The Oregonian
PORTLAND, Ore. — Virtually all of the 47,500-plus housing units added since the recession in the four-county Portland area are rentals rather than owner-occupied homes, according to new numbers released by the U.S. Census Bureau.
The trend is consistent across Multnomah, Washington, Clackamas and Clark counties: While the number of apartments or rental homes has surged over the last five years, the number of new homeowners has barely budged. The result is a decline in the regional homeownership rate overall, from 63 percent to 60.
“Well, no wonder it’s so hard to find houses to sell,” said Leslie Jones, principal broker with Re/Max Equity Group. “Our inventory is so low because so many things are being held as rentals instead.”
The data made public late Wednesday reflects the latest statistics from the American Community Survey and allows for the first-ever snapshot comparing the five-year periods between 2005 to 2009 and 2010 to 2014.
Predictably, Multnomah County had the highest number of new rental units. There were an average of 125,330 renter-occupied units in the county each year between 2005 and 2009, the survey found. And there were nearly 143,000 rentals each year between 2010 and 2014 – an increase of 14 percent. Rental units in Washington and Clackamas counties increased at similar rates.
Meanwhile, the increase in owner-occupied units in Multnomah County between the two time periods totaled fewer than 900, or less than 1 percent.
“This is a pretty expected change,” said University of Oregon economist Tim Duy. He cited tighter mortgage lending standards for would-be buyers and an influx of younger residents who make less money, don’t tend to have large families and are more likely to prefer urban areas to suburban ones.
Duy added that the housing bubble of the middle of the last decade and its lax lending standards probably caused the local homeownership rate to inflate at an unnatural rate in the first Census survey.
“Clearly, the heightened (pre-recession) interest in housing as an investment, combined with weaker underwriting conditions, certainly did contribute to more owner-occupied housing than you really would expect,” Duy said.
In Portland, there were a handful of neighborhoods where the homeownership rate actually increased, according to census tract-level data. These areas included the Reed and northern Woodstock neighborhoods in Southeast Portland and the triangular area in Northeast Portland between Sandy, Cully and Columbia boulevards and 57th Avenue.
Washington County saw the biggest gains in new homeowners. There were more than 2,700 additional owner-occupied homes in the county between 2010 and 2014 than there were between 2005 and 2009, the survey found — a 2.3 percent uptick.
Even Washington County, though, gained far more rental units — more than 9,700, the survey found. That’s because of neighborhoods like Orenco Station and Tanasbourne in Hillsboro, said Ted Reid, principal regional planner at the Metro regional government. In Clackamas County, Wilsonville has been a hotspot for new rental units, he added.
“Our plans did anticipate this,” Reid said. But “these always come and go in cycles, historically.”
The trend probably owes something to the economic hangover after the recession, also. Credit dried up and single-family builders all but halted construction. But people never stopped arriving in Oregon.
Meanwhile, the real median household income from 2010 to 2014 dropped in all four counties compared to the previous five-year snapshot, weakening the market for single-family homes and strengthening the demand for rentals.
Now, apartment buildings are springing up across the metro area, and single-family construction has returned, too, though not at the same clip.
“It’s just at this point playing catch-up,” Reid said. “So there’s some pent-up demand for housing that we’re seeing now, so we would expect that at some point prices are going to stabilize as more homes get built.”
Clark County, Washington, was at the extreme end of the trend. There were more than 9,000 additional rental units north of the Columbia River between 2010 and 2014 than there were in the previous five-year period — nearly a 20 percent increase — but fewer than 100 additional owner-occupied homes.
Duy expects interest in owner-occupied housing will return — if it ever went away.
“There is still a large demand for owner-occupied housing, and we certainly see that in the… numbers,” Duy said.
Reid, the regional planner at Metro, agreed. The current trends, he said, “won’t last forever.”
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