All Too Familiar: Affordability and Rental Crisis in Portland

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Working class priced out, kicked out in new Portland housing boom

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Despite 22,000 new apartments coming on line in the metropolitan area since 2012, more than half in Portland proper, vacancies remain practically non-existent. That has freed apartment owners to charge eye-popping rents — think $1,200 for a 400-square-foot studio, as much as double that for a one-bedroom.
The average rent in Portland has jumped 41 percent since 2010 to $1,242, according to Axiometrics, a Dallas real estate analysis firm.
The boom raises troubling issues of economic inequality, as rent hikes have spiraled far beyond workers’ wage increases. The posh new apartment houses are prevalent on Portland’s east side, historically the gritty home to the city’s working class. Even developers share foreboding that the central city is becoming a playground for the affluent while the young and the old and the people in the service economy no longer can afford to live there.
Critics have coined a nifty phrase for the trend — “economic apartheid.”
Affordable housing has become a hot political issue up and down the West Coast as prices continue to escalate. But addressing the downside of popularity and growth is no easy task. Said one local planner: “This is capitalism. How do you fight it?”
While bureaucrats mull policy, people are struggling to stay in their homes.
“We’re getting a hundred calls a week from local people in some sort of housing crisis,” said Bobby Weinstock, of Northwest Pilot Project. …

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The target market for the developers are the thousands of highly paid tech workers now working in the central city, particularly transplants from the Bay Area and Seattle who view Portland housing as a bargain.
“The city is really attracting a lot of young, educated people and those people are attracting companies with jobs,” said Sam Rodriguez of Mill Creek Residential, a Texas-based developer.
It wasn’t too long ago that condominiums were developer’s product of choice. But today, it’s all about rentals. Between Millennials who can’t borrow or don’t want to be tied down and baby boomers who want to retire in the central city, the urban apartment market is hot.
“You have this confluence of the two largest demographics in the country,” said Homer Williams, a Portland developer. “You’ve got the baby boomers downsizing and the Millennials who can’t upsize.” …
Because of the strong in-migration, vacancies hover at just 3 percent, which gives landlords enormous leverage to raise rents. Portlanders suffered a 15 percent year-over-year average rent increase in the 12 months ended in August, the steepest increase in the country, according to Axiometrics.
As a result, Williams said, the portion of income Portlanders can expect to devote to housing has increased from 25 to 35 percent. Renters moving from major West Coast cities are used to paying 40 to 50 percent of their income for housing.
The escalating rents in Portland have attracted the biggest institutional investors in the world, who are buying apartment houses at hefty premiums.
Like home-flippers from the last housing boom, the developers are now reselling buildings only recently completed to big institutional investors. …
Tenants are often forced out by building renovations or rent increases they can’t afford.
Advocacy groups struggle to bring attention to the impact. The Community Alliance of Tenants claims hundreds of Portlanders have been forced out by landlords seeking higher rents — known in the rental business as a no-cause termination. Last week, the group declared a renters’ state of emergency and called for a year-long moratorium on no-cause terminations and stricter notice of rent hikes.
The next day, Portland Commissioner Dan Saltzman said he would introduce new tenant protections requiring that landlords give a minimum of 90 days notice of a pending termination – up from the current 30 days.

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