It is not clear whether rental rates in Vancouver exceed those in Portland.
Allan Brettman, The Columbian’s Business Editor, recently looked into that possibility and reported: “After spending a couple of days last week talking to housing industry officials and economists, the answer to the question of whether Vancouver rentals are more expensive than those in Portland rates as a solid maybe.”
The curiosity followed a report from the Apartment List claiming that rates are higher on this side of the Columbia River — an assertion that flies in the face of conventional wisdom. The fact that there is no conclusive answer lends intrigue, but in the long run it doesn’t change anything. Those in search of housing only know that it is expensive, regardless of whether you are looking in Vancouver or in Portland. As Brettman also writes: “It’s more certain that a shortage of affordable rental units persists.”
You don’t need to be a real estate expert to know that is the case. And you don’t need to be a social scientist to understand that it is contributing to high rates of homelessness throughout the metro area.
That connection was enumerated late last year by researchers from the University of New Hampshire, Boston University and the University of Pennsylvania. In a study sponsored by real estate website Zillow, they found that “communities where people spend more than 32 percent of their income on rent can expect a more rapid increase in homelessness.”
Again, that comes as no surprise; financial planners long have urged people to spend no more than 30 percent of income on housing. But the survey, combined with other research, lends some empirical weight to that recommendation. It found an uptick in homelessness when the percentage of income spent on housing rises above 22 percent, and a sharp increase when that percentage reaches 32 percent.
In big cities such as New York and Seattle, rent increases have outpaced incomes, contributing to “an affordability crunch with cascading effects.” Vox.com summarizes: “The study found that rents in these cities are so high that people of all income levels, including those with higher-than-average salaries, are competing for a small number of affordable apartments. Everyone struggles when rents rise.”
This is Economics 101 and not particularly revelatory. But it is interesting to ponder why the same effect is being seen in Vancouver, a midsized city that is not a regional economic hub.
The answer, in part, lies in the proximity to Portland. It also lies in the fact that this is a desirable area to live and that land-use restrictions often limit the construction of housing units.
Vancouver is trying to actively temper those influences through its Affordable Housing Fund — a voter approved property-tax levy that will raise $42 million over seven years. The fund thus far has contributed $7 million toward 12 housing projects totaling 394 units, and has also been put toward housing assistance and other programs.
Studies have found that there is no single formula for determining a region’s risk for homelessness — or for reducing that risk. Skylar Olsen, Zillow’s director of economic research, said, “success in tackling homelessness in one community doesn’t necessarily have the same effect in another.”
But it is safe to say that rent costs in Vancouver have contributed to a problem that affects everybody in our community. That is true regardless of whether or not those costs are higher than in Portland.
