Up Sucker Creek

Up Sucker Creek
Photo Courtesy of the Lake Oswego Library

Monday, January 11, 2016

Data-driven decisions smarter

The high cost of stupidity

Econ 101: Prices are controlled by supply and demand.  When supply is low and demand is high, prices go up.  When there is abundant supply but little demand, prices go down.

Everyone agrees that the cost of housing in Portland is high and going higher.  Portland is a popular place to live.  The number of people moving into the region increases the demand for housing, and at the same time, the urban growth boundary restricts supply.  It's a perfect storm of escalating unaffordability.  Most politicians and the public refuse to acknowledge that the UGB is the number one cause of high housing prices throughout the country. The UGB stops sprawl and is a good thing, right?

And now there is a housing crisis that has politicians stumped.  The quick and easy government "solutions" (rent control, inclusionary zoning, increased density, etc.) that have been tried here and in other cities have not produced reliable solutions, and most have made things worse.

For a clear-eyed look at the state of housing costs and land use policies in the Metro area, read the following report by  Gerard Mildner PhD., Academic Director of The Center for Real Estate at Portland State University.  The report was published in the Center for Real Estate Quarterly, Fall 2015, titled: "The Gentrification Plan for Metro Portland".   This is not the political propaganda Metro "experts" put out - it is a well-researched set of metrics every citizen should read and know.  Politicians especially should have a working knowledge of the facts that drive the policies and decisions they make.  The report may change beliefs about our housing affordability and what can be done, or not done, to make things better.

On the same Center for Real Estate Quarterly, see two of Gerald Mildner's other reports:  "Density at 
Any Cost", November 2014; and "Density at Any Cost, Revisited", February 2015.

"Public housing authorities would serve their clients better by issuing housing vouchers that would allow their clients to shop for existing homes and apartments closer to their preferred location."

Precisely what I have been saying!  Will public housing authorities do good for their constituency, or will they continue to do well for themselves?   

"An important conclusion from the urban economics and the housing economics literature is that high density development is more costly to build and provides fewer consumer amenities."

When planners and politicians talk about high density apartments being the solution to housing affordability, it is clear they don't understand anything at all about real-world economics.  It's as if they heard something somewhere and accepted it as fact, even though it is exactly wrong.  

Educate yourself, then vote accordingly.

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