How Portland got into its housing mess, in four charts
How a pair of very different recessions created, and then destroyed, Portland’s reputation for cheap housing
by Michael Andersen | July 31, 2017
In most U.S. cities, housing is not in itself a major problem for most people.
Poverty is a problem. Exclusion, oppression and discrimination are problems. Finding good jobs is a problem. Building a happy life is, as always, a problem. And housing relates to these problems and others. Because it’s essential for all of us, it’s often the means by which people are oppressed or exploited or locked into systems beyond their control.
But for most people in most cities, housing itself is not a root problem. And if you are in the richer 80 percent of the population, you can basically afford a decent home.
The answer is complicated, but the four charts that follow offer one explanation that’s relatively easy to follow. For Portland, it’s been a problem 30 years in the making.
1) Our population started growing steadily
Almost exactly 30 years ago, people started moving to Multnomah County in larger numbers, including many young people who would soon have kids. The county’s population started to grow in 1987, and has kept a fairly steady clip ever since:
Hidden inside the early years of that long population boom, among other things, is the mass displacement of many Black households from inner North and Northeast Portland — Portlanders forced to play the role of canaries in our housing-shortage coal mine.
There’s also one little dip in the second half of the chart. Do you see it? It happened in 2004.
So what happened in Multnomah County right before 2004?
2) We suffered a severe regional recession
The yellow line is the national unemployment rate. The blue line is the local unemployment rate.
The 2000 tech collapse and the long, slow decline of the Northwest’s wood-products and metal industries sent the Portland area into a severe regional recession.
These were the years when law professor Jack Bogdanski kept a popular blog dedicated to deriding vacant downtown storefronts and the sale of “Weird Isn’t Working” bumper stickers.
3) People started to move away, temporarily leading to very low housing prices
Finally, after a few years of economic doldrums, even stubborn Portlanders started to get the message. For the first time in a generation, the county’s population declined. In 2004, for the first time since before the population boom began, “vacancy” signs were everywhere.
But the spike in vacancies didn’t stop homebuilders. With the help of rock-bottom interest rates and the usual delayed reaction of an industry that takes three years to bring its products to market, they kept on building homes through the regional 2001–2005 recession.
That combination — high vacancy rates in old housing, continued construction of new housing — created a bad-economy, low-rent situation that was, despite its flaws, a cheap place to rent a room. The effects were captured for posterity by Portlandia and the New York Observer. Today this era is remembered by the city’s newest zeitgeisty bumper stickers: “Make Portland Shitty Again.”
4) The 2008 recession halted homebuilding for three years, but people kept moving here
Around 2005, Portland’s economy picked up sharply again, briefly getting in line with the national economy just in time for the housing bust of 2007 and the global financial collapse of 2008.
With almost no banks able or willing to make loans, homebuilding in Portland virtually collapsed. But (as shown in the first chart) people kept showing up in town. Whatever the reason, the county grew faster than in the 1990s. From 2010 to 2012, Multnomah County added 32,000 residents but permitted just 4,000 new homes.
Our housing market has been trying to recover from those years ever since.
The post-recession housing shortage has, of course, been financially terrific for landowners and landlords. Some landlords realized quickly that they had a golden opportunity to hike rents year after year while keeping their rental homes filled. Others took a few years to realize this.
That’s where we are today.
Unfortunately, getting out of a housing crisis can be a lot more complicated than getting into one. The city is mounting a multi-pronged effort to escape this one. But as we talk about how best to do that, it’s at least useful to know how we got into this mess.
Portland for Everyone supports abundant, diverse, affordable housing. This is a reported blog about how to get more of those things. You can follow it on Twitter and Facebook, or get new posts by email a few times a month.