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The Velmor on NE 7th Avenue
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The accusations ring out in bars. The gripes spill onto Internet comment threads. And the complaints echo like angry yodels down the newly built canyons of Southeast Division Street and North Williams Avenue.
The backlash against Portland's apartment boom runs deep, if not silent. And the myths people voice are as predictable as sneering hatred of Californians.
The case goes like this:
- Fancy new apartments are making the city more expensive.
- Renters are being kicked out of cheap houses so greedy developers can smash them and build grotesquely oversized homes.
- We need rent control to quell the skyrocketing prices.
- We could keep working-class people in the city by forcing developers to build affordable housing.
- The heart of the argument is Portland would be less expensive--and better--if neighborhoods stopped changing.
It's likely you believe a few-maybe all-of these things. Here's why you're wrong.
Myth 1: New apartments are raising the cost of rent.
Apartments don't raise rents. People do. And like Buddhism warned us, they do it the same way that people ruin everything: with desire.
When you curse an apartment building like Burnside 26 for charging $1,336 a month for a studio, you're confusing cause and effect: thinking the developers caused a pricey apartment building by constructing it.
That's so wrong that when we called local economists to ask them about it, three of them laughed at us.
"Force them to remember the economics class they slept through freshman year," says Portland economist Joe Cortright.
Pencils down: What causes the price of anything to go up isn't a new supply, but the strength of demand for a product that's in short supply. Long before developers broke ground on Burnside 26, Portland apartments became extremely hard to find.
Portland housing has been hot for a while. By 2011, this city's rental market was the tightest in the nation.
Last year, the number of apartments available for rent at any given time hit a record low of 2.8 percent, says real-estate brokerage Marcus & Millichap.
With so few units available, tenants have no leverage-landlords can charge more.
"It's like musical chairs," Cortright says. "If you don't add more chairs to the game, people get squeezed out of the game."
If it makes you feel better, you can still blame greedy developers for this shortage. That's because for most of the past decade, developers weren't building apartments--they were building condos, and taking rental units off the market and selling them as condos.
When the mortgage bubble burst in 2008, people wanted apartments again. So did the newcomers flooding to a city hyped by every publication from The New York Times to Kinfolk magazine. But Portland didn't have many apartments left, and nobody built any new ones during the recession. Developers have finally started adding new apartments-increasing construction from 518 rental units in 2011 to 4,413 in 2014. But the population continues to grow, and Portland added 30,500 jobs last year, nearing a 15-year high. So the supply of new apartments still hasn't caught up to the demand of people who want them. (See chart above.) Until the supply of new apartments jumps way ahead of demand, rents will keep rising. Read the entire article in the Willamette Week ...
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Source: "The 5 Myths About Portland Apartments," by Aaron Mesh, June 10, 2015, Willamette Week. | 
