Oregon is responding to its housing affordability crisis by doing all the wrong things. The crisis is due to a shortage in supply which in turn is due to urban-growth boundaries.
So the legislature legalized inclusionary zoning ordinances and Portland passed one. Such ordinances require developers to provide a certain percent of the homes they build to low-income people at below-market rates. In response, developers are building fewer homes, exacerbating the supply problem. City officials “hope the slowdown is temporary,” but that hasn’t proven to be the case in other cities that passed inclusionary zoning ordinances.
Now the state legislature is considering a bill to provide $5 million to help first-time home buyers make down payments on homes. This will have the effect of increasing demand, which will only drive up prices even more.
The real problem is that Oregon is in dewillamette* about the real problem. Few politicians dare to admit that the land-use restrictions their predecessors imposed on the state decades ago are the reason for high housing prices.
The supposed purpose of those rules was to protect Oregon’s farmlands. Now, the extremely wealthy are buying up farms and ranches and turning them into hobby farms. It’s not quite as bad as Hawaii, where land-use rules destroyed the state’s agricultural industry by making housing too expensive for farm workers, but it is still an sad unintended consequence of oppressive government regulation.
* Like the Nile, a north-flowing river in Egypt. the Willamette is a north-flowing river in Oregon.