The Rent Cap: Too Little, Too Late?
The recent State cap on rent at 7% plus inflation which could be 2%, may be too little, too late.
I hope not.
— Research estimated that a 10.0 percent increase in rent leads to a 13.6 percent increase in the rate of homelessness.
— High rents are to blame for the severity of the state’s homelessness crisis.
— Housing affordability (rather than personal circumstances) is the key to predicting the relative severity of homelessness across the United States.
(Homelessness in Oregon, March 2019)
And, another indicator of what may come:
Over 48% of Portlanders are rent challenged i.e. rent accounts for over 30% plus of their income with 40 to 50% not uncommon.
A 7%+ or approximately 9% rent increase may result in a significant increase in households being cost burdened, even homeless.
Too little, too late?
The rent in my Section 42* (affordable housing) apartment will increase from $781 to $855 next month. That's a 9% increase for most of us in this building thanks to HUD"s feeling that the landlords of Section 42 housing have been treated unfairly over the last few years when rent increases have been too low, so they are addressing this "problem."
What's relevant to this 9% increase that connects to the housing crisis and homelessness?
Our building is a study in cost burdened renters. How many will end up homeless if not now later? And, they may be homeless AND working or on a fixed income such as social security.
So, what portion of your income (take home) is spent on rent?
What is your estimated Area Medium Income? The City of Portland provides a calculator here.
Are you working full time and qualify for affordable housing? Not me you say? Don't be too surprised. The income gap grows.
As reported by the Oregon Center for Public Policy (OCPP)
"Oregon’s ultra-rich — the highest-earning one out of every 1,000 Oregonians — have never been so rich compared to the rest of Oregonians."
And you feel this gap even if you are middle income and looking for "market rate" housing you can afford.
The income gap separating those Oregonians in the middle of the income ladder and those at the very top has never been wider. In 1980, it took 26 typical (median income) Oregonians to equal the average income of the highest-earning 1 in 1,000 taxpayers. By 2016, this had grown to 127 typical Oregonians. That is nearly a five-fold increase" according to the OCPP.
How many homeless folks and cost burdened renters will it take to put all real estate practices under scrutiny and significantly change those that are contributing to the rent (housing) crisis?
And it's not about me or you, but us.
Related Posts:
Subsidies (housing) of the Affluent
Ruth Ann Barrett, March 29th, 2019, Portland's Caring Community, Old Town Chinatown, Portland, Oregon.
*
Section 42 refers to that section of the Internal Revenue Tax Code which provides tax credits to investors who build affordable housing for folks with fixed or lower income. Section 8 is different. Section 42 there are eligibility requirements based on income while in Section 8 properties the rent is 30% of their income.
** In my apartment building there are approximately 139 Section 42 housing units at 60% MFI and 17 Section 8 units. There is a 9% increase in rent this Spring thanks to HUD and their concern for landlors. The increase affects both Section 42 and Section 8, but in terms of Section 8, the Federal government covers the gap.
based on whatever 30% of the tenant's income is and whatever is left is funded by the federal government.