Cost of housing Shelter for the homeless Public safety Traffic congestion K-12 schools quality Access to healthcare Availability of good jobs Road maintenance 0%
5%
10%
15%
20%
25%
30%
35%
40%
0 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Units in 000s
U.S. Housing Starts, Annual and Trailing 10 Year Average
Multifamily
1500
Source: U.S. Census Bureau and HUD
Single Family 10 Year MA
2500
2000
Housing production decreasing since 2016
1000
500
U.S. Housing Starts to Household Formation (5 year moving average)
1.70 1.60 1.50
Underproduction from 2011 to 2018
1.40 1.30 1.20 1.10 1.00 0.90 0.80 0.70
1.1 is the long run ratio of housing starts per household formed nationally
0.60 0.50
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0.40 Source: U.S. Census Bureau and HUD
0.89 Housing Starts per Household Formed 2000 to 2016
Source: U.S. Census, Moody’s Analytics, ECONorthwest Calculations
Underproduction of housing
6 Source: ECONorthwest and Up For Growth
$1,400
100% MFI
Average Monthly Rent
$1,200
2017 to 2018 Income + 9% Rent +2.1%
1 Bedroom Avg. Rent
$1,000
$800
60% MFI
$600
$400
2000
2001
2002
2003
2004
2005
Source: Costar, HUD, ECONorthwest Calculations
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Every 1% increase in population is associated with a 2.2% increase in housing prices
City of Portland Multifamily Units Existing
Under Construction
9,000 8000
8,000 7,000
6,560 5900
6,000 5,000 4,000 3,000 2,000
3,019
1,600
1,000 -
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
U.C
Average Building Level Rent Change (12 months through August)
2017
2018
6.0% 5.0%
5.0%
4.8%
4.0% 3.0%
2.3%
1.7%
2.0% 1.0%
1.4%
0.9% 0.2%
0.0% -1.0% -2.0%
-2.4%
-3.0%
Less than $1k
$1k to $1.5k
$1.5k to $2k
More than $2k
-2.7%
-3.1%
-1.2%
-3.3%
Change from 2017 to 2018
Source: Axiometrics, ECONorthwest Calculations
Below 60% MFI
Rent explains about 50% of variance in homelessness rate for a metro 0.50% LA
Share of MSA population that is homeless
0.45%
NY
0.40%
San Jose Seattle
0.35%
San Francisco
Las Vegas
0.30%
Portland
0.25%
Tampa
0.20% 0.15% 0.10% 0.05% 0.00% $500
$750
$1,000
$1,250 $1,500 Median Gross Rent
$1,750
$2,000
$2,250
Portland Metro has the 8th highest rate of homelessness nationally Source: ECONorthwest analysis of the U.S. Department of Housing and Urban Development, 2017 Point-In-Time Count and the U.S. Census Bureau 2016 American Community Survey data, Top 50 MSAs
Web app available at: https://www.upforgrowth.org/supply-units-price
Web app available at: https://www.upforgrowth.org/supply-units-price
Web app available at: https://www.upforgrowth.org/supply-units-price
Web app available at: https://www.upforgrowth.org/supply-units-price
High cost of housing
Personal circumstances
Don't know
0%
10%
20%
Source: KGW/DHM Research, Portland Homeless Survey, October 5, 2017
30%
40%
50%
60%
https://www.oregoncf.org/Templates/media/files/reports/OregonHomelessness.pdf
9,000
Count of Homeless Persons
8,000 7,000
Four-county total 5,548
6,000
5,967
5,000 4,000
4,177
Multnomah 3,801
3,000 2,000 1,000
Clackamas
749
Clark
544
Washington 0
2007
2009
497 2011
2013
2015
Source: ECONorthwest analysis of HUD Point in Time Counts, 2007-2017 Note: These data come from the HUD CoCs: Portland-Gresham-Multnomah County CoC, Clackamas County CoC, Hillsboro/Beaverton/ Washington County CoC, and Vancouver/Clark County CoC.
2017
9,000
Count of Homeless Persons
8,000
7,566
All
7,000 6,000
6,391
5,967 Episodic
5,000
4,287
4,000 3,000 2,000
1,680 1,175
Chronic
1,000 0
2007
2009
2011
2013
2015
Source: ECONorthwest analysis of HUD Point in Time Counts, 2007-2017 Note: These data come from the HUD CoCs: Portland-Gresham-Multnomah County CoC, Clackamas County CoC, Hillsboro/Beaverton/ Washington County CoC, and Vancouver/Clark County CoC.
2017
1. Market-based housing supply response 2. Means-tested, subsidized housing 3. Targeting programming for high-cost, highneeds individuals 4. Emergency shelters 1 2 3 4
HUD Family Option Study: randomized control trials assigned families vouchers Long-term: 5% of families had shelter stay 3 years after Short-term: 16% of families had shelter stay 3 years after
But HUD assistance is limited 32,000 households receive some HUD assistance 56,000 households in Portland under 50% MFI with severe housing cost burden Would cost up to $500 million annually to provide vouchers to to 56k households
One involves ~1,700 individuals struggling with mental/physical disabilities, substance abuse, criminal records, or circumstances creating housing barriers. Every community in the U.S.—large and small—has people who will struggle to maintain stable housing without significant, sustained support. Portland is not unique.
The second involves tens of thousands of individuals—the short-term homeless and the growing number of severely cost-burdened households on the verge of homelessness. Portland’s second crisis is worse than in most other places, and it has two causes: a dysfunctional, under-supplied regional housing market and an unresponsive, discretionary federal rental assistance program.
• Amount of construction activity and permitting decreasing in the City of Portland (and the region) • Inclusionary Housing is not the only reason • Market conditions changing (construction cost increases, rent stagnation, slow absorption) • Vested units masking true impact of policy • Increase in construction and permitting of buildings with 19 units and fewer (exempt from IH) • Policy calibration outside of central city is incentivizing production in areas with lower rent
PHB has not produced the two year summary report to date as required
3,000 Remaining Vested Units in Land Use Review – Expire Feb 2020 2,000 of the 3,300 units in land use review are speculative projects, unlikely to go forward in near term
2018 Units in Permit Applications (5,014 total units) 2,500 2,000
2,138 1,709
(1,167 exempt units)
1,500 1,000
625
542
12-20 Units
Less than 12 units
500 0 Projects Subject Pre-IH Vested to IH or Affordable
Total Units by Permit Applications (20 Units or More) 8,000 7,000 6,000 534
5,000 4,000 3,000
1,709
2,000 2,138
1,000
734
0 2010
2011
2012
2013
2014
Pre-IH Units
2015
Post-IH Units
2016
2017
2018
2019
Total Units by Permit Applications (12-19 Units) 700
600
500
Units
400
300
200
100
0 2010
2011
2012
2013
2014
2015
2016
2017
2018
YTD 2019
• City of Portland and Metro Affordable Housing Bonds looking to acquire units to preserve affordability <60%MFI (targeting $175k or less per unit) • Emergence of social equity funds (Gerding Edlen and Meyer Memorial) looking to acquire and preserve NOAH units ~ 80% to 120% MFI with minimal rehab cost • New construction faces challenging financial feasibility, institutional capital shift to acquisition (value add) strategy • Apartment registry, tenant protection laws, and rent control impact on investor valuation (Cap rate risk) • Mortgage and cap rate uncertainty in short and long run
wilkerson@econw.com