Portland’s Self Created Housing Crisis

The housing crisis in Portland will never be solved by its current elected leaders. In fact, it is those officials and their excessive regulation that is exacerbating the issue. Prices are going up due to an increase demand for housing and a low supply. This is basic economics. It is like buying something on Ebay. When there are multiple bidders for an item, the price goes up. Nobody says Ebay sellers are greedy. They are selling something at a price another is willing to pay. To reduce prices, you need to increase supply. Or like on eBay, you hope for multiple sellers. But what has the local government done to increase the supply? Nothing. In fact, they impede it. They draw an imaginary line around the Portland Metro area and call it an urban growth boundary. This artificially restricts the supply of land available for development and thus, increases its cost making it less affordable. Next they threaten fees to potential developers if they cut down trees or tear down old homes to build new ones. Not a great way to entice investment into the community. They then have zoning laws restricting what the developer can build on the property. Minimal parking if near a Max line. Mixed use retail/residential is also required. Density requirements. Not to mention other added building features to make the city “more livable” whatever that means. These all add costs at the developers and ultimately the buyers expense. Then there are the permits and impact fees and what have you. Costs rise before the earth is even turned and the builder sees an ever diminishing return on investment. Why would you build in Portland when there are plenty of other cities that are friendly to developers and appreciate the rights of property owners. Then to top it off, the City of Portland is now attempting to tell landlords they must give a years notice on rent increases and limiting how much it can increase. That is not going going to attract more rental units into the market. In fact, it will reduce them as people will simply sell the homes rather than deal with excessive rental regulation. That is especially true with the high property values right now. If the city really wants to end the housing crisis, they need to quit working so hard to “fix” it.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s