This past week, I made my annual visit to the Pacific Northwest and to Portland, Ore. I usually will drive by and look at the two houses that I lived in while growing up. This year, I was shocked to learn that I couldn't afford to live in Portland any more. The first house that I lived in which was just a simple farm house located next to a school, was recently sold for over $387,000 dollars (Zillow).The other house that I lived in until I graduated from the university, which has four small bedrooms and a bath and a half, sold the last time for $400,000 dollars! (Zillow)
Right now, there is also the growing crisis of homelessness in Portland. Not far from the Moda Center at the over-pass crossing I-5 at Martin Luther King Boulevard, I counted no less than twenty pop-up tents housing people. I had breakfast with an old friend in downtown Portland in Old Town, and there were literally homeless people sleeping out on the street corners and against buildings, including the swanky Nines Hotel that is located in the Old Meier and Frank Building. (See previous blog "Endings And Beginnings".)
One might wonder why is there all of this displacement of people who are not getting housing? The recession of 2008 certainly caused a lot of pain and heartbreak for people who were caught in sub-prime loans, who didn't understand the terms of the loans and who consequently lost their homes. Many people now are continuing to work two jobs in order to have a stable lifestyle. Wages for jobs have not continued to rise but rather have leveled off. An article in the Economist observes:
America's unemployment rate is 5.5 percent. By historical standards, that is low. It is also falling rapidly: unemployment is down more than a percentage point from a year ago. Economic theory suggests that in such circumstances, workers should begin to enjoy healthier pay rises. Low unemployment means that employers have to try harder to find new workers, while existing workers can threaten to move elsewhere. As a result, workers should be able to demand higher wages. Yet firms in America seem not to have got the message. Inflation-adjusted wages for typical workers are stagnant. In fact, they have barely grown in the past five years; average hourly earnings rose 2 percent year-on-year in February of 2015: about the same as in February of 2010.
So now we have a lot of people who can't afford to buy houses, let alone renting apartments. Now, there is a growing trend where people are renting rooms in people's houses, rent averaging $700 per month., at least in the Portland, Or Vancouver, Wa area.
During the 1930s following the Great Depression and market crash of 1929, it wasn't unusual to find several people living together in a house -- this being the boarding house. Renters would occupy rooms and they would share meals together in a common dining area.
A recent article in The Atlantic noted regarding Portland:
Now, housing prices are skyrocketing in this city of 600,000, as more people move in and new high-rises and apartment complexes go up. Apartment rents are rising at an annualized rate of 14 percent, one of the largest increases in the country. More than half of the city's tenants spend more than 30 percent of their income on rent. News stories abound of whole buildings raising their rent by 20 percent or by $500, or more. Evictions have skyrocketed as landlords make room for new residents with bigger salaries.
It's all the newcomers, some say. They're driving prices up and they're pushing long-time residents out. They're why Portland was determined by Governing magazine to be the place in the country with the most gentrification over the last decade.
The cycle continues, there will be more scarce available housing and greater number of homelessness coupled with greater need for mental health care and employment opportunities. We will probably witness more minimum wage workers who will be living in their cars. We are witnessing the new boarding house society. How long this trend will continue is a mystery. Predictably, a correction in the Portland real estate market will occur. When this happens, we can only pray that there will not be a massive dislocation of people who will require shelter. Maybe the local churches and denominations can support and advocate for more aggressive interventions for affordable housing in Portland and in other communities. We are seeing signs of hope for this to occur through the Multnomah County Coalition For Affordable Housing which has a lot of involvement from local faith communities in Portland.
May it be so.