Can We Build Enough Affordable Housing to End Homelessness in Portland?
If you’ve read the HHF newsletter over the years, you know for a variety of reasons why we are opposed to Housing First, the philosophical underpinning of most of our elected officials in Portland.1
That said, can Housing First solve our homeless problem? In other words, can enough affordable housing units be built to end homelessness? Before I answer that question, let me begin by explaining Housing First.
What is Housing First?
The Housing First philosophy is based on the belief that homeless people are victims of circumstances and inequality and simply need a helping hand to improve their lives.
Housing First advocates believe the government should provide free or substantially subsidized housing for homeless people in perpetuity, with no expectations of sobriety, work, or participation in rehabilitation programs. According to this view, treatment for addiction and mental illness should be strictly voluntary.
Mayor Wheeler’s Homeless Plan
In November of 2022 Portland Mayor Ted Wheeler, a Housing First advocate, proposed building 20,000 units of affordable housing over the next 10 years at an average cost of $490,000 per unit for a total cost of $9.8 billion.2
When I hear the price tag for building affordable housing, I wonder why it is so egregiously expensive? In comparison, the average sales price of a single-family home in the Portland metro area is $450,000.
I have been told there are four reasons why it costs so much to build affordable housing:”:
Land prices have soared inside the Urban Growth Boundary.
Building codes over the years have added unnecessary requirements.
Developers are constructing properties with unneeded amenities.
The Low-Income Housing Tax Credit (LIHTC) program is very expensive.
I could attempt to explain why each of these factors causes affordable housing to be so very expensive, but the bottom line is this: None of these reasons can be quickly corrected, so government directed affordable housing construction will continue to be very expensive going forward.
Instead, I want to focus on this question: Can we solve our homeless crisis by building affordable housing? And how long will that take?
Here are the facts:
There are 7,480 homeless people in the three counties that comprise the Portland metro area. 3
I contacted four Housing First advocates to ask if they thought Mayor Wheeler’s cost estimate of $490,000 per unit to build affordable housing was in the ballpark. None of them disputed his estimate. Here are a couple of quotes:
“The per unit cost you cite doesn’t seem high to me.”
“I don’t think that the mayor’s number is far off.”
I do not cite my sources of these two quotes as I’m sure they would not appreciate me using their words to write an article opposing Housing First.
Senate Bill 1537, proposed by Governor Kotek and passed by this Oregon legislative session, allocated $250 million towards constructing affordable housing.4
Those are the facts, but these facts do not address three very critically important assumptions:
Assumption #1 – No undercount of homeless people
The consensus of opinion is that it is virtually impossible to accurately count the homeless population. No matter how rigorous an attempt is made to find every homeless person, there will always be an undercount. The only question is how much? Twenty-five percent? Fifty percent? Nobody knows. For our purposes, I am assuming there is no undercount, which is highly unlikely.
Assumption #2 – All affordable housing units built are rented to homeless people.
Owners of affordable housing, in exchange for tax credits, agree to rent their units at an affordable rent that is usually below market.
If you were an owner of affordable housing, who would you choose to rent your apartments?
- The working poor that have low-paying jobs that are struggling to make a living?
or
- Those who are homeless, who are likely unemployed or severely underemployed?
To be honest, if it were me, I’d choose the working poor.
But for our purposes, we are going to assume that all of these units are rented to homeless individuals, which seems highly unlikely.
Assumption #3 – The Oregon State Legislature will approve $250 million annually for building affordable housing.
For our purposes, let’s assume that half of the money allocated to affordable housing is used in the Portland metro area with the balance allocated to the remaining counties of Oregon. Why half? Because the Portland metro area has about half of the state’s population.
And most importantly, the Oregon State Legislature will for the foreseeable future approve $250 million annually for affordable housing.
With these optimistic assumptions, how long will it take to house all homeless people? Let’s do the math.
Calculations:
$250 million for housing x 50% allocated to Portland metro ÷ $490,000 per housing unit = 255 housing units per year
7,480 homeless people ÷ 255 units per year = 29 years to house the current homeless population
Using the most optimistic of assumptions, it would take about twenty-nine years to house our current homeless population.
Housing First advocates could argue that there are other sources of money besides that provided by the Oregon State Legislature for the purpose of building affordable housing. And they would be correct. Unfortunately, there is no way to come up with an estimate of the potential amount of money coming from these other sources, i.e., future Metro bond measures, the federal government, etc.
Even so, these other potential sources for affordable housing would likely only make a small dent in the number of years needed to build enough affordable housing to house our current homeless population.
Summary
To answer the question, can we build enough affordable housing to end homelessness in the Portland metro area, the answer, in my opinion, would be no. Certainly not within the next decade.
Those are my thoughts. I welcome yours. Can building affordable housing solve our homeless crisis?
Footnotes
1 Multnomah County’s groundbreaking plan for supportive housing clears key hurdle; https://www.multco.us/multnomah-county/news/multnomah-county%E2%80%99s-groundbreaking-plan-supportive-housing-clears-key-hurdle, February 22, 2021
2 Establish key actions to increase affordable housing construction, Portland.gov, https://www.portland.gov/council/documents/resolution/adopted/37593
3 2023 Point in Time Count, https://www.huduser.gov/portal/datasets/ahar/2023-ahar-part-1-pit-estimates-of-homelessness-in-the-us.html
4 Portland Tribune, Lawmaker’s advance Kotek’s housing and homeless aid proposals, Feb. 13, 2024
