Sorry, folks, despite what you think and what you’ve heard, Portland’s future does not reside in more housing. It will be found in more jobs.
New high-paying jobs downtown.Or the lack of new high-paying jobs downtown.
Our fair city will take one of those two paths—one paved with newly created, family-supporting jobs generated by innovation or the one cobbled together out of low-paying service jobs.
It seems clear the path Portland’s pursuing now: it’s the hollowed out city composed of the newly arrived wealthy homeowners and the very poor, with the service-job middle class living out in Westbrook and beyond.
That’s because City Hall and city residents are only looking at one side of the affordability equation—the housing side.
That’s because for the past 10 years, the foghorns of local media and the spotlights of City Hall and megaphones of city residents have been touting exclusively housing as the solution. New housing. More housing. Subsidized housing. The latest study of the city’s housing problem, as if another were needed, has just landed.
But that’s only one side of the affordable housing question, the wrong side as it turns out.
More housing is not the answer.
Why? Because the forces driving the increase in the cost of all housing in Portland are huge. To name but two:
- The sheer volume of demand for downtown housing. The number of out-of-towners wanting to move to Portland from places like Falmouth, Maine, and Falmouth Massachusetts. Across the country mobile entrepreneurs young and old want to live in safe, healthy, attractive cities, like our Portland. A national interest in our downtown will overwhelm any number of new housing units we can bring online in this geographically constrained city of only 67,000 residents.
- The wealth of the people seeking to move to Portland. The baby boomers now retiring bring with them the last high middle-class earnings, the last great inheritances from mid-20th century America, and the hyper value of their real estate from suburban Portland, Boston, and New York.
These forces do not involve creating new jobs in Portland. The retirees already have their money and can pay for pricier housing than we have ever seen here before. Even at a half million plus for a condo, they think Portland housing is cheap, not expensive.
And there are 10,000 baby boomers retiring every day! It takes no percentage of them at all deciding Portland is their preferred Golden Years landing spot to fill every new dwelling we can squeeze onto our hillsides and parking lots at whatever price is asked.
The cost of new housing will increase for two other reasons:
- Due to the steep increases in the cost of construction (China’s demand for concrete, copper, and steel is one global driver.)
- Because the cheap vacant lots and surface parking being used for new buildings now will be replaced by teardowns and rising land costs.
Worse than all that, because the new condos are so large, fewer units are being built on the available land than could be.
And the wealthy moving into these expensive condos will need all kinds of services, from low-paid waitresses to low-paid dog groomers. This need will drive up the demand and monthly rents for existing apartments, driving our middle class further out to Gorham and Windham.
Meanwhile, Avesta’s building spree and the city’s new timid inclusionary zoning will have essentially no impact on housing prices. How do 100 new units a year of affordable housing ever catch up with Avesta’s waiting list of 3,000? And the Portland Housing Authority isn’t even in the development game, except for one architect-inspired project.
So get used to it: the cost of existing and new housing in the city is going to go up—probably by a lot—year after year no matter how much is built and no matter how much is subsidized.
So we as a city need to start looking at the other side of the affordability equation: how much the average family around here earns.
That topic—How will Portland generate new higher-paying jobs?—is the subject of our next post.