Portland: Build It, and They Will Come


Portland is not a cheap city to live in.

According to a 2015 report by the Greater Portland Council of Governments, the median rent in Portland is $1,183—30% higher than what the study defines as affordable. Demand for rental units in Portland has far outstripped supply, and the prices reflect that.

Basic economics tells us that Portland needs to increase its supply of rental units in order to meet demand. Typically, this means that luxury apartments will be built first, satisfying the most lucrative side of demand first. Some Portlanders will complain that this does nothing to help them. After all, they can hardly afford the apartments they’re in, let alone any newly built luxury condominiums or apartments. If you keep your focus narrowed on the short term results for lower income families, you’d think they’re right.

That’s why it’s important to take a step back. Think about the higher income families renting in Portland—they’re affected by the shortage of rental units in the city as well. Due to the lack of options available, many higher income renters are forced into smaller and less luxurious apartments than they’d prefer. These will be the first people to take advantage of the new higher quality apartments and condominiums, leaving their older apartments behind.

These newly vacated apartments will now have to find new tenants, and as the higher income tenants have moved on to greener pastures, landlords will have a harder time finding tenants who can afford their rent. In order to bring in middle income tenants and fill their vacant apartments, landlords will be forced to lower their rents. The process will then repeat as middle income tenants move into the now affordable apartments, forcing the landlords they leave behind to lower rents and draw in lower income tenants.

So while at first glance it appears that new apartment construction only benefits the well-off in Portland, in reality it helps all renters in the city by creating more housing options (increasing supply) and driving down rents. It’s basic economics.

A small number of Portland residents, however, have fought development in the city tooth and nail. Take the Midtown project for example. A few years ago, a developer came into Portland looking to create four 14-story buildings that would house 850 rental units. The project would have taken place on, frankly, an eyesore of a lot in the Bayside neighborhood. Not only would the project help fill the city’s pent up demand for additional rental units, it would also have made a less than appealing part of Portland look a little better.

Not everyone saw it that way.

Keep Portland Livable, a group that claims more than 600 members, rose up in protest at the new project. According to them, the Midtown project “threatened Bayside with its size, form, and deadening impacts on walkways and streets.” Basically, they didn’t like how the new project looked.

So because the project didn’t meet their aesthetic standards, they filed suit in court against the project on a number of technicalities even though the city had already approved of the project. Rather than fight this in court, the developer drastically changed its design to appease the mob. The new design cut the number of rental units in half, depriving the city of much needed housing. The project then spiraled further out of control with the developer’s suggestion to build a pair of hotels in lieu of two of the apartment buildings. The city threatened to restart the approval process, and the developer threatened to sue. All this because a few Portland residents didn’t like the way a building looked.

Eventually, the city and the developer settled on the plan for four significantly smaller buildings that would house only 440 rental units. Keep Portland Livable has deprived Portland residents of  over 400 rental units that would have helped drive down the cost of renting in Portland over aesthetic concerns. While they call themselves Keep Portland Livable, what they’ve actually done is keep Portland unaffordable for thousands of lower income families. I doubt they see the irony in that.

Of course, Keep Portland Livable doesn’t want people to think about how they lost 400 much needed rental units. This is how they describe their involvement in the Midtown project:

“Midtown’s 440 apartments — the largest single infusion of new Portland housing in decades — will be built in the Bayside neighborhood within the next two years as a result of the work of Keep Portland Livable and new leadership in City Hall. If it had not been for Keep Portland Livable, a single tower with fewer than 180 apartments would have been built[.]”

Not only do they not admit their role in cutting the project in half, and in so doing, keeping Portland rents artificially high, they also claim that they’re responsible for adding over 200 apartments to the city. Who do they think they’re kidding? That is a complete distortion of the facts.

Portland desperately needs more apartments to drive down rents and make Portland affordable for low income families. Residents who try to fight against development through lawsuits, scenic ordinances, or restrictive building requirements should think through the consequences of their actions. They’re not just fighting against wealthy developers, they’re fighting against the people who are barely making rent.


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