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A Look Back At Oregon's Housing Crisis


Portland Community Reinvestment Initiatives is focused on affordable housing.

Portland Community Reinvestment Initiatives is focused on affordable housing.

In cities across Oregon, one word came up again and again in 2015: housing.  

People searching for affordable housing have found themselves competing with a migration and investment boom in the state. While the recovering economy has led to a rise in new home and apartment construction, stagnant wages mean those new homes could be out of reach for many Oregonians.  

Housing and homelessness will continue to be major issues the state grapples with next year, and looking back on the changing landscape in 2015 will set the stage for future policy.

How We Got Here

Portland’s rental housing crisis resulted in part from a national trend of people moving back to cities.

Portland has grown by more than 29,000 households since 2000, according to the city’s Housing Bureau.    

PDX Housing By The Numbers

Here is a quick look at some of the most important numbers for housing in Portland in 2015:

  • 1,691
    Median rent for a one-bedroom apartment in Portland
  • 14
    Percent rent increased over the past year in inner Portland neighborhoods.
  • 24,000
    Number of affordable housing units Portland needs to meet demand.
  • 3.75
    Percent vacancy rate in Portland metro area in 2015.
  • 30
    Percent of income federal government says the average person should spend on housing.

Even during the recession, when construction of new homes and apartments ground to a halt, Portland’s population continued to grow.

“Portland has done a good job of making itself seem like an attractive place,” said Matt Tschabold, equity and policy manager at the Portland Housing Bureau.

“You have people aging out of their parents homes, getting out of university housing, moving to Portland and trying to find housing in the market.”

In cities across the nation, falling home ownership rates — in part due to rising student debt, according to Marketplace — have also pushed more people into the rental market.

While new construction of single family homes and apartments is on the rise in Oregon, it still hasn’t reached pre-recession levels.  

As a result, the supply of rental housing in cities like Portland and Bend lags behind demand, and rents rise.

Portland has a particularly acute shortage of units affordable to the lowest income renters; places that rent for roughly $750 a month or less. Portland needs roughly 24,000 more affordable units, according to the Housing Bureau’s analysis of recent census data.  

Private developers aren’t building units in that price range without public subsidies.  

Instead, developers are generally building higher-end units that generate a better return on their investment, which contributes to rising rents across the city.  

“It’s the high-end market, that’s where the bulk of the development has been,” said Tschabold.

Bend home for sale. (File Photo)

Bend home for sale. (File Photo)

David Nogueras/OPB

A similar dynamic is at play in housing markets across the nation, according to Nicolas Retsinas, of Harvard’s Joint Center For Housing Studies, who spoke to Marketplace about rent inflation.
 
“Last year, median rent of newly constructed rental housing was about $1,300 per month,” Retsinas said. “That would equal about 50 percent of the median income of renters nationwide — which means that over half of renters couldn’t afford that rent.”

Finally, speculation by investment firms is adding to the competition for housing and driving up prices and rents in an already tight market, according to reporting by Investigate West. 

Wall Street investment firms that have in the past focused on investing in apartment buildings have started selling bonds to buy single family homes. The companies back the bonds with rental revenue, and add to their earnings by charging tenants extra fees for maintenance.

A Housing And Homeless Crisis

Market forces have made affordable housing rare in Oregon’s most populous metro areas. According to the latest data from real estate website Zillow, the average rent in Portland was $1,691.

The Portland Housing Bureau, which used data that included more aging units and multifamily units, found the median rent for a one-bedroom apartment was $1,182

And rents are still going up. Rents in the city rose an average of about $100 every month, according to the Housing Bureau.

Only San Francisco and Denver had faster rising rents.

That’s meant that stagnant wages and increasing inflation from 2014 and early 2015 have made it hard for Oregonians to keep up with the rising home costs and rents.

The poorest families in Oregon’s top metro areas have little money leftover after they pay their rent.

“They’re going to pay more than 50 percent, and in some cases, more than 70 or 80 percent of their income toward rent,” said Mark Jolin, director of A Home For Everyone, a partnership between Portland and Multnomah County.

Mayor Charlie Hales (right) announces a new mixed-use development in Northeast Portland, with Commissioner Dan Saltzman.

Mayor Charlie Hales (right) announces a new mixed-use development in Northeast Portland, with Commissioner Dan Saltzman.

Rob Manning/OPB

In response to the lack of housing, Portland declared a homeless and housing emergency in October, one day after Los Angeles took similar steps and dedicated $100 million toward the problem. Eugene soon followed.

Mayors like Portland’s Charlie Hales have the right to declare emergencies when issues of human suffering arise, but that’s typically been reserved for things like natural disasters.

This was a different type of human suffering.

“We will look at every single piece of property the city of Portland owns where we might be able to shelter more people this winter,” Hales said.

“Why do this now?” he added at an October press conference. “Winter is coming.”

How Are Cities Responding?

In Portland, city councilors have pushed through measures that increase affordable housing funding by millions in the city’s urban renewal areas. City leaders are also looking at taxes that could expand funds for affordable housing in other parts of the city experiencing rapid growth, like inner and outer Southeast.

Hales also stated his desire for the city to build a new homeless shelter before the first of the year, and end veteran homelessness in the city on the same tight timeline.

Tents at Whoville, a homeless site in Eugene during a visit by Think Out Loud producers in January 2014. The camp was taken down by police in April 2014 and then re-established in November of that same year.

Tents at Whoville, a homeless site in Eugene during a visit by Think Out Loud producers in January 2014. The camp was taken down by police in April 2014 and then re-established in November of that same year.

Julie Sabatier/OPB

At the start of Fall 2015, Portland housing officials still needed to find permanent beds for around 260 veterans.

Elsewhere in the state, Eugene city councilors considered a resolution in October that would have asked Gov. Kate Brown to declare a statewide homeless emergency. A month later, the city approved an ordinance that allowed homeless people to camp from dusk to dawn in designated areas.

And in Bend, city councilors have increased fee exemptions for some affordable housing developments in recent months.

Looking Ahead To 2016

Portland city councilors recently approved a 90-day notice for large rent increases and no-cause evictions, up from the state mandate of 30 days.  It was a move that housing advocates cheered enthusiastically, but not everyone is rejoicing.

A Portland company that rents properties in the city has filed an injunction against the city’s new rule, claiming it violates the state mandated law. That lawsuit is likely to play over the course of the next year.

State lawmakers have said they plan to take up affordable housing in the 2016 legislative session, and could be up for heated debates over how Oregon grows and whether government should help subsidize certain types of housing.  

At the same time, Oregon’s population surpassed the 4 million people mark in November, and more people are coming.

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