By Don Mac Gillivray
Yes, Portland is in a housing crisis and yes, affordability is a problem for many residents. Portland has always had an affordable housing problem for those without adequate resources.
As homeowners improve their properties and the worst housing is replaced with new, high value housing, the supply of low-income housing decreased and the inflation of housing prices and rents have enormously increased over time.
Fifty years ago, many inner city homes could be purchased for under $10,000.
The recession of 2008 reduced all home construction to a trickle, while new residents continued to move to Portland in record numbers. Even with increasing residential values, Portland remained one of the most affordable large cities on the West Coast.
As the influx of people increased, the housing supply did not keep up with demand and prices increased. Rents for apartments increased 12.5 percent in 2015, and home prices were nearly the highest in the nation.
In the last year though, rents have increased by only 2.9 percent. New housing being built will slowly address the unmet demand and improve the overall housing situation.
Existing residents are being replaced by incoming residents thus causing further “gentrification” out of the central city to the more affordable suburbs.
New housing is going into established neighborhoods attractive to the millennial generation because of the rediscovered walk-ability offered by nearby stores and services in these neighborhoods.
Since 2015 developers have submitted plans to build 25,000 more new units in Portland. This is likely to continue as the Portland Comprehensive Plan predicts.
Data shows approximately 30,000 permits were submitted for single family residences, duplexes, and triplexes over the last eight years. The Plans say Portland is expecting 6,000 new housing units to be built every year until 2035.
While most of the housing to date has been in the urban area of Portland, developers are increasing building in the suburban areas thereby balancing out the locations of new housing.
Over the last nineteen years, forty-two square miles of undeveloped land has been added within the urban growth boundary. Zoning will allow 67,000 housing units to be built there, but to date only 11,000 units have been approved for construction.
New housing always seems to be expensive homes, condominiums, and apartments. Homeowners are expected to move out of their older homes and into the new, modern homes. Their old home would then be available to others improving their own circumstances.
Over time, homes and apartments lose value and become available to middle and lower income people. Homes over 100 years old and more have become popular for buyers to make improvements and resell, thereby competing with newer homes on the market.
This reduces the availability of affordable homes and is exacerbated by the sluggish growth of the wages of many workers.
Newer ideas in planning are allowing more options for what is called middle housing. New zoning is being developed that will allow increased densities in older single family neighbor-hoods.
While this is controversial with many current homeowners in these neighborhood, the idea is to allow a second unit to be built on what was a single family lot. This might be a small addition to an existing home or a free standing unit in the side or backyard that would be intended for one or two people.
The number of people living in the typical apartment unit has been decreasing for many years. It is now slightly above two people per unit. Too often families grow up and the children move away leaving one or two adults in a large home.
Owners can then move into the smaller unit (ADU) and rent out their existing home to professional people or a young family that will be more economical for everyone.
It would allow more people to live in existing developed neighborhoods with nearby shops, services, schools, etc. and reduce auto usage due to the shorter trips to almost everything.
The demand for housing for people earning 50% of the median family income ($35,000 for a family of four) far exceeds the supply.
In the Portland region 92,000 units are needed and only 52,000 exist. That is 40,000 people or families looking for homes that do not exist and making do until the situation improves. This has become a major cause of homelessness.
Within the Tri-County region there are 16,500 federally subsidized housing units and, while this is an important source of low-income housing, there just isn’t enough to go around.
The Portland housing crisis is beginning to attract the attention needed to provide results. The city, the county, and the state are funding initiatives to build new low-income housing.
One of these programs is Metro’s new Equitable Housing Initiative. The intent is to work with local partners throughout the region to provide opportunities and innovative approaches that will result in more people living in an affordable home.
They are targeting local development leaders in both the public and private sectors to find opportunities for collaboration and partnership in advancing regionally equitable housing efforts.
One year ago, Metro Council awarded $575,000 in grants to help seven communities to provide this much-needed housing. This year the amount is almost $2 million in grants with several going to the City of Portland and Multnomah County. It is expected these grants will continue into the future.
Finding new and better ways accomplish our housing goals is necessary before the decisions are made. The situation is complex and everyone involved in housing development must understand the need and help to work toward solutions.
The challenges are great, but ways must be found to provide the housing that is needed.