Portland: Still the Model for Unaffordability

The Census Bureau estimates that the city of Portland is growing by more than 10,000 people a year while the Portland urban area is growing by more than 40,000 people a year, or more than 100 people a day. Despite, or more likely because of, hundreds of millions of dollars spent on growth planning, the region is doing a very poor job of producing the housing those people need to live in.

Metro, Portland’s regional planning agency, brags that not only is the region following most of the advice recently offered by the White House for making housing more affordable, it actually pioneered several of the techniques. Yet according to the Federal Housing Finance Agency, Portland-area housing prices are currently growing at 13 percent per year.

Metro has an article describing some recent housing developments that inadvertently reveals just why housing is getting so expensive.

  • Portland’s Central Eastside, a former warehouse district, was made into an urban-renewal area in 1986. Originally, the city focused on “job retention,” meaning it desperately tried to support businesses that were no longer viable. Since 2010, it has turned to housing, and 1,342 housing units have been built, or about 200 a year. Not much help for a city that grew by 12,700 people last year.
  • North Bethany is a 691-acre parcel that was brought inside the urban-growth boundary in 2002. Nothing much happened on it until 2007, when Metro gave Washington County $1.7 million to plan the area. The first home wasn’t built until 2014; since then, just 800 have been built.
  • Planners have been working on the Villebois neighborhood in Wilsonville since 2003. They created an urban-renewal district because the former farmland was obviously blighted and, in their opinion, could not be developed without government support. They eventually expect to build 2,600 homes, but after thirteen years have only managed 1,700.
  • Happy Valley is a distant suburb of Portland that was brought kicking and screaming into the nineteenth century by Metro, which insisted that it meet its share of the region’s population targets by building multifamily housing in a place that has very poor transportation connections with the rest of the region. Since 2000, the city has seen enough new homes built to house 14,000 people, including two new apartment complexes.
  • The city of Hillsboro began planning a neighborhood called South Hillsboro in 2006. Not a single house has been completed, but they hope to have some Real Soon Now, including a number of multifamily complexes for those who like to live in apartments 25 miles from downtown Portland.

It’s clear that Metro believes you can’t have new homes without a government plan that takes years to write and years more to implement. Only government can finance the infrastructure–roads, water, sewer–needed to support new homes. Only government can fix such “blighted” areas as vacant farmland or a former warehouse district. Actually, the only thing impeding development is government planners getting in the way.

Metro has known that the region would be growing ever since it wrote its first regional housing assessments in the late 1980s. Yet another Metro article reveals that the region has produced fewer new homes than new households in every year but one since 2008. The total shortfall has been more than 30,000 homes. Why haven’t regional and local planners been able to keep up with the demand for housing?

The contrast with Houston is stark. There, private developers do all the planning. Private developers finance all the local infrastructure. Private developers had a huge inventory of build able lots for the 132,000 people who moved into the region each year. Despite growing three times faster than Portland, the Federal Housing Finance Agency says that Houston-area housing prices grew by just 4 percent over the last year.

Metro planners want to control where housing is built and what kind of housing is built. All of its decisions simply make housing more expensive and less affordable. Yet it pats itself on the back for spending millions of dollars in public funds to get a few units of new housing. It should be getting out of the way and let private developers build housing in response to market demand, not planners’ ideologies.

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