THE OBSERVATORY PORTLAND PRO

It shows the surge in new apartments in 2017 largely holding up in 20, but then plummeting by roughly two-thirds in 2020, from an average of 4,500 new apartments per year to fewer than 1,500. Data compiled by local economic consulting firm ECONorthwest tracks the number of apartment permits issued in Portland over the past 15 years.

Coyote has looked down, and seen nothing holding him up. And, as weвЂ™ve noted, the increase in supply pushed up vacancy rates, and rent increases, which had been in the double digit range in 2015, fell to just 1-2 percent per year, according to Apartment LIst data.Д«ut now, Wile E. The momentum from pre-IZ housing applications filled the construction pipeline, and led to a steady increase in the number of new apartment completions. Coyote momentД«ack in 2019, we said that PortlandвЂ™s apartment market was in the midst of the вЂњdonвЂ™t look downвЂќ portion of its Wile E. The threat of tougher future requirements prompted a whole lot of investment to happen much earlier than it otherwise would have, and new developments, added to those already under construction, have helped deliver a lot more new apartments in Portland. the first two years of inclusionary zoning in Portland have been a game-theory win-win for housing affordability. That effect has concealed the negative consequences of PortlandвЂ™s inclusionary zoning policy.ДЄs we observed in May of 2019, the initial implementation of inclusionary zoning resulted in a kind of counter-intuitive acceleration of apartment construction. The reverse is also true a glut of building in good times produces new apartment supply that holds down rents, at least for a while. When there are housing shortages, as there were in the early days of the recovery from the Great Recession, supply canвЂ™t expand as rapidly as demand, and rents get bid up. As a result, thereвЂ™s a multi-year pipeline. It takes time to plan, obtain permission for, and actually build new housing, and multi-family housing takes longer than single family housing. Investment markets work with lags for a variety of reasons. That produced a temporary flood of new apartment buildings, that have, over the past four years, mostly been built. The new requirement didnвЂ™t kick in until February 2017, and there was a land rush of developers who filed under the old rules.

THE OBSERVATORY PORTLAND PRO

Unlike other cities that either made compliance voluntary, or largely (or entirely) offset the cost of the added units with density bonuses or subsidies (or other quid pro quo), the Portland ordinance applied to nearly all apartment buildings larger than 20 units. Henceforth, all new apartment buildings in Portland would have to set-aside a portion of their units for low- and moderate income housing. In December 2016, PortlandвЂ™s City Council enacted a strong inclusionary housing requirement. Inclusionary Zoning (IZ) creates perverse incentives to under-utilize available land This will lead to slower housing supply growth and increasing rents for everyone over the next two to three years PortlandвЂ™s inclusionary zoning requirement is a slow-motion train-wreck apartment completions are down by two-thirds, and the development pipeline is drying up

The observatory portland