A Prescription for Affordable Housing in Portland

CascadeNewLogoBy Everet Rummel

A new issue faces Portland. City Hall is considering waiving development fees for developers of market-rate housing in the Old Town Chinatown district. Chinatown is Portland’s oldest neighborhood and has earned an unpleasant reputation. City Hall claims that waiving these fees, which cover a project’s impact on urban infrastructure, can stimulate building in Chinatown. In the past, only developers of so-called “affordable housing” have been granted this waiver.

Critics argue that this is an expensive subsidy for big businesses which aren’t providing affordable housing. However, they assume that market-rate rent is permanent, no matter how much housing is built. This may not be true. As the supply of market-rate apartments increases in Chinatown, the market rate can be expected to decrease. Essentially, housing is made affordable by supplying more of it.

Waiving fees deprives certain city bureaus of funds; but perhaps these funds could be better spent, in this case, by private developers. If the City wishes to revitalize Chinatown, it needs to encourage more people to live there, and the best encouragement is lower rent. This can be accomplished by decreasing development fees and encouraging construction. More housing and lower rents could be good for Portland.

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Posted by at 05:00 | Posted in Housing, Portland | Tagged , , , , | 7 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Sally Forth

    Me rent is so high,
    It reaches the sky.
    Oh me, oh my!
    Vote for the guy,
    Who will supply,
    The dough I need to get by.

    Subsidized housing is the answer.
    How am I supposed to pay rent when the minimum wage isn’t even a living wage?
    This is ridiculous.
    I am thinking of crashing the border into Honduras.

    • guest

      Or go back to Oklahoma where your scorn flies as high as buzzards lookin’ for road kill pie.

  • rharris78

    Of course, as the neighborhood improves, demand goes up thereby….increasing rents. So, it could be that subsidizing market rate housing will increase rents as well and become a double windfall for the developer. Once when they get to forego development fees, then when their rents increase.

    System development fees should be based on the costs to the public. If actual fees are higher than public costs, they should be lowered for everyone. I’m a bit surprised that a libertarian organization would think that subsidizing private development and interfering with the workings of the market is a good idea.

  • IhateLiberals

    Bigger question is why should people that pay their own way for housing subsidize the housing of losers and the financially irresponsible?

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