Fall 2013 Market Overviewmedia.oregonlive.com/portland_impact/other/Fall 2013 Market Overvi… ·...

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Fall 2013 Housing Market Update

In Portland between the years of 2007 and 2012, gross rents have steadily increased by 3‐5%

each year after dipping slightly in 2010 as the recession took hold. Median renter income has

shown more volatility, bottoming out in mid‐2010 and gradually increasing in 2012. The

Portland housing market is in recovery from the recession, however, research indicates that

benefits from a recovery reach people experiencing poverty and communities of color more

slowly.

A common measure of supply and demand in rental housing is expressed as rent burden, or the

percentage of a household’s income they spend on rent and utilities. In recent years, the

number of cost‐burdened households in Portland has reached historic highs. According to

estimates from the American Community Survey, the number of renters paying more than 30

percent of income for housing (the traditional measure of affordability) reached a high in

Portland in 2011. Excessive housing costs strained the budget of more than 54% of all renters,

or nearly 64,700 households. 2012 showed a slight decline in the number of cost burdened

renters but the overall share of burdened renters remained high at 52%. Figure 1 from the

Harvard Joint Center for Housing Studies report “America’s Rental Housing Evolving Market and

Needs” shows that large shares of renters across the county are cost burdened.

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The widespread incidence of renter housing cost burden reflects the gap between what lower‐

income households can afford to pay in rent and what housing costs to build and operate in

Portland. Each year, the National Low Income Housing Coalition (NLIHC) compares the rent for

a modest two‐bedroom home in state in 2013 to the hourly wage that full‐time workers would

have to earn to afford that home. In Portland, the wage is just over $17 an hour – 191% of the

minimum wage.

Cities such as San Francisco, Sacramento and Seattle show a similar pattern of rent burdened

residents. In 2012, San Francisco’s share of rent burdened households was 47%, Sacramento

57%, and Seattle 45%. However, a lower percentage of rent burden in some markets may

indicate renters have left the market.

Homeownership faces a similar paradigm. A median‐income household can afford a median‐

priced home in only eight of 25 of the largest cities around the U.S., according to a new report

by Interest.com, a part of personal finance site Bankrate. Last year, 14 of these cities had more

affordable housing markets.

The Metro regional government is responsible for forecasting the amount of growth the metropolitan area will experience. Metro uses computer models to calculate a wealth of detailed projections of what the region’s population and demographics will be in the future. Regarding housing needs in the City of Portland (and stated in the broadest of terms), Metro’s models tell us that the number of households in the Metro region and the City of Portland will grow. There will be adequate supply of housing for the additional residents. The highest level of demand will be for multi‐family residences. The Portland State University Center For Real Estate indicates in its Winter 2013 Quarterly Report that through November 2012, multifamily building permits have increased within the City of Portland. Permits have been issued for 1,612 multifamily units built in the City, which is already the highest total since 2008. In 2012, there were 21 new apartment projects with 2,619 units slated to open. There are approximately 2,924 market rate apartment units in 26 different complexes that are currently leasing up or under construction now and into 2013. The majority of projects are in the suburban west side and close‐in eastside markets. These are the areas that have market rents that can support the high costs and risks associated with new construction. Half of the units being built in Portland are in the close‐in areas where vacancy is lowest. High demand for rentals is expected to persist over the next several years. New construction has begun to ramp up as more projects are approved in the coming year. The Fall 2013 Multifamily NW Apartment reports states that in the Portland/Vancouver area 22,000 units are in the new construction pipeline, and concerns over absorption and vacancy rates are being discussed. The following maps illustrate housing affordability for Portland households at different affordability levels using the Fall 2013 Apartment Report.

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Nove m be r 18th , 2013

Housing Afford ability for a O ne -Pe rson House h old at 30% Me d ian Fam ily Incom e (MFI)*

0 2 41Mile sN

*A one -pe rson h ouse h old at 30% MFI m ake s $7/h r or $14,600/yr.1. Re nt afford ability is se t at 30% of th e MFI;2. Afford able Housing pric e is base d on th efollow ing assum ptions:• 30-Ye ar Loan;• 4.5% Fixe d Incom e Rate ;• Month ly d e bt e xpe nse rang ing from $200 - $500;• 3.5% Dow n paym e nt.

City of Portland | O re g onPortland Housing Bure au

Re nt Stud ioBuy Stud io


Re nt O ne Be d -O ne BathBuy O ne Be d -O ne Bath

Re nt Tw o Be d -O ne BathBuy Tw o Be d -O ne Bath

Re nt Tw o Be d -O ne BathBuy Th re e Be d -Tw o Bath

Affordable Unit Type By Tenure for One-Person HH @ 30% MFI





The information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.

Data Sources:1. HUD Income Limits 20132. The Apartment Report, Fall 2013, Vol. 19,Multifamily NW3. RMLS 2012 as analyzed in the Portland Monthly,April. 2013

LegendCannot afford to rent or buy Can afford to rent, not buyCan afford to rent or buyCity Boundary

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Housing Afford ability for a O ne -Pe rson House h old at 60% Me d ian Fam ily Incom e (MFI)**A one -pe rson h ouse h old at 60% MFI m ake s $14/h r or $29,150/yr.

1. Re nt afford ability is se t at 30% of th e MFI;2. Afford able Housing pric e is base d on th efollow ing assum ptions:• 30-Ye ar Loan;• 4.5% Fixe d Incom e Rate ;• Month ly d e bt e xpe nse rang ing from $200 - $500;• 3.5% Dow n paym e nt.



Re nt O ne Be d -O ne BathBuy O ne Be d -O ne Bath

Re nt Tw o Be d -O ne BathBuy Tw o Be d -O ne Bath

Re nt Tw o Be d -O ne BathBuy Th re e Be d -Tw o Bath







0 2 41Mile sNCity of Portland | O re g on

Portland Housing Bure auThe information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.



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Housing Afford ability for a One -P e rson House h old at 80% Me d ian Fam ily Incom e (MFI)**A one -pe rson h ouse h old at 80% MFI m ak e s $19/h r. or $38,850/yr.

1. Re nt afford ability is se t at 30% of th e MFI;2. Afford able Housing price is base d on th efollow ing assum ptions:• 30-Ye ar Loan;• 4.5% Fixe d Incom e Rate ;• Month ly d e bt e xpe nse ranging from $200 - $500;• 3.5% Dow n paym e nt.



Re nt One Be d -One BathBuy One Be d -One Bath

Re nt Tw o Be d -One BathBuy Tw o Be d -One Bath

Re nt Tw o Be d -One BathBuy Th re e Be d -Tw o Bath







0 2 41Mile sNCity of P ortland | Ore gon

P ortland Housing Bure auThe information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.



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1. Re nt afford ability is se t at 30% of th e MFI;2. Afford able Housing price is base d on th efollowing assum ptions:• 30-Ye ar Loan;• 4.5% Fixe d Incom e Rate ;• Month ly d e bt e xpe nse ranging from $200 - $500;• 3.5% Down paym e nt.




Re nt Two Be d -One BathBuy Two Be d -One Bath

Re nt Two Be d -One BathBuy Th re e Be d -Two Bath











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Re nt Tw o Be d -One BathBuy Tw o Be d -One Bath

Re nt Tw o Be d -One BathBuy Th re e Be d -Tw o Bath











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Housin g Affordability for a Four-Person Househ old at 30% Median Fam ily In com e (MFI)**A four-person h ouseh old at 30% MFI m akes $10/h r. or $20,800/yr.

1. R en t affordability is set at 30% of th e MFI;2. Affordable Housin g price is based on th efollowin g assum ption s:• 30-Year Loan ;• 4.5% Fixed In com e R ate;• Mon th ly debt expen se ran g in g from $200 - $500;• 3.5% Down paym en t.

Rent One Bed-One BathBuy One Bed-One Bath


Rent One Bed-One BathBuy Two Bed-One Bath

Rent Two Bed-One BathBuy Two Bed-Two Bath

Rent Two Bed-One BathBuy Three Bed-Two Bath

Affordable Unit Type By Tenure for Four-Person HH @ 120% MFI





Novem ber 18th , 2013

0 2 41MilesNCity of Portlan d | Oreg on

Portlan d Housin g BureauThe information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.



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Housing Affordability for a Four-P erson Househ old at 60% Median Fam ily Incom e (MFI)**A four-person h ouseh old at 60% MFI m akes $20/h r. or $41,625/yr.

1. Rent affordability is set at 30% of th e MFI;2. Affordable Housing price is based on th efollowing assum ptions:• 30-Year Loan;• 4.5% Fixed Incom e Rate;• Month ly debt expense ranging from $200 - $500;• 3.5% Down paym ent.












0 2 41MilesNCity of P ortland | Oreg on

P ortland Housing BureauThe information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.



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Housing Affordability for a Four-P erson Househ old at 80% Median Fam ily Incom e (MFI)**A four-person h ouseh old at 80% MFI m akes $27/h r. or $55,500/yr.

1. Rent affordability is set at 30% of th e MFI;2. Affordable Housing price is based on th efollow ing assum ptions:• 30-Year Loan;• 4.5% Fixed Incom e Rate;• Month ly debt expense ranging from $200 - $500;• 3.5% Dow n paym ent.












0 2 41MilesNCity of P ortland | Oreg on

P ortland Housing BureauThe information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.


LegendCity BoundaryCannot afford to rent or buy Can afford to rent, not buyCan afford to rent or buy

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Housing Afford ability for a Four-Pe rson House h old at 100% Me d ian Fam ily Incom e (MFI)**A four-pe rson h ouse h old at 100% MFI m ak e s $33/h r. or $69,375/yr.












N ove m be r 18th , 2013

0 2 41Mile sNCity of Portland | Ore gon

Portland Housing Bure auThe information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.



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Housin g Affordability for a Four-Person Househ old at 120% Median Fam ily In com e (MFI)**A four-person h ouseh old at 120% MFI m akes $40/h r. or $83,250/yr.

1. R en t affordability is set at 30% of th e MFI;2. Affordable Housin g price is based on th efollowin g assum ption s:• 30-Year Loan ;• 4.5% Fixed In com e R ate;• Mon th ly debt expen se ran g in g from $200 - $500;• 3.5% Down paym en t.












0 2 41MilesNCity of Portlan d | Oreg on

Portlan d Housin g BureauThe information on this map was derived from City of Portland GIS databases. Care was taken in the creation of this mapbut it is provided "as is". The City of Portland cannot accept any responsibility for error, omissions or positional accuracy.



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