Maybe Don’t Move To Portland Just Yet
My friends, there’s trouble, right here in River City. According to a piece in Noise & Color: PDX that is itself ultraviolet with rage:
Residents of McCoy Village Apartments, units specifically reopened in 2012 to be affordable and backed with $1.5M in public money, had a brief scare that their housing was being given two months notice before rent increased 100% to the assessed market value. Within hours a photo of the increase made it’s way to the local media; everyone believed the mistake was true. Rents were going up everywhere, it didn’t seem unforeseeable that it could happen to subsidized housing as well.
It’s easy to get carried away when passions are high, and they should be. In a blog post that became so popular that, much like the mocked WWeek writer, its author was given a prime spot in Portland Mercury’s counter report, a local music critic wrote:
“The cost of living in Portland is a little like going to a funeral for a relative you never met: it’s not your fault and no one’s asking you to feel bad about it, but try to be sympathetic.”
The comparison to a funeral is spot on. We’re talking about the death of the American Dream for more than one group of people.
That might be a bit dramatic. What the author calls “the death of the American dream” is the dream of creative types “being able to make a living and raise a family or live close to major networks of opportunity.” That’s a fun and exciting dream, and it’s a dream I support, but I wouldn’t exactly call it the American dream.
It is, however, the dream that made Portland stand out on the national stage. That irony has not gone unnoticed.
Rents are rising right along with countless new apartment complexes.
“What we’re all trying to reconcile is if all these apartments are being built, why are rents still going through the roof,” he said.
Saltzman says many of the developers are from California and don’t know much about Portland, only that it has an attractive rate of return on apartments …
City data shows average Portland rents rose from $850 in 2008 to $1107 this year. The website Zillow puts the average rent much higher, at $1587. That’s up over 7 percent in a year, which is twice the national average.
For now, rent control is illegal in Oregon, although some activists are trying to get that changed.
A Noise & Color commenter points out that Portland’s problem is not merely that rent is going up, it’s that wages and salaries have remained flat. An essay in the LA Review of Books agrees, tracing the problem back to the Thatcher/Reagan revolution of the early 80s:
By reducing worker pay, Reagan and Thatcher made corporations more profitable. By ending inflation, they made owning bonds one of the great investments of our time. In 1982, the Dow Jones Industrial Average bottomed out at 776. Today it is over 18,000, a rise of more than 2,300 percent in 33 years. Interest rates have fallen from over 15 percent to barely above 0 percent. And house prices began their inexorable climb. By the 1980s, the average New York apartment rented for $1,700 a month (which is $3,700 in 2015 dollars).
Every economy has to answer two questions: how much to produce and how to distribute that production. Technological advances ensure that each year we can make more stuff with less labor and capital than the year before. This has not changed. What has changed is how we allocate the benefits of progress. Back in the day, workers got the money; today, owners of assets do. Stagnant wages and higher stock prices are two sides of the same coin.
Both Noise & Color and the LA Review of Books concur that government could do something to help and yet probably won’t.
If they wanted to drive down rents, government could fund the construction of public housing, as they did during the Golden Age. More quality housing would increase its stock, and with supply rising to meet demand, prices would fall. This would be great for young renters, bad for middle-aged property owners, bad for banks. Thus it is not likely to happen.
Well, if it’s any consolation, I hear it rains a lot in Portland, so you probably don’t want to live there anyway. Also, even passing through, you run the risk that your typewritten manuscript of confessional poetry about coming out while attending college in Oklahoma will get stolen out of your car.
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