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Home costs put on the squeeze

Even those with higher incomes say they can't afford to buy in the city
by: L.E. BASKOW, Rita Beigh and her partner, Andrea Uehara, would like to move to Portland, but Beigh says they can’t afford it, even though their combined income is more than twice the median family income. The city’s median home price has gone up $86,000 since 2003.

When it comes to buying a home in Portland, Rita Beigh says she and her partner are caught in a Catch-22.

Together, they earn more than $100,000 a year, far more than the limits to qualify for the various affordable housing programs in the city.

But because Portland home prices have increased so much over the past few years, Beigh says she and Andrea Uehara cannot find a suitable house they can afford.

'We don't qualify for the affordable housing, but we can't afford the rest of the housing,' said Beigh, a software programmer who earns around $80,000 a year. Uehara, an organic food specialist, earns a little more than $20,000 a year.

According to the most recent report by the Regional Multiple Listing Service, the median home price in the Portland-Vancouver, Wash., metropolitan area was $256,000 in February. That's a jump of $86,000 since 2003, the last year prices increased by single digit percentage points.

Beigh said she and her partner could afford a home in the $250,000 range, but have not yet been able find anything suitable for that amount. Most homes they've seen cost $300,000 or more - more than they can afford.

'Everything we've looked at is either an older home that needs a lot of work, or a new condo the size of a postage stamp,' Beigh said.

City leaders realize that area home prices now are unaffordable for many people. At the urging of Commissioner Erik Sten, the City Council approved a resolution requiring the Portland Development Commission to spend 30 percent of its urban development funds on affordable housing.

The housing will be limited to families earning up to 100 percent of the median family income, as determined by the federal Department of Housing and Urban Development - around half of what Beigh and Uehara make.

'I don't oppose any program to help people who earn $7 an hour. They deserve all the support they can get. But with today's housing prices, a lot of other people need a break, too,' Beigh said.

Sten is acutely aware that many people earning more than 100 percent of the MFI are priced out of the housing market, said Margaret Bax, the housing policy manager in his office.

But, according to Bax, city resources are so limited that they must be reserved for those most in need. Bax said Sten is working with Mayor Tom Potter and a number of city agencies to develop programs to help more people buy homes in town.

'We recognize the problem, but city funds have to be prioritized to those who need the most help. Hopefully, other tools and incentives can be found in the near future,' Bax said.

Subsidies get blame

Beigh is especially upset about the housing situation because she was born and reared in Portland. She grew up in the Mount Tabor area and lived in California after a stint in the U.S. Marines, but returned to Portland because she missed it.

'I grew up in this town, and now I can't afford to live in it,' she said.

Both Beigh and Uehara work near downtown Portland. But they live in Hillsboro in a townhouse they bought in the late 1990s for $130,000. That was the most affordable home they could find at the time, but Beigh said they always intended to sell it and move to Portland when their incomes increased.

Instead, Portland-area home prices increased faster than their earnings, leaving them commuting on the Sunset Highway.

'We hate the traffic but we don't have any choice,' Beigh said, explaining that they both work too far away from the MAX light-rail line to use the transit system.

Beigh believes city policies have helped drive home prices out of reach. She cites the tax breaks and other incentives given to developers in the Pearl and South Waterfront districts as examples of public subsidies for high-priced housing. In both areas, one-bedroom condos start at more than $290,000.

Although Beigh works a short distance from the South Waterfront, she cannot afford the new condominiums there and does not believes she and Uehara would benefit from the city-mandated affordable housing that has yet to be built.

'The middle class is getting screwed in this city,' she said.

Prices have risen quickly

Even though the housing market has slowed down in recent months, the price increases over the past few years have been substantial, according to figures compiled by the RMLS.

From 1996 to 2003, Portland-Vancouver metropolitan area home prices increased at 6.1 percent a year or less. But since then, the annual percentage increases have been in the double digits - 11.2 percent in 2004, 19 percent in 2005 and 13.8 percent in 2006.

The results pushed the median home price up from $170,000 in 2003 to $256,000 in 2006 - a price that held steady during the first two months of 2007. The RMLS will release figures for March next week.

The prices are not the same throughout the region, according to the RMLS figures. In general, prices are higher in the city of Portland than outlying areas - in some cases, far higher.

'I grew up in a small house on Mount Tabor. It was nice, but nothing special. Compared to what we've seen, that house would be priced at $700,000 now, which is ridiculous,' Beigh said.

John Miller, executive director of the nonprofit HOST Development Inc., agreed that many people with good jobs are being priced out of the housing market. HOST builds and sells lower-priced new homes with additional discounts for people earning less than 100 percent of the MFI.

'As prices continue to skyrocket, even people earning more than 100 percent of the median family income are having trouble affording a house,' he said.

Graphic:

Portland area home costs


Tell us your story

We want to hear your housing stories.

The Portland Tribune publishes special in-depth reports on issues facing the region several times a year. They are called Rethinking Portland, and the next one, scheduled for June 26, will focus on housing costs and choices.

As part of our research, we are inviting readers to e-mail us about how rising costs and types of available housing are affecting their choices on where to live.

Why do you live where you live? What choices have you had to make in order to afford housing? Has increasing density changed the types of housing available? And with about 1 million more people expected to move to the region over the next 20 years, how do you think that will affect your choices in the future?

Please e-mail your stories to Rethinking Portland editor Connie Pickett at This email address is being protected from spambots. You need JavaScript enabled to view it.. We may contact you for additional information for the section.