Lance Dutson: Housing has become one of the biggest issues in cities across the state. And Portland Mayor Ethan Strimling–who I think otherwise has been pretty good, for a Democrat–is showing us exactly what NOT to do. He’s proposing a raft of rules and regulations on landlords that shows a complete lack of understanding of the economic concepts of supply and demand. Rents are too high and housing is unavailable for one reason: there isn’t enough of it. Portland is a very liberal city, but they need to go back and read their Milton Friedman.
Steven Biel: Portland has seen a 40 percent increase in average rents while the wages of renters have declined. But it’s not just supply and demand. There are 34,000 units of housing in the city and 66,000 people. That’s less than two people per unit. The problem is a housing mismatch with a shortage of housing for working people earning $30,000 a year or less and a flood of high-end condos for rich newcomers. Do you really believe the free market is going to solve this problem all on its own?
Lance: No, that’s a straw man argument. The city has a role in protecting folks who have been displaced, but they need to look at the long game as well. Without accepting that scarcity is the root of the housing problem, it will never be fixed.
Steven: Anyone who’s visited Portland lately knows that there’s a construction boom underway. Mayor Strimling is simply proposing some ground rules to stop the middle class from getting squeezed out of the city. For instance, his plan would require 90 days notice for a no-cause eviction or rent increase. You’re telling me landlords can’t live with that?
Lance: It’s perfectly fine to have a framework for evictions and rent increases to provide stability for tenants. But the real solution is to create an easy path for development of additional housing. When there are more potential tenants than housing units, landlords will charge more. No social program in the world will change that dynamic.
Steven: Yes, part of the solution is to increase housing, especially in walkable neighborhoods near transit. But there’s a short-term eviction crisis happening. Think about it–the mayor wants to limit landlords from evicting no more than 40 percent of their tenants in a single year, and the landlords are freaking out. If they can’t even wait a year or two to dump all their families on the street, then you know things are out of control.
Lance: This is what drives me crazy. I know that it makes you feel good to set this kind of limitation, but it totally ignores the motivation of the landlords. This is business, not some Dickensian horror show. Landlords WANT tenants. Evictions are hard and costly. Blaming landlords is a cheap political ploy to appeal to people who have no grasp of economics.
Steven: Of course it’s business, and if you can make more money by kicking out your middle class tenants and replacing them with wealthy newcomers from New York or D.C., then that’s what you’ll do. Really what’s needed is some kind of rent stabilization to limit how fast rents can go up. But even Ethan’s supposedly far-out lefty proposal doesn’t do that.
Lance: This debate is a perfect example of progressive economic illiteracy. If there are wealthy people willing to pay more for housing than current tenants, it means there isn’t enough housing. The solution is not to bolster this scarcity through regulation. And right now the anti-development, anti-landlord environment in Portland is restricting the development of more supply.
Steven: Renters in the city would be shocked to learn that there’s an anti-landlord environment. Right now, landlords can do almost whatever they want, and after a year of discussion, the city council’s weak-kneed Housing Committee is literally offering renters nothing more than a brochure listing their flimsy legal rights. Ethan’s fighting the good fight, but he can’t do anything if the rest of the council doesn’t get their act together.
Lance: Then my advice would be to start focusing on the symptoms, not the problem. We need to elevate the discussion to something productive instead of just playing to the easy “screw the man” sentiment framing the discussion now.
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