By Property Management Systems – Portland’s leading resource for rental news.
If you were searching for Portland Oregon Apartments last year you know that finding an affordable apartment here was almost like winning the lottery since the demand for apartments in Portland Oregon is hotter than ever before and 2016 isn’t going to be any different.
Although rents for Portland Oregon Apartments are increasing there are many myths behind what’s actually causing rents to increase.
In this post we will break down the real cause behind rent increases for apartments in Portland so we can separate fact from fiction and know the real causes for rent increases in the Portland Oregon apartment market.
Myth #1 – Brand New Apartment Buildings Are Increasing Rents across Portland
This myth is false of course since it’s not the construction of new apartment buildings that are driving up the price of rents for other Portland Oregon Apartments, what’s causing the increase in rent for apartments here is a lack of supply.
Sadly, this answer isn’t what most people want to hear since one of Portland’s latest apartment buildings (Burnside 26) is charging close to $1,400 per month for a studio apartment but the reality is that the tight supply of Portland Oregon Apartments dates back to 2010 since builders haven’t been building enough apartment and affordable housing to keep up with demand and this is one of the biggest causes of the lack of affordable housing in Portland.
Myth #2 – Tearing Down Old Homes Is Destroying Affordable Housing in Portland
Another common myth in the Portland Oregon Apartment and rental market is that tearing down old homes across Portland is another thing that’s causing rents to rise.
Thanks to recent statistics from the Portland Bureau of Planning and Sustainability we know that in the last 5 years there’s been under 1,000 homes torn down, or less than 1 percent of available rentals, so the argument that tearing down older homes is affecting the rental market isn’t a real argument since the actual homes that have been torn down isn’t enough to affect our rental market.
Developers then built 2,002 new housing units on those cleared lots. Twice as many households now live on the same land.
Don’t forget: The battlegrounds over teardowns are some of the city’s richest neighborhoods.
“If you look at the median price of a house in East Moreland,” says Portland State University urban studies professor Ethan Seltzer, “and you claim that tearing one down is reducing affordability, that’s patently ridiculous.”
Source – wweek.com
Myth #3 – We Need Rent Control
Since rents for Portland Oregon Apartments have been quickly soaring over the last year many people in Portland have been talking about the idea of rent control but the reality is that rent control would only further inflame the problem of a lack of affordable housing in Portland.
Why is rent control not the best idea for Portland?
Many economists view rent control as a problem and not a solution because some cities like San Francisco offer rent controlled buildings but the catch is if get a job that’s far away from your apartment you are faced with the same problem of being forced to choose unaffordable housing or staying in your rent controlled unit while making a longer commute every day since the entire city isn’t rent controlled
What most renters who support rent control don’t know is that some landlords in San Francisco and other cities just keep their rental units vacant or evict tenants from them rather than complying with rent control in their areas.
“Has that really been effective at solving their problems?” asks Tim Duy, an economics professor at the University of Oregon. “No. You think you’re helping people, but you’re constraining the stock of affordable housing.”
Myth #4 – Force Developers to Build More Affordable Apartments
In the last 12 months one of the big options on the table that city officials have been considering is inclusionary zoning which would require developers to build more affordable Portland Oregon Apartments but the reality is that many developers across the United States have been able to “wiggle” out of building affordable units in their developments.
“Development is a not a right, it’s a privilege,” says Jonathan Ostar, executive director of OPAL Environmental Justice Oregon. “There are many reasons why folks are being priced out of the city. One reason is the inability of Portland to use a tool like inclusionary zoning.”
Inclusionary zoning is a policy that requires developers to make a certain percentage of any development affordable to poor and working-class people.
Oregon is one of two states—Texas is the other—that bans cities from mandating inclusionary zoning. State lawmakers are now trying to end that ban.
The policy could work in Portland. Because it ties affordable housing to the market, it works best in a building boom, like the one we have now. But it’s no silver bullet.
In the roughly 500 cities that have tried inclusionary zoning, the policy has proven to be a powerful but complicated tool. Set the rules too lenient and developers wiggle out of building affordable units. Make it too strict and they don’t build at all.
“It costs you nothing as a politician,” Johnson says. “I can go to a ribbon-cutting and show you the units. But I’ve basically made everything cost more for the people who didn’t win the lottery.”
Often, there aren’t many units to show. In 2014, Seattle city officials conducted a survey to see how many affordable homes and apartments were built in the previous four years by similarly sized cities, including Portland.
Six of those cities had inclusionary zoning. Portland mostly used taxpayer financing from urban renewal areas. None of those cities produced as many affordable housing units as Portland.
Source – Wweek
Solutions to the Problem Coming?
There’s no denying that we have a problem with a lack of affordable Portland Oregon Apartments, hopefully developers, city officials and politicians in Portland can all come to the table to work out the best solutions for our city since many people feel that Portland Oregon is quickly becoming unaffordable for many people including the artists, writers and creative folk who have been leaving the city for more affordable areas.
Housing affordability emerged as a major issue Tuesday during the City Council’s first work session on the comprehensive land-use plan update that will guide Portland’s growth during the next 20 years.
The council also admitted it will take longer to approve the update than expected last week. The final vote probably won’t take place until May — at the earliest.
During a Jan. 26 meeting, Mayor Charlie Hales and all of the commissioners expressed concern about rising housing costs that are pricing both low-income renters and middle-income home buyers out of the city.
Commissioner Dan Saltzman, who is in charge of the Portland Housing Bureau, was adamant that the final version of the Comp Plan — as the city’s long-range land-use plan is commonly called — must include incentives for building a range of affordable housing, from rent-controlled apartments to lower cost single-family homes.
“We need to focus like a laser on affordable housing. I need to know where it’s going to be [in the Comp Plan],” Saltzman said during the discussion with staff from the Bureau of Planning and Sustainability, which drafted the update recommended to the council by the Planning and Sustainability Commission last year.
Source – Portland Tribune
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