Metro urges regional approach to crisis of skyrocketing costs

All parts of the region experienced double digit rent increases from 2011 to 2015, with the highest in North Portland. Source: Published by Metro with data from Multifamily NW and Axiometrics Johnson Economics.Rising home costs and stagnating wages have created a housing crisis across the region, not just in the trendy Portland neighborhoods where few can afford to live.

The situation is worst for renters, whose incomes have not kept up with rent increases.

According to figures released by Metro, the elected regional government, rents have increased 63 percent since 2006. The increases have ranged from 18 percent in the Happy Valley to 34 percent in Hillsboro-Forest Grove area and 71 percent in North Portland.

But the income of renters has increased only 39 percent over the past nine years. As a result, poorer renters are being forced to move away from employment centers, increasing their commuting times and transportation costs.

The situation is better for home buyers, whose incomes have increased 22 percent over the past nine years, while the price of a single-family house has increased only 16 percent. But they are a shrinking percentage of current residents and the 400,000 more people Metro expects to live here by 2035.

“The fundamental problem is, we are growing as a region. We’ve had a lot success maintaining our quality of life and we have a strong economy. But not everyone is doing well. Especially for low-income people and minorities, it’s harder to get by than 10 years ago,” says Metro Councilor Sam Chase.

Chase is leading Metro’s first look at housing affordability in the region. Called the Equitable Housing Initiative, it has pulled together income and housing information from Multnomah, Clackamas, Washington and Clark counties. It has also looked at programs that have created large numbers of affordable housing in other metropolitan areas.

The information, released in a report titled “Opportunities and challenges for equitable housing,” was discussed at the first regional summit on equitable housing last Monday in Portland. It drew elected officials from all four counties. They included the entire Metro Council, Multnomah County commissioners Jules Bailey and Loretta Smith, Washington County Commissioner Dick Schouten, Beaverton Mayor Denny Doyle, Wilsonville Mayor Tim Knapp, Forest Grove Mayor Pete Truax, Lake Oswego Councilor Jeff Gordon and Sherwood Councilor Jennifer Harris.

Also present were representatives of nonprofit agencies from throughout the region that build affordable housing and others interested in addressing the housing crisis.

“No way can Portland meet this challenge by itself. Everyone has to be involved,” Chase says.

What Seattle has done

Those at the summit heard from experts who explained there is no “one size fits all” approach to creating more affordable housing. Instead, each community must come up with its own plan, informed by the experiences of cities around the country.

Joining them was Seattle Mayor Ed Murray, who spoke on the history of his city’s efforts to build more affordable housing.

A recurring theme was the need for money to build more affordable housing. The federal government was faulted for cutting its affordable housing in half over the years.

“We are not going to be able to solve this problem unless the federal government returns to its historic role,” Murray says.

Unlike Portland or any other city in the region, Seattle voters have approved one bond measure and four property tax levies to fund affordable housing since 1981. The spending has created more than 12,000 units. Murray is preparing a bond request to double that number. Local affordable housing advocates have been talking about state, county or city bonds for affordable housing, but no specific proposal has emerged to date.

Incentives for developers to create more affordable housing were also discussed. They ranged from tax exemptions to additional height allowances. Each city would need to tailor a program to meet its needs.

Zoning code changes to encourage more affordable housing were also discussed. One idea was to increase density in urban centers and along transit lines. Another was to revive the so-called “missing middle” of housing — duplexes, triplexes and fourplexes in residential neighborhoods. Metro’s figures showed the construction of residential properties with two to four units has plunged over the years.

Many at the summit also hoped the 2016 Oregon Legislature would repeal the state ban on allowing cities to require developers to include a certain number of affordable units in their projects.

“There are a wide range of tools already available and we hope the Legislature will give us more. But there’s really a lot you can do now,” Chase says.

Portland responds

Close-in Portland neighborhoods have seen the highest rent increases in the region, according to the Metro figures. Between 2006 and 2015, rents increased 34 percent in Southwest Portland — equalled outside the city only by the Hillsboro-Forest Grove area. Rents increased 40 percent during that time in both downtown and East Portland. And they increased 71 percent in North Portland.

As a result, average monthly rents are now $1,828 in Southwest Portland, $1,172 downtown, $1,762 in East Portland and $1,811 in North Portland. That’s according to Johnson Economics, which contributed to the Metro report. Other research shows that lower income people and families cannot afford these rents and have been locating out of the city.

“About 23,000 private (multifamily) units have been built over the last three years and less than 3 percent of them are affordable by any stretch of the imagination. Most are luxury apartments,” Commissioner Nick Fish said during a recent City Council work session on the Comprehensive Plan update that is intended to govern how Portland grows over the next 20 years.

The council became alarmed about the effects of gentrification in North and Northeast Portland after community protests in February 2014. At Mayor Charlie Hales’ urging, the council approved an additional $20 million in urban renewal funds to help longtime residents stay in their homes and build more affordable housing. But ground is only now ready to be broken on the first affordable housing project funded with the money, the 81-unit Grant Warehouse at 3368 N.E. Martin Luther King Jr. Blvd.

Later, after declaring a housing state of emergency last October, the council agreed to spend another $20 million next year to create more homeless shelters, transition programs and affordable housing projects. Multnomah County Chair Deborah Kafoury promised a $10 million match, with the money to be prioritized by the A Home for Everyone partnership that includes the city, county, Gresham and Home Forward, formerly known as the Portland Housing Authority.

But finding the additional $20 million may be tough. Hales has directed all general fund bureaus to recommend 5 percent cuts in next year’s budgets to help free up the funds. The cuts submitted by the Portland Police Bureau, Portland Fire & Rescue, and Portland Parks & Recreation all eliminate popular or essential programs. It is unclear how many of the potential cuts Hales will include in his proposed budget or whether a majority of the council will support them.

The council is also talking about including incentives for developers to add affordable housing units to their projects in the Comprehensive Plan update. But progress is slow. For example, during the recent work session, the council spent a half-hour discussing whether to allow developers to build taller buildings in exchange for adding affordable units. But then the council members realized the units they were discussing would not be affordable to the poor. They would instead be considered affordable by those earning 80 percent or more of the median family income in the region.

“The crisis is for those earning zero to 30 percent. Eighty percent is not where the need is,” said an exasperated Commissioner Amanda Fritz.

At the same work session, Commissioner Steve Novick said he wants to encourage more “middle housing” in the Comp Plan, as it is commonly called. It was unclear whether the necessary zoning changes could be identified before the council takes a final vote in April or May, however.

And the council is promising to engage the entire community in discussions about requiring new private residential development to include a certain percentage of affordable units if the 2016 Oregon Legislature lifts the ban on so-called inclusionary zoning. Commissioner Dan Saltzman, who is in charge of the Portland Housing Bureau, has introduced a resolution requiring the appointment of a panel including developers and affordable housing advocates to advise the council on how to implement such requirements. It could be approved this week.

“We will engage the entire community,” Saltzman says.

What is Equitable Housing?

For the purpose of the Equitable Housing Initiative, Metro uses the working definition of equitable housing as: diverse, quality, physically accessible, affordable housing choices with access to opportunities, services and amenities.

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