The right thing, right here,* right now
*Some of the problems and solutions in the video below are specifically for Portland and Oregon cities that have Housing Authorities and are experiencing a crisis in the supply of affordable housing.
I am a landlord. Alone and with partners, I own apartment units in Clackamas County. I have been through some very tough times with high vacancy rates, low rents and rising costs. I am now enjoying the other end of the real estate cycle - low vacancy rates and high rents. The extra income has allowed me to roof buildings, pave and sealcoat parking lots, put up new fencing, resurface the pool deck, paint buildings and spruce up the landscaping.
My tenants care that I care enough to make the properties very nice places to live, and I am proud of the housing I provide. To no one's surprise, this comes at a huge cost that goes up every year. The recent talk about having rent control in Portland foolish, shortsighted and selfish. If the goal is to bring down (or not increase) the cost of housing in the Portland area, rent control would only help the few people who benefited at the beginning, but it would make things worse for everyone else later on.
As with any other product, housing prices respond to supply and demand. Right now the supply of housing cannot keep up with an extraordinarily high demand. Here is the good news: No new housing was being built until rents were high enough to make new construction pay off. Now, new construction in Portland is adding to the housing supply which is beginning to make a dent in demand: Vacancy rates are inching up and the rate of rent increases are slowing. The market is working, but not fast enough for all of the people needing a place to live now.
Rent control is a political solution that doesn't address the real problem of increasing the supply of housing. It does the opposite. When rents are controlled, investors stop investing and building comes to a halt. There is an abundance of research to show that rent control is counterproductive, but frustrations over how to deal with real life crises makes people demand a bad, long-term policy for what is a short-term problem. The market may not respond fast enough for people needing affordable housing now, but programs like the State Legislature's $8 million for rental assistance should help in the short term.
In the video below, the discussion among rental housing professionals is one of the best I have seen for presenting workable solutions for dealing with the affordable housing crisis. I may not agree with all of the suggestions they propose, but this is an excellent place to start a conversation about what actually works, instead of pounding away at what doesn't. My pet peeve is also addressed here: The least good option is when government builds low income housing. The private sector does it better. At $350k per unit for the Portland Housing Authority to build an apartment unit, that bar is very low. The bathroom faucets must be made of gold.
HFO-TV: MultifamilyNW Proposes
Portland's Affordable Housing Solution
An informed discussion on Solutions for Portland's Affordable Housing Crisis
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