- Demographics - two of the largest population bulges the world has ever seen are both in the market for housing, putting a strain on housing supply.
- Land Reatrictions: The UGB limits land available for building new homes. Supply is scarce therefore land is expensive and homes built on the land need to be equally expensive to realize a decent return for the builders.
- Popularity: The Portland area is popular; in-migration adds more numbers/demand to those seeking housing.
Rent control + high demand = low supply
High demand + high supply = low(er) prices *
Here are parts of a longer debate on rent control that I had with a fellow volunteer just yesterday morning. She is an educated, otherwise logical woman, which is why I found her arguments to be so illogical.
Her: "Housing costs are so high in Portland that my daughter has to pay $1,300 for a studio apartment near Lloyd Center, and it doesn 't even have parking!"
Me: "Well, there are cheaper places to rent on the West side of town, and there is a building boom in Portland that should offer some relief from increasing rents shortly. I keep hearing about rent control, but that would only make things worse."
Her: "My daughter can walk to work where she is - if she moved she'd have to take a bus. Housing is a sociatal issue. People need a place to live just as much as they need food and medical care. There needs to be some 'balance' so renters aren't priced out of their homes!"
Me: "I'm not sure what you mean by balance, but if the government puts limits on what I can earn from my business, I would not want to be in the business anymore, and neither would other investors. Apartment supply would dry up."
"If housing is such a big social problem that it requires the government to step in, why doesn't everyone pay for the support through increased taxes? So, Instead of everyone paying for a housing solution, you think I should be the one to subsidize the housing?"
Her: Silence. And with a shrug of her shoulders, palms lifted to the sky, she said, "There just needs to be 'balance'. It's a complicated issue."
Me: "No it's not. The solutions are simple, but you wouldn't like those results either. Subsidize the person, not the building. Expand Section 8 housing vouchers to people who are being priced out of housing - not just the ones who have to move from one neighborhood to another."
"However, once the government gives money for people to buy something, like money for college tuitions or Cash for Clunkers, the price of the commodity goes up. You might continue to get more housing, but it would still be expensive. The better solution is to let the market work and add to the supply to bring it into balance with the demand."
Her: "We need balance."
Not willing to give up so easily, she changed tactics.
Her: "Where are you going to put all those people?"
After giving her several locations, she grabbed her purse and mug and headed for the door.
Her: "I bet you wouldn't want an apartment or increased density next door to you! It's always somebody else's problem!"
Me: "No, I don't want increased density in my neighborhood, that's why I live in a
R-7.5 zone. And yes, it's everybody's problem, not just one group of businesses. How would you like higher density next to your 5 acres?"
I think she heard my last remark, but she was out the door in a flash, walking briskly to her car. I am pretty sure that by then that she thought I deserved to have rent control dumped on my business, if for no other reason but because I didn't agree it's her which was for her, disagreeable. That's the way some people are - you can't change their minds with logic, even when you are nice trying.