 10 years ago and claim that anyone who has a problem with affordability as making “shrill cries” of this problem. (Hello davemess and 9watts!)
Ha. I bought 4 years ago. I saved up (3% down) and bought a semi-fixer (for $126K) in a quite undesirable portion of Portland because that’s what I could afford. I didn’t like what I was seeing available for rent in the “trendy” neighborhoods, so I compromised. And I still ride my bike to work every day.
I completely agree that there is a problem (but there are still deals out there, HINT look in Lents). But there isn’t just one possible solution. Cities all over the world have zoning maps. It’s not crazy to want to limit certain developments in certain areas. But we can definitely have a debate about what that means. And frankly I think reduced wages in Portland are just as much of an issue as housing shortages.
“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.”
Please explain to me what I wrote here that is incorrect (granted housing has gone up in the last 4 months). Why does anyone deserve to live in any hip neighborhood that they want?
I think you made a good point before. People are going to continue to be pushed further out to live, therefore I’m a big proponent of continuing to improve our bike/transit infrastructure in the further out areas that most of us can afford to live.
Similar mindset, different approach here. I don’t know why people speak like they deserve to live in a certain area. You make due with what you can afford/have. If that means living further out and commuting a bit more so be it. Take a look at your spending habits and I bet most people can cut back here and there on frivolous spending to add to their housing expense.
I’d love a house on the beach in Cannon Beach to watch the sunset every night, but I can’t stomach the commute or the $1 million price tag. So I live in reality and my wife and I bought a house that fits our needs/desires. The location wasn’t a huge compromise (Hillsboro) due to access to MAX and some very nice biking routes to work 9 miles away.
I agree with you (for once :-)). But there is a subtlety you are leaving out.
(1) I think your argument is valid for people who wish to move here from who knows where. But
(2) I don’t think it is quite so simple for people who have always lived here, or who are being priced out. That to me is something that rankles, that seems unfair. To tell those people: tough, you gotta move, seems profoundly unjust. Why should they be the ones to bear the costs of other, richer people moving here?
It is exactly this dynamic that I think we need to keep in focus. Incentivizing more people to move here has exactly this consequence: why do we welcome new people while looking the other way when those very new people displace those already here? To whom do we have a greater obligation? – and please explain your answer.
Maybe when 2-story camper vans start taking up all of the curb parking next to the expensive car-free apartments, those rents will go down a bit?
What constitutionally permissible form of discrimination in favor of existing residents do you support? Ideally one that would allow them to move from one part of the metro to another if they want, to move into a larger apartment or house in a few years because they get married and the one bedroom they’re in now is a tight fit to raise a family, that allows them to leave the metro area for a few years, say for school or to spend the last year or two with a dying relative, or just to be somewhere else for a while etc….basically, a system that isolates whomever you think is enough of a local from the current and any future increase in prices.
I know we’ve discussed this before, if you’ve addressed this elsewhere I’ve either missed it or forgotten. Setting aside the morality for a moment, I don’t see how it could be done.
As to who is owed a greater obligation…say someone gets priced out of Portland, and so they move to Salem or Boise. Do you think your proposed treatment of potential newcomers to Portland is a fair way to treat that ex-Portlander in Salem or Boise? If someone is born in Coos County (8.1% unemployment, never really recovered from timber bust, right?) and has a hard time finding work and wants to head to Multnomah (5.6% unemployment), should they be told to go elsewhere in favor of all those who were here first? Or even what about a high paid tech worker that couldn’t afford to rent in San Francisco or Seattle? As someone who didn’t have the good fortune to be born where I wanted to live, I guess I just don’t see it as black and white as you do.
“What constitutionally permissible form of discrimination in favor of existing residents do you support?”
I freely admit that I don’t have all the answers. But what I do know is that our present incentivize people to move here, sabotage any discussion of limits, refuse to acknowledge that exponential growth has to stop one day, kick the can down the road approach is completely inadequate.
Quite apart from any practical difficulties in implementing restrictions, policies that discourage rather than encourage movement, buying and selling, would you agree that incentivizing additional people to move here places an unevenly distributed additional burden on our region’s poor and on renters? Would you agree that exponential growth in all things (people, economic activity, impervious surfaces, built environment) cannot continue unchecked, no matter what freedoms of movement our Constitution guarantees? If you agree with either of those, then why do you and most here persist in refusing to discuss ways to mitigate not just the shortage of housing, but the longage of demand for housing? Pointing to a statute and saying, “well, see, you can’t do that” is not very constructive when people who live here are bearing real costs of these policies we have in place.
There is so much room between North Korean style restrictions on freedom of movement, which you and others keep invoking in response to my comments here, and (a) discontinuing incentives and subsidies to in-migration at the local and state levels, (b) putting in place disincentives (not proscriptions, mind you) to relocating, or (c) exploring—as this article begins to—the plight of those who bear the costs of all this upward pressure on housing in our region. We
“If someone is born in Coos County (8.1% unemployment, never really recovered from timber bust, right?) and has a hard time finding work and wants to head to Multnomah (5.6% unemployment), should they be told to go elsewhere in favor of all those who were here first?”
Instead of ‘told to go elsewhere’ how about ‘why do you have the expectation that anywhere you’d like to move will make room for you at prices you can afford?’ Because this attitude comes up against hard limits folks here don’t have much appetite for discussing. If one in eighteen people already here is unemployed, why should our policies incentivize and reward in-migration? Why should our elected officials bend over backwards to build new housing to accommodate your example? I still haven’t heard anyone here articulate an answer.
“I guess I just don’t see it as black and white as you do.”
I see this as a dynamic, under-explored, issue with lots of nuances that only appear if we dig. There is nothing black and white here except perhaps our collective resistance to talking about more than just one side of this issue.
And I do appreciate your pushback, your engaging me on this issue.
“discontinuing incentives and subsidies to in-migration at the local and state levels”
Can you expand on these? I don’t really know what they are.
>exponential growth has to stop one day
I’m more optimistic than you are about the ability to continue to increase the carrying capacity of the planet. 7 billion isn’t sustainable today. But might be at some point in the future. I don’t see that as having much to do with the ability of the Portland metro to absorb more people though. The area can’t support an unlimited population, sure. But a doubling of population over the next few decades doesn’t seem impractical.
>North Korean style restrictions on freedom of movement
>‘why do you have the expectation that anywhere you’d like to move will make room for you at prices you can afford?’
If there isn’t a way to distinguish between a sympathetic character who was born here and one who moved here a month ago, then how do you make this second statement to only one of them?
>incentivizing additional people to move here
There are incentives for construction that you’ve pointed out before, in the report from Fodor. But that’s not the same as incentives for people to move here. Because the people who are new to the region will often move into an existing structure, and many long time residents will move into new construction. The only incentives to move here I’m aware of are things that most Portland residents seem to want. Improved transit service and cycling facilities for example. Decline in crime. Improved job prospects. And yes, if those improvements lead to an increase in rents they have a negative impact on the poor, and on renters generally.
But if you cut growth, say you kill off a few proposed apartments and subdivisions, many of the people new to the region who would have moved in there will still come. They’ll just buy or rent in an existing structure, driving up prices, exacerbating the impact on existing renters.
Something worth asking is why do subsidies for construction exist? How did the region ever develop before there was anyone to pay them? There are significant disincentives to construction in place today. The areas where growth in housing stock is cheapest, and most in demand, it is often prohibited. Instead of continuous incremental growth in existing neighborhoods that doesn’t need cash subsidies, that can be done in an economically sustainable fashion and produce the housing most in demand, growth is pushed to the fringe, or to a handful of arterials. This drives up prices considerably.
You see incentives for growth and want them replaced with disincentives to growth for the sake of existing residents that need a helping hand. I see disincentives for growth that are hurting those existing residents.
This argument is popular with the all of the “haves” (e.g. those who already own real estate). Republicans love this type of “just be more frugal, do without basic necessities, and work harder” argument. In fact, McDonald’s used a similar argument on their McResource site, mentioned here: http://www.businessinsider.com/mcdonalds-to-employees-return-gifts-2013-11
This is NOT a problem of household budget. Fannie Mae & Freddie Mac limit the total of PITI to 28% of gross monthly income. So, TWO people (each with a BS degree) making a total of $75,000/yr have a GOVERNMENT IMPOSED limit of $1,750 for total housing expenses. If you exceed this by much you will not be approved for a loan.
So, regardless of personal spending we have the following monthly limits:
$300 real estate taxes
$75 homeowners insurance
the $1,375/mo mtge (with 5% down)
= a $220,000 mortgage + 5% = $231,579 MAXIMUM HOME PRICE
There are not ANY 2 bedroom homes at that price within 6 miles of downtown. Oh, and I guess you’re right . . . my “entitlement” problem is that I want a ~decadent~ 2 BEDROOM home for $230k.
@davemess, the very edge of Lents is 6.5 miles from Downtown. That’s where your statement is incorrect. The majority of Lents is in excess of 7 miles from downtown.
“regardless of personal spending”
Personal spending can also allow you to save for a bigger down payment which would allow for more purchasing power, so I wouldn’t call it inconsequential.
Regardless I think you need to talk to some different mortgage lenders.
There’s not a ton (It’s also getting into the low real estate time of the year, and we’re 4 months past when I made that original statement (through a summer that has seen a huge amount of house appreciation), but there are some. I do agree that the market is tough right now. Means people might have to move further out than they want to (or not buy).
Again, I think your example (people with BS’s making $37.5K/year) highlights that low incomes in Portland is a major issue.
Good luck in your house search.
Again, I think your example (people with BS’s making $37.5K/year) highlights that low incomes in Portland is a major issue.
This is driven by the same dynamics that are pushing rents higher. Young, educated people coming here in great numbers, driving wages down and rents up, mostly to the detriment of people already here who fit into a similar niche, and are competing for the same resources.
That’s not the whole story, but it’s a big part of it.
@davemess . . . as for personal spending, you put down 3% on a 126k house = $3780. I have saved 4 times that much for a down payment and am still having trouble finding anything in a walkable/bikeable neighborhood.
For what it’s worth, my neighborhood was not very walkable when I moved here (it’s much better now). Sometimes you need to be a bit ahead of the curve when picking a location. I feel confident that more of Portland will become walkable as people work to improve their neighborhoods.
Actually I put down 10%, but 3% was the minimum.
Sadly in this market, you’re just going to have to expand your definition of walkable and bikeable. (I’m sure that many in Portland would scoff at my home’s walkscore of 68 and bikescore of 79, but it works for me).
And I will reiterate that I think you should talk to some other mortgage lenders, because that quote sounds pretty low if you have good credit and low debt.
” TWO people (each with a BS degree) making a total of $75,000/yr have a GOVERNMENT IMPOSED limit of $1,750 for total housing expenses. If you exceed this by much you will not be approved for a loan.”
I’m missing something. If you’re making that kind of money, why not save $50,000/yr until you have enough to buy the house without a mortgage? I’ve never made nearly that much! Ten years = $500,000. That buys a lot of house, even today in SE Portland, or wherever.
How in the world can you save 50k on a 75k salary after taxes and living expenses?
Well, how much are your living expenses per year? Could you get them down to 25,000/yr for a 2 person household if you were trying to save to buy a house? I can/could.
Oh, yeah, taxes. Like I said, I’ve never made anywhere near that kind of money – what are taxes for two people with a combined income of $75,000/yr? Whatever that figure, subtract the taxes from the $50,000 I was assuming you could save each year. How about $40,000/yr? $400,000 after ten years will still buy a lot of house around here.
@9watts . . . for a household of 2 people with no dependents and $75k/yr GROSS income, the NET is around 55k-58k. That is the actual money available for living. Subtract healthcare ($700/mo), rent ($1250), utilities ($150), groceries ($800), student loans ($650), transportation ($150), miscellaneous ($250), you have around $700/mo left.
That can be around $8000/yr that can be saved. HOUSING PRICES ARE INCREASING MORE THAN $8000/yr.
Thanks for those averages and the tax rates. Very helpful.
But I also think this is precisely where averages can be most unhelpful: none of us are average. My point was that if you try, you surely can save real money on that kind of income. I’m 44 and live in a three person household. While inflation is a factor, and house prices (here) are certainly spiking, in over twenty years of tracking every penny, we’ve never spent more than $35,000 in a given year for everything, and for the past ten years have averaged $31,000. While I was in graduate school (1997-2004) and my wife had a regular job we saved between $600 and $1,600/mo, averaging $10,000/yr. Our combined net income in those years fluctuated between $25- and $40,000.
oregon coast neskowin, pacific city netarts, lincoln city, tillamook- 200,000. not a million. they have been so for 4 years at least.
what davemess said.
I have a solution: build more housing. We are building a lot now, but not fast enough or at the quantity needed, namely because zoning codes are still too restrictive, and approval processes take too long and aren’t streamlined. There shouldn’t be any exclusively single-family residential zones in inner SE Portland west of 39th, for example, especially considering that existing single family zones in this area have a ton of fourplexes, garden apartments, and those “Motel 6” style apartments, all of which were built before said zoning codes went into effect (although I’m not sure about the “Motel-6” apartments, as they were built in the 60s and 70s). Apartments up to 6 stories high should be permitted anywhere as far out as 39th Ave. If we have to compromise, convert existing single family zones to multifamily that allow two to three story apartments. Portland is a city now, not a logging village.
Fortunately, the mixed-use apartment building boom isn’t a Portland-specific phenomenon, but is happening all over the U.S., even in “un-hip” cities like Omaha and Fargo. Most medium to large cities are in the process of becoming more dense and urban in and around the core, which should take some of the pressure off of traditionally “cool” cities like Portland, SF and Seattle. The recent problem has been that an unprecedented number of people have wanted to enjoy the convenience of living close in, and only a very small number of U.S. cities have traditionally been able to offer the sort of urban experience that they seek. That’s rapidly changing. There now countless cities in the U.S. where one can live within close walking and biking distance to breweries, coffee shops, cafes, work, etc, and I foresee that removing some of the population pressure that Portland will have to deal with, as Portland will no longer be unique in most of the respects that it has been in the past.
This sounds a bit like the vision pushed in the 1970s that if we would just build enough highways, our transportation problems will be solved. The idea of razing inner Portland and replacing it with 6 story buildings will seem just as crazy when the current housing panic passes (which it will).
Your 2nd paragraph, on the other hand, actually makes sense.
Except that highways building encouraged urban sprawl while increasing housing stock in the central city discourages urban sprawl.
chris’ vision is not the only solution to sprawl, just as highways weren’t the only solution to traffic issues. Compared with most cities, Portland has done a pretty good job containing sprawl, without resorting to destroying what many regard as one of its great assets.
The UGB has been expanded dozens of times and there has been explosive growth in areas close to portland but not in the rural reserve.
“increasing housing stock in the central city discourages urban sprawl.”
Not always… if it pushes the employment of the central city people to the suburbs.
“This sounds a bit like the vision pushed in the 1970s that if we would just build enough highways, our transportation problems will be solved”
The difference between building highways and building housing is that that access to highways is essentially free. You will have a shortage of anything if you produce it and give it away for free. If highways were tolled based upon whatever rate is necessary to keep traffic flowing smoothly at any given time, then the problem with congestion would be resolved.
“The idea of razing inner Portland and replacing it with 6 story buildings will seem just as crazy when the current housing panic passes (which it will).”
How do you figure? Once the boom is over, we’ll have a renters market, and lots of close-in housing to choose from. I think we will be in a far better situation because of the new construction.
Also, I’m not advocating something similar to 60s/70s era urban renewal, where entire districts were condemned to demolition. I’m not saying, “Demolish all single family houses and replace them with 6-story apartments”. I’m advocating loosening zoning, such that property owners will be free to do build multifamily housing if they wish. Most of the housing stock would probably remain bungalows for a long time. Although current demand is high, I doubt more than 1-2 percent of bungalows would be demolished and replaced if zoning codes were relaxed.
But even if it ends up being 5-10 percent, who cares? But maybe I’m just weird, in that I don’t think that everything old is automatically worthy of being preserved in amber for eternity.
I was referring more to the utopian grandeur of the vision, not so much its economic underpinnings.
“I have a solution: build more housing.”
That only happens when you are giving away the product for free, like with access to highways.
Are you sure?
But what’s to stop me from buying more of that new housing and renting it at market prices? If the demand is there for ‘rental’ housing, opportunist landlords won’t have to compete that hard with transient renters who aren’t buying up condo units in droves even though rates are down, because banks still aren’t lending much on shared-ground properties.
Plus, where’s the new housing going to go? Suburbs? No, traffic sucks. Infill? NIMBY!
“But what’s to stop me from buying more of that new housing and renting it at market prices? ”
A simple deed covenant that specifies only “owner occupants” are allowed to reside on the property for the 1st 10 years. This would prohibit any rental of the housing unit until that 10 year time period has expired. This works perfectly since the deed covenant applies no matter who owns the property.
Ah yes, it can work, as well as HOAs amending their bylaws to restrict rentals with a super-majority (67%+) of votes (ORS 100.410). Good point! (I do know of a case where an owner with a rental restriction challenged it under ‘hardship’ circumstances and the HOA was ordered to allow her to rent the property for a number of years, though).
(Condo owners (or potential owners) should familiarize themselves with this: http://www.oregonlaws.org/ors/chapter/100)
There is a significant legal difference between a deed covenant and HOA bylaws. A covenant attached to a deed is only able to be invalidated if it is deemed to be in conflict with federal or state statute (e.g. many deed covenants in the 50’s prohibited “blacks” from residing on the property, this obviously was not allowed to stand). I cannot speak empirically, but I do not believe an owner could claim “hardship” to bypass a deed covenant.
I sold my Rental house that I owned for 5 years because I was unable to pay the taxes, upgrades (sidewalks), and payments anymore on a fixed income (social security) It was $1500 a month for a 3 bedroom, 2 bath with garage. I was also paying the water, sewer, heat, and landscaping. I pretty much broke even over 5 years. A Trump I am not!
The Trumps are running for office. That is how they are paying for it. Raising rents!
Sounds like you paid too much for your rental or charged too little. As a landlord, you’re only supposed to pay for garbage…not all that other stuff. Ideally, you make 12%/yr on rentals.
The 12.5% was breaking even.The rest was because I wanted to keep the renter for an extra year or so. It started out with 3 female college students, then 2 and a baby, then 2 and 2 babies, and finally 2 girls, 3 babies and a guy. Enough was enough. It took $5,000 to fix it back up to sell.
I’m curiously about your sidewalks. Were those just repairs, or were you required to build them through a LID?
Repairs required by the city. $1600 for 12 feet after it was done by the city.
One more thing. It had an old growth tree I was worried about on the south lawn. The trunk was 8 foot in diameter. The city would not let me trim it. I was worried a strong wind might blow it over on the house and kill someone.
$1500/mo rent for a three bedroom house seems awfully low. Where was it?
Solidarity with my renting sisters and brothers.
We need inclusionary zoning, rent control, increased spending on affordable housing, and increased legal protection of tenant’s rights NOW!
I’m in Briana Winterborn’s situation (4th photo). I’m not a NIMBY or an FYIGM. I would love to be part of the solution, but I don’t see a way.
I bought in Sabin almost 20 years ago. I’ve got a 600 sq ft house which has no market value, on a 5000 sq ft lot which has less than you’d think. If I sold today, the house would be torn down tomorrow, and there’s nothing I could afford to buy with my equity that would give me any advantage over my current situation. I’m not in a position to up stakes and go to Fargo or wherever the latest affordable place is.
The unused half of my lot could hold four or five detached ADU-type rentals, or a small, well-designed apartment building, but I wouldn’t be allowed to build them even if I could personally afford to.
But I could subdivide. Except: 1) I’d have no control over what happens on the sold half-lot, and a developer would almost certainly buy it and add a single McMansion. Density increase: one small, rich family, probably with two cars. Affordable housing increase: less than zero.
And 2) Property taxes on my half of the lot would be reassessed and promptly quadruple (or more). Any gains I made on the sale would go to pay that tax over the remaining years of my retirement. I’d be left with only a half-size lot (remember, the house has no value) to sell when I need to go into assisted living or whatever. It might or might not be enough.
So I’m financially locked in to a 600 square foot house on a 5,000 square foot city lot. The wildlife refuge and squirrel walnut-farm out my kitchen window is pretty, and a nice carbon-sink for the city. Otherwise, I’m just sitting on some developer’s goldmine while they wait for me to die. Which might be a while.
A touching and salient comment.
Well, your current house is sized to be classified as an ADU…if you could do that then you could theoretically build a duplex or maybe even a triplex on the other part of your lot. The challenge, as you say, would be funding the construction.
Thank you for taking the time to write about your predicament – it’s enlightening to hear about the out of kilter situations our housing market is creating.
Agh, Anne. That is disheartening. 🙁
Well, for me personally, it’s fine–I mean, I have a place to live, close-in, that I can afford. But it IS disheartening to wonder how many other non-NIMBY homeowners around the neighborhoods would be glad to leverage their property in favor of density but can’t.
Wait, there’s that word again. Does NIMBY in this context mean someone who doesn’t want to redevelop their house for whatever reason?
To me, it’s come to mean basically “anti-density,” but I’ll admit it’s lazy shorthand. I personally would welcome 3-4 new apartments literally In My Backyard.
Is it possible to be pro-density and still want to impose some limits about what gets built where?
the entire problem exists because there’s a central city…
they took all these townships and merged them into a city… they all became mini suburbs to Portland… they weren’t allowed the build the 20 story skyscrapers that downtown was allowed…
break the neighborhoods into separately run sub-cities and let them rebuild their cores that they lost when annexed… let them build huge office and apartment buildings along 33rd, 42nd, 52nd, 72nd, etc…
there’s currently no area in the city comparable to downtown… that’s a problem since now you have tons of people who need to travel to where the action is because the city annexed the action out of all the neighborhoods…
decentralize the city… spread the love…
Parkrose is trying to do this and wrestle free of Portland’s grip. We get absolutely NOTHING from being annexed.
I wish Parkrose still had their theater, it could be really cool with a little effort to make killingsworth/sandy more walkable. With the transit center right there it makes sense to put up some apartments nearby. Actually I’d like to see the park and ride converted to townhouses, people who actually lived at the transit center would probably use transit more than folks who drive in from washington and take the max downtown.
I think the opposite would happen. If the individual neighborhoods were autonomous, they’d be more likely to become like Palo Alto or Lake Oswego and decide to build nothing.
In looking at the graph near the bottom of the post, it shows generally fewer than two people moving to Portland for every unit built since 2000. How is the rental unit shortage caused by people moving here? Are most of the units that are built designed for one person?
I think we have people being priced out of the neighborhood they want to live in. That’s been happening forever. Cool people create cool neighborhoods and then other people want to live there. New cool people create a new cool neighborhood in a different previously undesirable place and the cycle repeats.
Many of the new units are occupied by one person. Once people get married and start families, those apartments seem less attractive.
“Once people get married and start families, those apartments seem less attractive.”
This kind of sequence is far from common anymore. More than half of all households in the US are one and two person affairs.
Hence the answer to B. Carfree’s question about why supply is lagging inmigration. It is primarily young, single people coming, rather than older, more established folks.
When the most recent generation of newcomers starts to get married/whatever (I think most will), we’ll have an oversupply of studios and a shortage of 2-3 BR units (because almost none are being built at the moment).
Some folks think that as baby boomers age a trend towards widows and widowers and a desire to no longer take care of a yard may actually mean an even greater shortage of smaller apartments than we have now. Census data says that the current household in Portland averages only 2.49 people the median is likely lower as some households are much larger.
Census 2009-2013 ACS gives this breakdown on household size for Portland City:
35% 1 person
34.4% 2 people
14.1% 3 people
16.5% 4 or more people.
Thanks for the data, the median household appears to be 2 people.
Yep. Cool people should buy instead of rent? That would, of course, be totally square.
One piece of the puzzle not included in that graph is how many units of housing have been torn down during the same period. The number is not zero so the increase in housing units is not equal to the number of permits for new construction issued.
There are still lots of affordable places to live east of 82nd. This entire situation is the intended result of the planning that has been going on for the last 30 years. There is nothing coincidental about it.
well i’ll share my experience here.
I’ve been remodeling my home of 10 years to rent. I have 2 options. 1. I can rent it and jump through all the hoops and take the risk of having tenants degrading the property. 2. I can sell it and just put the money into any number of investments.
I really believe in my neighborhood and want to control how it develops so I opted to rent. To rent it out, after investing another 10K and 100s of hours of work I’ll initially be making about 2.5% of the value of the house per year. Given, that property should appreciate at about 4.5% per year, this yields a return of 7% per year. Now compare this to just selling the house and putting it into a conservative investment earning about the same. No work, less stress, more security.
When we start to talk about rent controls or other forced market adjustments, you shrink this margin. Why deal with it all when I can just sell it? Otherwise you force the landlord to make up the additional costs by skimping on the upkeep or being even less flexible. A lot of these types of suggestions might just result in corporate investors who come in and buy a 100 houses, hire a crew to maintain them and squeeze out higher margins with less provided to the tenants. Be careful what you ask for.
And there you have it. If you could invest the money and make ~10% or more – like you used to be able to in CDs or the stock market – you wouldn’t care so much about the backed-up toilets and having to repaint and such.
During the 2008 crisis, investors took their money out of the market in billions, and even all through the glory days since then, it hasn’t even begun to make up for the market cap. Where did this money go? I’ll give you one good guess…
I believe this analysis does not account for leverage: if you have $50k in equity in a $250k house, your profit is 100% of the the increase over $250k. If you put that $50k in the market, you only get returns on $50k.
So, if your $50k in stocks goes up by 8% in a year, you made $4,000. If your $250k house goes up by 8% in a year, you made $20k…if you’re in a hot housing market (this is a big if), it seems like homes would perform much better.
“if you have $50k in equity in a $250k house, your profit is 100% of the the increase over $250k. ”
That’s a myth. It’s not a capital gain until you sell, but you have to live somewhere, and you have to pay taxes on the gains. Meanwhile you are paying almost all of your monthly payments to the bank that owns most of that house. Over the course of a 30-year loan, for instance, that $250K house will cost you more than double that – look at your tax statements at how much interest you paid the bank in the first year and then integrate that over the amortization curve. Compound interest works just as quickly against you as it does for you… if you think you came out $50K ahead, guess again.
Also don’t forget when you ‘refi’ for that killer 2% drop in rate you are resetting that amortization curve. This is why banks usually don’t mind paying your refi fees for you. You might think a lower monthly payment means more cash in your pocket, but really it’s just prolonging your ownership of your house (and increasing the bank’s revenue off you).
Now, if you’re talking about a house you paid $250K in cash for and own outright, we have a different conversation. Subtract the taxes and transaction costs, and you get to pocket what’s left over. Then go enjoy your new move and housing hunt. Oh, and don’t forget to save the receipts for the cash you shelled out of your pocket for repairs and improvements, because you can add some of that to your $250K basis to reduce your capital gain and tax.
The smartest thing you can do is put as high a down payment on a house as you can afford, and pay into your principle as quickly as possible. (Unless, of course, you’re making killer returns on some other investment that you could put that cash into).
That $20k is before the interest bill of $6-8k that you get hit with no manner what happens to housing prices.
Mortgage interest? Should be covered by rental income – I was just thinking about the increase in home equity.
Based on the amortization curve that could even be higher. The rise in equity mentioned above is not profit until the sale is realized (minus taxes, and it can be argued you then have to buy in a better-valued location for it to really turn profitable). Plus, your equity is irrelevant when you have to shell out cash for immediate repairs.
If we’re comparing owning a rental property to investing in stocks, remember that you pay taxes on your capital gains in the stock market too.
You think rent control would have no impact on what you could sell your house for?
I was a landlord many years ago and it was not a money maker. It was a hassle and did not provide nearly as good a return on my investment as an index fund representing the broad stock market.
If you are of a philanthropic bent, by all means buy a house or an apartment building and rent it for what you consider to be a ‘fair value.’
If you think that being a landlord is a good way to make some money buy a house and try it for yourself. If you can’t afford to buy a house on your own, consider investing in a REIT (real estate investment trust) or in index fund or mutual fund that manages real estate. With some, you can invest as little as $1000. If you do it through an IRA, you can sometimes start with as little as $50 per month.
Have at it, folks; put your money where your mouth is; you too can be a landlord. You can choose to get rich or be a ‘fair” landlord; it’s your choice.
“many years ago… ”
Key words! You are so right in that timing is everything (and that landlording is a hassle ;).
I was a “fair value”* landlord up until 2008 when my option was to sue a broke tenant for eviction, or displace him under “hardship” loopholes in the law (we actually lived together for a short time – it was “philanthropic”, but also strategic).
Long story short, I made a ton in equity over that time but not in cash flow – which is actually the goal on a tax return. Today my capital outlay would of course be higher, but my cash flow would be much better guaranteed than the index funds you speak of – and as Redhippie points out, sometimes higher (particularly in the case of long-time ownership). It’s definitely a better ROI if you own more of it than the bank does.
The popularity of REITs are also a reason why renters are having a harder time getting hold of properties than landlords are. The RE-backed investments you talk about became a “safe” re-entry for the folks I was referring to in my previous comment to Redhippie. Plus, as you point out, you can use SEP and IRA money for them. (TICs – or “Tenant in Common” ownerships – have also become a worthy investment for SEP/IRA funds).
*BTW, I really like your term for it. Unlike my girlfriend of those days, I didn’t raise my rents with the market (except maybe a little on turnovers), as my costs were pretty fixed and I valued my business relationships with my tenants. She was plagued with constant turnover, has endured lawsuits (she still rents under the shackles of the 1031 exchange), and had one tenant completely trash her rental house and then stalk her and vandalize her private home. YMMV… 😉
Everything I’ve read suggests that you NOT hold individual real estate in an IRA.
Among other issues, you or your family members cannot have anything to do with managing it; that must be done by a separate entity. There are also issues when making repairs or upgrades (possibly an excess IRA contribution for the year in which the upgrade is made). Finally, if you get to the stage in your life when you are required to make minimum required distributions, you may have to sell the property. Better check with your financial advisor and accountant before you hold individual real estate in an IRA or SEP. Mutual funds and REITs don’t have those issues.
Absolutely! I never suggested holding deeded property in a retirement account, but shares in REITs, TICs, or mutual funds… where the deed is not in your name. They can offer you security that bonds no longer can – thus good for fixed income. I suspect many boomers hold shares in real estate in their managed portfolios that they don’t even know they have.
“Evicted”? Does that mean they were kicked out in the middle of a lease or just not given the option to renew? It’s my understanding that eviction is actually quite difficult. Tenants could sign a lease for longer than a year, but most don’t want to and I probably wouldn’t give a discount off rent to get into that deal or sign onto a 5 year term with a new tenant. If you want stability, someone is going to have to pay for it.
For keeping the bike/walkable part of town affordable, I think you might want to take a hard look at who is paying so much to move there, where they are parking their luxury cars and how little they spend to keep the cars there, buy fuel, and drive them downtown. Let’s at least regulate parking and congestion before we worry about more regulations on rent.
You may have hit upon a misuse of that word. My neighbor told us she was “evicted” from her house because the landlord raised the rent $1000 in one month. My experience with eviction (not in Oregon) is that it starts with a civil filing, so you’re actually suing your tenant for the money they’re costing you by staying put and not paying – which is kinda pointless if they’re broke. I watched my ex-girlfriend endure one and it was a long and painful process – tenants do have many protections built in (and they often start with a restraining order against the landlord, preventing them from access to their own property). I avoided one myself with negotiations using a registered mediator.
Many leases can be terminated following a sale.
The argument for raising rents goes something along the lines of ‘the cost of rentals settles at what the market can bear’. I have a hard time believing that the Portland market can bear anymore increases, especially when you consider what the average household income for the metro area is. Food insecurity is rapidly growing throughout the entire state; now you can attribute that to rising housing costs, flat wages, or both. Personally i think it’s a bit of both, but mostly rising home prices and rents. The demand for more housing is clearly there. Within the consumer capitalist paradigm, that means more supply is needed. Unfortunately it seems that very little of what’s being offered in terms of new construction is modest by any means. Whenever i see a new apartment project under construction i make a point of looking it up to see what it will be like. Without a doubt, most new builds come with high end finishes. Cheap and reasonable housing is something that isnt being built in the city proper anymore, the profit margin isn’t there.
Personally, I think the state needs to step in and finance and run apartments. Housing is something that is commodified no differently than oil or pork bellies, I think its criminal. If the state were to step in and build/buy at least 25% of the rental stock and rent the units out at a rate that covers administration and maintenance, a serious dent could be put in the housing problem.
The whole anti migrant sentiment is silly.
“Personally, I think the state needs to step in and finance and run apartments.”
The federal government already does this:
Here’s a local source, if you’re interested in developing under the program:
(I can introduce you to developers who have done this in Hood River).
Section 8 is a voucher program. Also it is a means based program, not a universal one. The waitlist for section 8 and the very few affordable units in Portland is rather lengthy. Ever looked at them?
And getting property owners to sign on and stay on board has been difficult.
A question: how quickly do you think state employees, as your landlords, will be responsive to repairs and suggested property improvements (with competition removed)?
Probably faster than the out of state landlord that owns the small complex I live in now. A tree fell on one of the buildings back in March… the hole in the roof is still there. I’ve made complaint after complaint about the state of disrepair and nothing has changed. Except for the rent increases.
I detect a general distrust of all things government.
I don’t see what the problem is. The more rents increase the more wealthy Portland gets, the more wealthy Portland gets the more revenue we generate for the city (and the state). The more revenue we generate the more money we can allocate to bike projects. Seems like a win for everyone.
I can’t tell if you’re serious or not…
Uh, how? How does increased rents for some people translate into more wealth for others??
Higher rents mean higher property values. If you already own, either your home or an investment property, you benefit.
“Higher rents mean higher property values. If you already own, either your home or an investment property, you benefit.”
. . . AAAAND that is why you have so many otherwise reasonable people (see above) defending absurd housing prices. They can almost hear their wealth increasing. They will come up with any reason (e.g. you spend too much, you have to move to the far edge of the city, you have an entitlement problem) as an excuse so they can keep others buying at these high prices and keep their equity high.
Yup, but even if you don’t benefit, just being isolated from rising costs poses a problem. Where rent control exists you have renters who don’t have to worry about spiking rents, so for them an apartment building going up next door or down the block means living next to a loud and dirty construction site, and when it’s done more competition for parking, more traffic, etc…Without rent control it means a year where your landlord won’t be able to raise you rent much because living next to a construction site isn’t great. And then once it’s done all the people that might come in to the neighborhood and price you out will have a brand new building to look at first, again moderating the upward pressure on your rent.
“defending absurd housing prices.”
No one is “defending housing prices”. What are any of us on this site going to do about housing costs? City government can’t even really do THAT much about it, let alone individual private citizens. The reality is that the prices are what they are. Some of us are simply suggesting that you accept that and find a place that you can afford to live (even if that means compromising on location).
Actually, higher prices do not usually benefit homeowners… if you want to move, sure you get more $$ for your house, but then you pay it out the other end for the new one (at a loss because buyer/seller commissions are higher). And you (depending on the circumstances) may end up paying tax on the the “profits” of the first house.
It does benefit those who sell and re-buy in a different market (as we see when Californians move here), but not those here for the long-term.
I think stable prices are better for (almost) everyone.
So, I demand a great apartment in Zurich. Super cheap too!
This is absolute craziness:
“Winterborn said she supports universal rent control, and also a limit on the amount of money someone can make by owning property.”
Seriously? So who gets to determine how much someone else can make?
And why stop at housing rents? Why not impose this on car dealers, ma and pa knitting stores, bike shops, etc., etc., etc.
Talk about government run amok.
What’s even more surprising is how much faith this person has in the government and it’s technical capability to manage such an undertaking.
““Housing and basic food shouldn’t be something people make money off of. … With food you can eat really simply — rice and beans. With housing, we’ve taken away all the options.””
So, please, do tell…why would anyone then start a business to sell housing or food if they cannot make money? See the shallowness of this person’s argument? It purely based on emotion, not reason. Maybe this person really thinks that people can sell housing and food, but as the person wrote before, the government will determine how much the person can earn from that sale??
Again, where is the reasoning?
“The Rev. Mark Knutson, of Augustana Lutheran Church in Irvington, described Portland’s problem as essentially one of morality.”
But it is not an issue of morality. Is the good Rev really telling us that home owners are immoral because they charge rents that cover their mortgages and loans? Really? Immoral?
Notice what’s not being talked — the easy available of loans that are necessarily driving up the cost of housing. Just as the abundance of cheap college financial aid is causing tuition costs to go up, the abundance of cheap home mortgage loans is similarly causing housing prices to go up. Banks are giving hundreds of thousands of dollars to people with household incomes of less than $100k so they can buy houses. Of course homeowners will raise their selling price to the point at which people will buy.
Acknowledging this truth compels one to inquire why home mortgages are so cheap — answer, the federal government.
And what do people propose should be done about this problem? More government action….it’s hysterical if it weren’t so sad.
“Promise King, executive director of the League of Minority Voters, said the city has failed to follow coordinated plans that would add transportation, housing and jobs to an area all at once in a way that could raise the incomes of struggling Portlanders rather than merely bringing in richer people to replace them”
Wow…again, look at the blind faith in the government technocracy.
In this person’s estimation, all it takes is the government to “add transportation, housing and jobs to an area all at once in a way that could raise the incomes of struggling Portlanders”.
A) the government’s job is to add housing and jobs, right? Does this person seriously believe that the government creates jobs other than government jobs? That the government builds housing?
B) the government’s job is raising the incomes of people? Really, if the government’s job was to increase a person’s income, why bother with transportation, housing, etc….just have the “government” write checks.
This is a real problem in how we think about public policy issues.
There is an overwhelming number of people in Portland and Oregon who believe that the government is capable of “add[ing] transportation, housing and jobs to an area all at once in a way that could raise the incomes of struggling Portlanders”. This is pure fantasy. The government lacks the technical competence to do this in the first place. Second, the government cannot od this without first confiscating the financial capital from the private market to do it anyway which means taking from the very people it seeks to “help”.
Also, lets not forget how the City of Portland directly contributes to the problem of too many people chasing too few housing units – it’s a Sanctuary City that actively encourages and rewards illegals to settle here. Until the Democrats and Liberals in Portland own that problem, they’re in no position to start demanding the the government take more financial resources from the people in an attempt to “add transportation, housing and jobs to an area all at once in a way that could raise the incomes of struggling Portlanders” to solve a problem that the government caused.
““We have broken promises from our elected officials,” Jama said into the bullhorn that rally speakers had begun using to address the crowd after their speaker system lost electricity. “Where are you? You should be here! You should be here!”
Why? To express their feigned heartache. Notice that this is all about emotion. It’s basically a temper tantrum that says I can’t have what I want so we must punish those who have. Typical liberal envy…
I think it’s simple. No more than 3% increase year over year. Any more and the agent gets to pay the tenent 6 months of the proposed rent so they can move out.
What? Why 3%? Why not just 1%? What economic principle are you even applying here? You’re simply punishing people.
3% is the cap on property tax assessment hikes. If that’s the limit on increasing costs for those who own, why not for those who rent too.
Our property tax system was a horrible idea that has created lots of inequity and is pushing prices in some neighborhoods even higher since they have lower property taxes than they should. We should repeal the permanent cap on property tax increases not extend the madness further.
Assessed value and actual property taxes aren’t really linked though. While assessed value is legally limited to 3%/year, plenty of people (including me) have seen increases of well over 3% (in some cases 10-120%) in a single year. Part of this is due to bonds and such, but it’s insane how it seems to go house by house. This city’s (and state’s) property tax system is severely flawed and needs to be changed ASAP.
Wait a minute . . . you think anyone who doesn’t own real estate should just accept with the increase in home prices, BUT when you have to pay real estate taxes on your home (which has increased in value from the same housing price increase), you think the system is flawed?!?
WTF That is the most hypocritical statement I have ever read on this website.
You cannot have your cake and eat it too.
Um. apples and oranges. One thing the government has DIRECT control over (and note that as a renter you are also prone to these wild property tax fluctuations too, which mostly certainly factor into rent increases), but the other is a lot more difficult for the government to directly (and rapidly) slow housing prices.
I’ve said our increased housing prices are bad (sad), and I’ve said our property tax system is bad. As renters or homeowners (all of us property tax payers) we don’t have a lot of options other than to pay them. If you want to call that hypocritical, so be it.
Please present your rationale for the analogy. I don’t see an analogous situation here.
What is the problem with the landlord collecting as much in rent as people are willing to pay? That some people have the means to pay while others do not? So what? Equal opportunity is not equality of outcome.
There are lots of ways to address this situation without solutions that intend merely to harm landlords.
Other costs associated with owning and maintaining a property are not held to 3%. Then, there is opportunity cost.
great plan when inflation is where it is today (~2% or so) what happens when the fed loses control of it and we have a much higher inflation rate?
Its the same think playing out in many cities right now, not just Portland. Cities used to just sprawl, which is easy because there is very little NIMBY opposition to sprawl. Sprawl is in nobody’s back yard. Now everyone wants to live in a urban environment though, not 50 miles from downtown. One solution would be to legislate a mandatory level of housing increase for the city each year, tied to the level of job increases, with a budget for every neighborhood. If a neighborhood does not meet its budget, then additional measures go into play like more streamlined approvals or penalties. Unrestrained NIMBYism will only lead to an ever worsening housing crisis. There has to be some level of balance.
Not everyone does. Please don’t assume as much. Living in a packed urban environment is not really the dream of a majority of people. But don’t let that stop these folks from banning single-family homes, banning cars, etc. This whole affordable housing movement in Portland is really just totalitarianism run amok. Just look how this has manifested itself…
Making money from renting out your home = greed. That “greed” must be punished by imposing strict controls on how much money you can make from renting out your home/apartment complex. Further, if you want to build, then your tenants cannot own cars, and, further, if you want to build you have to take a loss on your investment in the name of affordable housing.
Oh, and lets not forget the calls for even more of the failed spending that has gotten us here today, e.g., cheaper home loans, more government spending on infrastructure, and assuming that the government possesses the competency to “add transportation, housing and jobs to an area all at once in a way that could raise the incomes of struggling Portlanders”…lol
“It’s illegal to build rowhouses or duplexes in most of central Portland; ”
Michael — you really need to redraw that map, or at least stop citing the incorrect number and find an accurate statistic to link to.
As I pointed out in the original post all the EXd-zoned land in Portland is colored grey in the map, which is incorrect. Apartments are legal in EXd. And most of the apartments currently under construction in central Portland are on EXd.
See this Flickr shot
for an illustration of the EXd-zoned land that’s not included in the map in this link
BTW, I haven’t seen this written up on BikePortland, but the Portland Bureau of Development Services has plan to alter zoning on EXd land.
Currently, apartments can be built to 65′. This is in places like N Williams, Inner NE Sandy, N Interstate, NE MLK.
Under the new zoning changes, apartment buildings can be built to 75′ if they include affordable housing (I don’t have the details on how much, etc., but I heard the presentation).
This will add density, add affordable housing, and allow more housing units to be built in inner Portland neighborhoods.
Hats off to city council for progressive moves like increasing density and allowing zero-parking apartment buildings to be built.
Keep the hats on…
Look, zero-parking apartments is just banning cars by another name. I am not sure why so many people insist on taking away other people’s freedom of movement, but please stop.
Though you do hit an important feature of the overall problem – zoning laws. In other words, restrictive zoning laws the unnecessarily limit the number of housing units being built. Whether you’re banning single-family dwellings, imposing height restrictions or parking restrictions, requiring “affordable housing”…it’s all the same…it simply disincentivizes construction.
“Look, zero-parking apartments is just banning cars by another name.”
If a person doesn’t want to own a car, or is fine parking it on the street, why shouldn’t they be able to live in an apartment building that doesn’t have car parking?
Lots of cities require car parking spaces regardless of whether or not the tenants have cars. It’s dumb — it takes a lot of space and money to put in a parking lot, underground garage, etc.
The city has many zero parking homes, it cracks me up when I see a homeowner who doesn’t have a driveway/offstreet parking complaining that they won’t be able to park in front of their house for free if the city allows an apartment complex with the same setup to be built.
Hmmm, the city builds a residential street with space available for parking and your conclusion is that the city is providing free parking??
The city is providing free parking! I have seen people assessed to pay for sidewalk repairs, but never for street maintanance, so yes when the city pays to maintain a parking spot and does not charge people to park there, they are by definition providing free parking.
Uh, no one is saying that people should have the choice to not own a car or choose to park on the street. What is being proposed here in Portland, though, is really banning cars by another name. The plan to have zero parking buildings is to force people to abandon their cars. You see this tons of posts here at BikePortland, for example. You see this in the comments here, too, relative to increasing bike infrastructure…there’s always the under-current of – “it will disincentivize driving”.
Is it your understanding that people are forced to live in those buildings? I haven’t looked into it, but I’m pretty sure that is not the case.
I understand you’re looking to find fault, but I think you’re off base on this point. If we wanted to ban cars — which incidentally, is a pretty great idea on certain streets, imagine a car-free Park Blocks — we could do so much more directly.
How will it be determined who gets to live in the affordable housing? If there are more applicants than apartments, how will it be determined which applicants get to live in a desirable neighborhood at below-market cost?
It’s quite revealing how quickly and easily the protestors and any commenters here attempt to conflate making money and immorality. I wonder how many of these same people see making money off of abortion or harvesting the body parts of aborted babies as also being immoral? Or seeing making money off of assisted suicide as immoral?
It’s revealing because it demonstrates that this outburst is really about emotion, not economic, legal, or governing principles.
Instead, it’s punish those evil landlords, punish the builders, etc.
It’s always about punishing for the left…always.
For example, you cannot oppose gay marriage without being tarred as a bigot and be driven out of business and have your lives threatened (see pizzeria owners in Indiana, for example). This same emotional tantrum applies here…punish the landlords by imposing price controls; equate making money to immorality; etc.
They punish basically everyone for making money except for Apple who essentially uses slave labor in China. They love their iPhones and MacBooks too much. Where is the liberal guilt there? : )
Apple’s new headquarters is what’s causing this exact problem in my neighborhood. Rents have skyrocketed because we’re less than a mile away. You can find flyers on neighboring houses for sale that list “Close to Apple!” as one of the big selling points. What I find even funnier, though, is one person honked at me for taking the lane while the bike lane was blocked due to construction. They were driving with their phone in their hand, and they shook it at me after I moved over when the bike lane resumed.
I think they tried a centrally controlled economy out before and it didn’t work out very well.
Yep, centrally controlled economies are failed economies. I keep wondering what is so attractive about them that we have tons of Americans yearning for a Bernie Sanders or cooing about China (see Tom Friedman in the NYT).
Then I recall…centrally controlled economies are command economies and command societies, i.e., control. These people simply want to control others, e.g., how much money you earn; how much you eat; whether you get a car; etc.
You know, after witnessing the horrors of Communism, the tens of millions DEAD, you’d think communism would have lost it’s appeal.
Is Bernie Sanders proposing a centrally planned economy? Or trying to somehow limit freedom? If so, I am not familiar with those pillars of his platform.