The market isn't free to find the true value of housing in Portland, nor respond to the type of housing the customer prefers. The Metro-constructed UGB that put land off limits to home builders was made with good intentions, but it has had the tragic consequence of obliterating housing affordability and limiting housing choice and the livability of urban neighborhoods.
As density increases, housing prices near the center of town (or near jobs) will be more expensive as a function of its desirability. But the upward pressure on all housing prices would be less if the supply of homes (not just apartments) were allowed to grow.
Government's solution to every societal problem is to throw tax dollars at it. Subsidized housing for low and middle-income workers would sap the economic strength of the region if enough apartments were built to actually make a difference. These would be an ongoing cost because most people don't quit wubsidized housing.
Real change involves two things: 1) Thousands of people must decide to move to more elsewhere, or else sacrifice their place in the city for keeping the UGB, and ; 2) The UGB is eliminated, or the concept fundamentally altered to allow more land for housing.
This article from the Portland Business Journal reports on a study that shows middle class jobs (those with salaries between $30,000 and $50,000) have decreased 12% since 1980, while jobs for high and low wage earners have surged. Coupled with a rise in housing prices, the Portland area has become unaffordable to a growing segment of the population.
Why the ballooning income disparity could force Portland to rethink the Urban Growth Boundary
Portland Business Journal, May 12, 2015 By Eric Siemers
The Portland Business Alliance's new study showing a decline in middle-income jobs in Portland casts a spotlight on housing inequality issues.
The gaps could force the region to think hard about whether the Urban Growth Boundary needs updating.
Most middle-income earners in Portland have been pushed to the metro area's edges where home prices still remaine relatively affordable, though still distant from where many of the workers ply their trade.
The net effect is a shortage of housing affordable to middle-income workers. But the region's Urban Growth Boundary - a line around the region's perimeter that limits how far this metro area can expand - makes adding new housing inventory a challenge.
"We're land-constrained through regulations," McDonough said. "We're not saying get rid of the Urban Growth Boundary, but it's a 1970s-era policy that we need to be thoughtful about."
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