National Affordable Housing Crisis

Sunday, January 24, 2016 11:28 AM | Anonymous

The news making headlines across Oregon and around the nation is that there are not enough available rental units. The solution proposed by tenant's rights groups and some legislators is to eliminate no cause evictions and limit rent increases. ORHA is committed to encouraging builders, contractors, developers, and state and local programs to help address the lack of affordable housing.

What is the solution, and how can we help? First, we need to identify the issue. Solving the affordable housing crisis won’t be done by forcing an artificial rent cap or even by slowing down rent increases. Housing costs are driven by the same issues that all other commodities are driven by, namely the market, the costs of labor and materials. If there is less of anything, prices will naturally and automatically go up. It’s just plain ignorance of the law of supply and demand to suggest that suppressing rental prices will magically solve the problem of a lack of housing units. Anyone who says that rental prices are why people can’t find a home isn’t listening to themselves talk. If there are ten people looking for a home and there are only five homes available in the area, logically there will be five people who can’t find a home; the price of the home isn’t the issue. Every study that looks at this housing “crisis” notes that the vacancy rate is extremely low everywhere in Oregon. If the rental price was the issue, then our vacancy rates would be high, not at all-time lows.

Second, we need to promote a faster permitting process, tax deferment programs, tax waiver programs, lower bank loan rates and loan incentives; and city and county grants to encourage builders to develop more affordable housing.

Third, Housing Authorities are working with reduced funding, while at the same time serving a dramatically increased client base. Local housing authorities need more funding now, and their clients need longer time frames to be allowed to look for housing. Rental dollar limits need to be adjusted for today’s market not based on the rates from three years ago.

Most importantly, the public needs to be educated as to what “affordable housing” means. Most would describe affordable housing as basic housing with no upgrades. These units are built at a lower cost, so that they can be rented at lower rates. They are built specifically for a population that must pay considerably less than the market rate. The usual target for this type of housing are the disadvantaged, the elderly and the disabled. Residents often have some kind of rental assistance.

Many Oregon cities are currently working on programs, grants and incentives to encourage building more affordable housing. We need to focus on the problem of growing a larger inventory of rental units, and not get sidetracked by the notion that rent control or rental rate “management” will solve the problem. Cities and counties have complete license to lower the costs of development, and to streamline the permitting process which is a huge issue with new construction.

ORHA has been committed to working with local Housing Authorities for over 20 years and many of our local associations have employees of Housing Authorities on their Board of Directors. Together, we are committed to encouraging rental owners to work with lower income tenants. Oregon’s many Housing Authorities will agree that their main impediments to serving more clients are a lack of funding and a low vacancy rate.

Understanding how we got to this crisis mode would assist our legislators’ to better address the real problem. The 2008 economic downturn caused many people to lose their homes and they became renters. We also have thousands of college graduates who in the past were starter home buyers that are now renters because of the sluggish job market and high student loan debt. This issue isn’t the fault of greedy property owners who during the downturn; were forced to accept rents far below the level of making any kind of profit. This is a systemic problem that will take honest and creative participation of many segments of our society.

We need more rental units, not rent control by any name!


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