Is Portland the next San Francisco? 4 takeaways from Metro’s discussion
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on September 21, 2015 at 7:00 AM, updated September 21, 2015 at 7:02 AM
One of the many signs people in Portland are concerned about the cost of area housing: there wasn’t an empty seat in the audience for a Metro panel discussion on the subject, and it was Friday at 8 a.m.
The regional planning agency hosted Kim-Mai Cutler, a reporter formerly of Bloomberg and The Wall Street Journal who now writes for TechCrunch. At nearly 13,000 words, Cutler’s “How Burrowing Owls Lead to Vomiting Anarchists (or S.F.’s Housing Crisis Explained)” provides a comprehensive look at what’s gone wrong in San Francisco, where the median rent price, according to Zillow, is $4,600.
It’s not quite that bad yet in Portland, where the median rent is $1,700. But costs arerising fast, and organizations like the Community Alliance of Tenants have declared a “renter state of emergency.” Metro invited Cutler with the hope of learning from San Francisco’s troubles and preventing the situation in Oregon from growing worse.
Joining Cutler were economist Joe Cortright, of City Observatory; Elisa Harrigan, the affordable housing initiative program officer at Meyer Memorial Trust; and developer Eli Spevak, of Orange Splot LLC. Willamette Week reporter Aaron Mesh served as moderator.
Cutler began the event with a presentation on how and why the Bay Area became so unaffordable over the last 40 years. The panel discussion followed, and the group took questions from the audience at the end.
Here are four ideas that stood out:
People are moving back into cities, but supply can’t catch up
Suburban homes used to sell at a 9 percent premium above homes in Portland, Cortright said. Less than a decade later, the opposite is true: Portland homes now sell at a 7 percent premium.
“The cause of what’s going on is there’s a huge and increasing demand for urban living in the United States. … [People] are doing what a lot of urbanists hoped they would do,” Cortright said. But the supply of urban spaces, he added, hasn’t increased “anywhere nearly rapidly enough.”
In the Bay Area, the problem has been exacerbated by immense industrial growth in the Silicon Valley suburbs where large tech firms make their headquarters. Those towns, Cutler said, haven’t allowed for the construction of housing to keep up with the companies’ thousands of new employees.
“When suburbs…limit the amount of growth,” Cutler said, “the growth goes somewhere else and into the urban core.”
The panel’s consensus: rent control and inclusionary zoning don’t work
Rent control does work, Cortright said, for those who have rent-controlled apartments – but only them.
“It drives up the price of housing everywhere else” by further constraining the market-rate supply, he said.
And in Portland, developers have built more affordable housing in the Pearl District and Old Town in 10 years – 2,200 units as of 2014, below the city’s goal of more than 2,400 – than all of San Francisco got as a result of inclusionary zoning since 1992.
Inclusionary zoning is a policy by which jurisdictions require all housing developments to include a certain number of affordable units.
“If there was a silver bullet,” Harrigan said, referring to one panacea-like solution, Portland would have done it by now.
Cutler, with support from other panelists, proposed a land-value tax. It would be assessed on the underlying value of a property regardless of how well it is used or improved. Cities could then dedicate those revenues toward building affordable housing.
The ‘elephant in the room,’ according to one panelist? Parking requirements
“We have inclusionary zoning for cars,” Cortright half-joked.
He said forcing parking requirements on developers constrains the supply of housing. Fewer units get built, which drives up the prices of houses and apartments.
“Stop taxing houses to subsidize cars,” he said. Property taxes, after all, pay for police officers and firefighters, who spend significant time dealing with traffic control and car accidents, he added.
Cortright was also in favor of abolishing free parking in certain neighborhoods in an effort to get people out of their cars and onto public transit and bicycles. The conversation about affordability, he said, needs to focus not just on housing but on lifestyle, as well.
What about NIMBYs?
It’s an old idea: the “Not In My Backyard” crowd supports smart growth, density, transit-oriented development and affordable housing, as long as it doesn’t happen in their neighborhood.
But are efforts to preserve neighborhood “character” causing Portland’s dwindling stock of affordable homes?
“In many cases the objections” to projects that would bring housing to a neighborhood can seem “a little extreme,” Cutler said.
And though a city can’t build its way out of a housing crisis, Spevak said, “we have to let developers build more homes.” Increasing the supply can prevent prices from rising as fast as they are now, he said.
Spevak thinks city officials and developers can find ways to “creatively and discreetly slip small homes into the existing fabric.”
But he cautioned against characterizing neighborhood activists with broad strokes.
“There are a lot of folks in the neighborhoods who are willing to take on additional homes,” Spevak said.
— Luke Hammill