“The portion of income Portlanders can expect to devote to housing has increased from 25 to 35 percent. Renters moving from major West Coast cities are used to paying 40 to 50 percent of their income for housing” – Yes, Rent Control.
The quote above is from a Portland developer that appeared on Oregonlive. The cost of home ownership and rent in the Metro area have been out of sync with income for decades.
Portland government hates the idea of rent control. Improving old properties and knocking down old structures to build new apartment complexes has the appearance of prosperity. You slap on a rent control and developers begin to cry.
The Portland city government is also quick to point out correctly that rent control is prohibited under Oregon state law, but not written into the state constitution. Prohibited yes, but also very changeable by the legislature.
The rent problem is real throughout the state, however the confluence of low income population, highest cost of housing and the potential job market is within the city of Portland itself – not in Salem, Grant’s Pass or Enterprise.
And rent control for Portland need not be based on the models by other cities. Create a formula based on property value, number of units and square feet per unit, then share of city services per square feet of unit. Analyze average costs of maintenance and city fees. Generate a rent value per square foot, then create a rent cap based on the area somewhere above that value, so that rental property owners can make a profit. Then ensure that any capital improvements to the property are not taxed, so that the property owner is incentivized to improve the quality of the property. But what if the owner wants to charge more?
That’s where the city sees some additional money. Collected rent over the cap are treated as pure profit and you apply a high city tax to that. In turn, a portion of that high city tax goes back to subsidizing housing and infrastructural (yes, street) improvement.
Portland would not even need to do this city wide, but only in neighborhoods where rentals increase at a rate higher than 5% or so per year.
I see a direct correlation between the push for a $15 an hour minimum wage and the outrageous increases in rents. The additional money you get from such an increase will only end up going towards paying out of control rents – in Portland.