Portland can expect higher rents starting next year
What's happening: The city's pipeline of new apartment construction is drying up.
- The number of new apartments under construction in the Portland metro is down 27% compared to the same period one year ago.
- According to a city analysis, Portland will need to add approximately 120,000 housing units at all income levels over the next 20 years if it plans to curb the crisis.
- "There is still a shortage due to historical underproduction," Josh Lehner, an economist for the state, recently wrote.
- Rising interest rates have not made it any easier because it makes "project financing difficult," he said.
Context: For now, rents are stable — mostly because people tend not to look for new housing until the spring and summer months, Mike Wilkerson, an economist for ECONorthwest, told The Oregonian.
- Once warmer weather comes along, "more affluent renters" who would've sought out fresh-to-the-market apartments will now be competing with others for older builds, driving up the price of rent.
The intrigue: A few other cultural factors could also contribute to rising rent.
- For example, even though Portland's population has remained stagnant for years, a spike in household formation (spurred on by the pandemic) means more people are interested in living on their own without parents or roommates, fueling demand, according to Lehner.
The bottom line: Oregon is a long way off from meeting Gov. Tina Kotek's goal of building 36,000 homes annually over the next decade — an issue she plans to pressure the Legislature to move on during the short legislative session next year.
More Portland stories
No stories could be found
Get a free daily digest of the most important news in your backyard with Axios Portland.