Wednesday, April 16, 2014
Randy Billings has a story today about a small boom of housing units being planned or built on small infill lots in Portland's East End. A quote from the story:
“There are a lot people who would like to live on Munjoy Hill, for example, but they don’t want to live in the type of housing that exists right now,” said Jeff Levine, the city’s director of planning and urban development.
Neighborhood residents have mixed feelings: they welcome new investment and vitality as housing replaces vacant lots, but they're also wary of rising rents. "We want to keep the balance where people feel it’s a comfortable and affordable place to live and not overrun with high-end, impossible-to-afford places,” said Andrea Myhaver, president of the Munjoy Hill Neighborhood Organization.
The typical metric for home "affordability" is one-third of a household's income. In Portland, the median household income is $45,153, or $3,763 a month, which means that the median household can afford $1,254 a month (that's $3,763 divided by 3) in rent or mortgage payments.
One development under construction, the 86-unit "Bay House" near India Street (on the site of the former Village Cafe parking lot) is advertising 2-bedroom condos starting at $380,000. A household paying a 10% down payment on a mortgage there would end up paying $2,380 a month — roughly twice what a median household could afford.
Another development, "Munjoy Heights," would be ritzier, with townhomes priced around $600,000 each. With 10% down, your monthly mortgage payment at Munjoy Heights would be about $3,750 — three times what a median-income household could pay. If your household pulls in $135,000 a year, you'll just barely be able to afford one of these townhomes.
According to the Census Bureau, about 17% of Portland households earn over $100,000 a year. These developments are catering to that end of the market: They're not the one percent, but they're certainly doing better than most of us.
All that said, rents would probably be even higher if these developments weren't getting built. If well-to-do households didn't have new condos at the Bay House and Munjoy Heights, they'd probably just buy up Munjoy Hill's old triple-deckers instead (many wealthy families have already been doing this over the past two decades, when there's been very little new housing development).
These developments, on the other hand, are replacing empty lots, so nobody's getting forced out. You could think of them as relief valves at the high end of the neighborhood's housing market — a diversionary tactic to distract rich people from their hobby of buying up Munjoy Hill's dwindling supply of middle-class housing.Tweet
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