Number of Families in Portland Metro Living Beneath 80% Mfi
2020 Value of Jobs Housing Affordability
Flat Production // Price-Burdened Households // Policy Impacts // Homeless & Affordability // Why this Matters
This report produced past the Portland Business Alliance, takes a closer expect at housing affordability across the greater Portland region. From the dark years of the recession, our Value of Jobs reports repeatedly note how an insufficient housing supply impacts affordability.
The demand for housing has outpaced new supply, and prices of homes and rents have increased, most acutely in the greater Portland region.
Unfortunately, in our region, the latest data points bear witness already clear signs that the production of housing is on the pass up. We needed to build 103,000 new units this decade to keep footstep with population demand, merely only congenital 79,500. With a projected pipeline of ii,500 new homes expected to be finished in 2022, we must explore ways to proceed pace with our region's need for housing.
Country and local policy makers are taking find. Many are leading the mode nationally on assuming new policy measures designed to increment housing production that is affordable to households at all income levels. But information technology will take several years and ongoing collaboration with both the public and individual sector for these policies to be implemented.
Information technology's time to jumpstart our chat around housing development so that all who live and work hither may afford a place to telephone call home.
Report at a glance
Apartment Production
In this building bike, flat structure in the region has occurred predominantly in the city of Portland, with more units under construction in the city than the rest of the region combined since 2013. See Effigy 1.
Tracking units nether structure is important because they are a leading indicator of housing supply. Flat buildings ordinarily take 24 months to complete. Assessing the number of units now under construction provides an estimate of what volition be completed in the next 2 years.
At the end of 2016, there was a large increase in construction activeness. This lasted through the peak of the cycle in mid-2018. The increase was fueled by many factors, including: rising rents; rise population and more people moving here; ascension incomes; and developers looking to implement projects prior to inclusionary housing requirements (in the metropolis of Portland just).
The do good of additional construction activity created a historical production of apartments, which resulted in slowing growth in rent rates beyond the region. Historically, rents and incomes have been aligned, and most apartments have been broadly affordable. In 2012, an boilerplate flat was affordable to a household earning sixty% to 70% of Median Family Income (MFI).
Cost-encumbered households
Housing affordability assumes that no more than 30% of gross income should be spent on housing. Today, that is not the case. Nigh half of all renter households in the region are cost-burdened (spending more 30% of gross income on housing).
Beginning in 2012, rents in the metropolis of Portland increased faster than incomes, resulting in an boilerplate one-sleeping accommodation apartment being affordable merely to households earning 100% of MFI in 2016 and 2017. Meet Figure 2.
Broad levels of housing affordability peaked in 2017. For many households in the region, incomes began to increase faster than rent. The number of apartments built slowed down. The pace of rent growth slowed at a time when the median income was increasing at 8% to 9% a twelvemonth. Equally a consequence, today an average apartment is now affordable to a household earning 90% of MFI.
Homelessness and Affordability
Housing affordability and homelessness are linked. 1 unexpected expense tin can get out a household unable to pay the rent. Many households earning less than 80% of MFI are spending more than one-half of their gross income on housing alone, leaving footling for other basic requirements like transportation, kid care and nutrient.
Despite the high cost of rent in the region, growing incomes have immune some households to save for down payments and contemplate home ownership. But if a household is earning $89,700 (100% of MFI), they may still be priced out of many neighborhoods.
Today, a household earning 100% MFI and expecting to spend xxx% of income on housing, may be able to afford a domicile priced at $385,000. The reality is, the boilerplate price of a home in central parts of our region, exceeds this. Even if a household is able to save xx% for a down payment, they may struggle to detect an affordable home, near their chore.
See Figure 4.
Policy impacts of housing production
Bold new policy measures, designed to increase housing production that is affordable to households at all income levels, are taking shape.
In the Portland region, we're just kickoff to sympathise the impact of House Bill 2001 (HB 2001), passed in the final days of the 2019 Oregon Legislature and signed into police force by Governor Brown in August 2019. This landmark legislation has been characterized as banning unmarried-family exclusionary zoning statewide. It does not ban single-family unit detached housing, simply requires cities with a population greater than x,000 to allow duplexes in areas currently zoned for single-family dwellings inside the urban growth boundary. Information technology goes farther for cities with populations above 25,000 and requires the permitted use of duplex, triplex, quadplex, and discrete cottage clusters. Every bit part of HB 2001, the state volition develop a standard land use lawmaking that will be used to define where unlike types of housing tin can exist permitted. If a local jurisdiction does non implement their own code, they will by default adopt the land's code based on their population size.
It is unclear exactly how Oregon's lawmaking will be written, as well as how any local jurisdictions will blueprint their own policies to comply with the legislation. The Metropolis of Portland's Residential Infill Projection (RIP) is the first of many potential local efforts to implement individually calibrated policies. The city estimates there is the potential to produce upward to 24,000 units over 20 years under RIP (i,200 units a year average). It is clear that parameters such as requiring off-street parking and maximum potential unit sizes will influence market place feasibility and the types of new construction built in the region. This map displays the results of a sketch model created to empathise where market need is greatest in the region. See Effigy 3.
Why this matters
Housing product across the greater Portland region is tapering off. Construction costs are upwardly by more than xx%. Population in the region has grown 11% since 2010. In gild to sustain a resilient economy, we need to find ways for building new homes to proceed through the end of this expansion and into the recession.
An ambitious housing supply push button volition serve 2 purposes. Information technology puts downward force per unit area on rents in an overpriced market place, and it supports thousands of middle-income jobs.
The magnitude of our housing and homelessness crises requires bold solutions, customs-wide collaboration, political will and the historic leadership to practise what is right, not what is easy.
Source: https://portlandalliance.com/advocacy/2020-housing-affordability.html
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