How will Oregon solve its growing affordable housing crisis? – Blogtown
In early November, Josh Lehner, an economist with the Oregon Bureau of Economic Analysis, delivered a simple message to the Home Builders Association of Metropolitan Portland: House prices in Oregon will continue to rise.
Lehner’s presentation noted short-term problems in housing construction, such as labor and supply shortages, which are partly responsible for the slow pace of construction over the past year.
But he also highlighted long-term structural issues that confirm much of what many communities in different parts of the state have been feeling for years. Housing prices have become sky-high, competition for housing is fierce, and many workers are being excluded from their communities.
According to Lehner, none of this was impossible to see coming.
“Affordability is worse,” Lehner said. “Purchase prices are on the rise. This means you need a bigger down payment which means you need to save more income or take out a bigger loan so these barriers to entry into the housing market are worse today than they are. ‘they haven’t been… do with the fact that we have under-built housing. This is the root of the problem here.
Oregon has indeed failed to build enough housing to meet demand for decades. From around 1980, the state began to provide one housing unit per household, whether a family or a single person, to meet the housing needs of the state. But that plan did not take into account vacant homes, vacation homes, or the degradation of a certain percentage of homes over time.
Today, Oregon has the second lowest number of housing units per household in the country. Only Washington does worse.
The result is that the state does not have the number of homes available to meet current demand, let alone future. This is especially true in and around metropolitan areas like Portland and Bend, but it’s also true in rural areas, where demand also exceeds supply and Oregon homes are more expensive than the national average. .
Tenants have been hit hard. The same goes for the population looking to buy a home, which, given the relative youth of Oregon’s population, Lehner believes, will grow exponentially over the next decade.
To prevent its residents from leaving and provide them with the traditional financial security of home ownership, the state must build new homes quickly. A study conducted by consulting firm ECONorthwest on behalf of the state shows that Oregon needs more to build nearly 30,000 new homes per year for the next 20 years to meet demand.
According to these same figures, the state must build nearly 1,500 units per year in order to house its homeless population.
If Oregon can’t start building more homes quickly, it may face the same challenges California currently faces: the displacement of low- and middle-income residents and high barriers to residency for newcomers. potential, leading to a sharp decline in population and slower economic growth.
This population decline, documented in the 2020 census, means California will lose a representative in Congress next year and an electoral vote for the first time in its history. Oregon, meanwhile, will win a representative and an electoral vote due to its growing population, but if the state doesn’t build more homes, that growth will slow.
Generally speaking, there are two types of affordable markets in the United States. One is in places like the Rust Belt Midwest, where prices are low because demand is low. The other is in the southern Sun Belt region, where states like Texas are rapidly adding housing and population.
“Frankly, sprawl is one of the ways these Sun Belt subways get better production and affordability,” Lehner said. “Obviously that’s not the path Oregon and Washington are looking to take in terms of land use policies and the like, so what are you doing? “
Oregon has taken several decisive steps in recent years to facilitate the construction of new housing without urban sprawl, most notably in 2019, when Governor Kate Brown signed a bill championed by State Representative Tina Kotek requiring that cities with more than 10,000 inhabitants allow the construction of duplexes and quads in areas zoned for single-family homes.
This bill made Oregon the first state in the country to essentially ban zoned single-family neighborhoods in cities. California followed suit earlier this year.
The passage of this 2019 bill signaled a significant change in state housing policy, which the state legislature expanded this year by removing barriers for Oregon residents who subdivide the houses and build accessory housing units.
But the effects of these policy changes to increase housing density may not be fully apparent for years, and thousands of Oregonians today face housing instability.
“It will take several decades of building market-priced homes to bring the market back to an equilibrium where housing is generally more affordable,” said Mike Wilkerson, ECONorthwest partner and chief analyst. “The question becomes, in the meantime, what can the state do to help bridge this period?”
According to Wilkerson, the answer lies in direct, immediate and subsidized interventions such as housing vouchers and rent-controlled units that would help people access housing quickly. Federal aid, such as the Build Back Better Act, could help fund these kinds of interventions.
“These units are never built by the market and are never built except by the public sector,” Wilkerson said.
Still, if the state’s history is any indicator, there’s no guarantee that just building new homes will support all Oregonians alike.
“The last time we built a lot of housing, suburbs, a lot of people were left out,” said Stacie Sanders, director of policy and advocacy at Housing Oregon. “There were redlining and piloting and unfair lending practices, so I don’t know if we’ve ever seen in American history where everyone was included.”
As a result, real estate wealth in Oregon is disproportionately concentrated among white homeowners, and high homeownership prices make access to this wealth even more difficult for younger Oregonians and less privileged people who are trying to start a family and live in the state without significant family support.
“Generational wealth is enormous for many immigrants and refugees, as some may be newcomers, so posting a bond can be a huge thing,” said Cristina Palacios, Housing Justice program director at Unite Oregon. “It sometimes takes years to create this generational wealth to be able to become owners. But also when it comes to rentals, rents keep going up … and wages don’t go up.
Housing insecurity also intersects with broader issues like the climate crisis, with Oregon having experienced fires and heat in recent years that have claimed hundreds of homes and some their lives.
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“In Rogue Valley, one of the biggest challenges for affordable housing is that during the fires, many houses burned down. [down], and many community members are leaving the state because they cannot find housing anywhere, ”Palacios said.
As the climate crisis intensifies, the benefits and risks of homeownership may change. But for now, homeownership is still a gateway to the middle class, an investment many are eager to make.
The tension is that housing cannot be both a great investment and affordable, as scarcity is a major factor driving up home values. This has been great news for older Oregonians who own homes, but terrible news for those who don’t.
To a large extent, the future of the state depends on whether one views housing as an investment strategy or a moral imperative. Sanders has a clear position.
“Housing is a right for me. Everyone deserves safe, hygienic and healthy housing. Accessible to jobs and public transportation, and it’s climate friendly, ”said Sanders. “How do we get there? One step at a time.”