With the cost of living increases, insufficient wages, wealth inequality growth and continued gentrification of Portland and other urban areas, trying to keep a roof over one’s head is a struggle for the lower class of the U.S.
If you dream of owning a home one day, disappointment may be in your future. If a place of your own wasn’t in your plans to begin with, then rent will also continue to suck you dry while you are forced to work three jobs to afford a studio that costs more than a mortgage.
Older generations love to slam millennials and Gen Z for being entitled and spoiled, while themselves being ignorant of the fact that they benefited greatly compared to younger generations when looking at the data on cost of living and inflation over the years—especially when it comes to housing.
Taelor Candiloro of Anytime Estimate—a real estate number calculator and data collecting site—compares inflation to median housing costs in the U.S. According to Candiloro’s research, housing prices have outpaced inflation by 150% over the last 50 years. If inflation and home prices increased at the same rate, Candiloro argues the median home cost today would be $177,788—instead of the $408,100 that it currently is.
To make matters worse, the current median home cost in Portland is $547,041, much higher than the national average.
The statistics on Portland continue to be a lot more grim, as it is one of 13 cities in the country where the median cost of housing increased more than 200% since the year 2000—increasing from about $179,000 to the depressingly high $547,000.
Additionally, the current median household income of $67,521 would need to be $125,260 to afford a home valued at $325,677. Millennials in 2019 were faced with a 31% higher home-price-to-income ratio relative to what the baby boomers were facing in their thirties in 1985. No amount of boot-strap pulling is going to overcome such obvious hurdles.
Last month on an episode of 60 Minutes, investment company CEO Gary Berman claimed that millennials have no desire to own a home because they grew up in the sharing economy. Not only is this claim out of touch, but coming from the CEO of a company that owns over 30,000 rental properties in the U.S. rented to primarily millennials, it’s infuriating.
Perhaps more people would be able to afford a house if it weren’t for the perception that housing is a possible investment opportunity. Many investors now treat housing as a commodity.
Maybe it is a radical thought, but no individual or company should be able to have investment properties that are used to exploit people who want a shelter of their own.
While my sympathies for larger real estate investors are nonexistent, I am also not losing sleep over smaller landlords—owners of one to four properties—who lost money due to the pandemic. Especially when housing as an investment is considered inherently risky.
These landlords have unfortunately had to offload one or more of their properties to even larger property investors during the course of the pandemic—thus causing even higher rent prices for tenants.
Michelle Conlin of Reuters wrote about childhood friends who owned 96 units in Rochester, NY, almost offloading all of their units to out-of-state investors while claiming to be heartbroken having to do so. Sympathy is hard to find for people and companies that are inherently parasitic.
With the rapidly increasing rental prices combined with property investors both big and small treating housing as a commodity, it is no wonder that Portland was named the fourth-fastest gentrifying city in the U.S. in 2017.
If the dream of owning a house is out of reach, maybe the rental cap we have here in Oregon will help you to continue renting. In Feb. 2019, Oregon Senate Bill 608 passed, placing a cap on rent that equals 7% plus the annual consumer price index from the previous year, as well as a couple other protections for renters. Buildings that are less than 15 years old are exempt from that cap, unfortunately.
For 2022, the maximum amount that a landlord or property manager can raise your rent is by 9.9%. Yet the potential for your rent to go up more than $100 per month while still falling under the cap, makes it difficult to consider this a victory.
How many of the working class in Oregon received a raise recently that even matched the U.S. inflation rate of the last 12 months? Last November, Minneapolis and St. Paul voters passed an incredible rent control ordinance that was capped at 3%, though a Republican-controlled Senate committee is advancing legislation in an attempt to overturn the rent control measures that voters approved. Shame.
Looking elsewhere in the U.S., it’s even worse. The apartment unit I was living in less than two years ago in Tucson, AZ, had rent go up by more than $300—a price increase that no tenant should have to endure just to keep a roof over their heads.
The fact that rental increases in other places are far worse than here shouldn’t mean that we should allow this to keep happening to us, as it is going to continue to get worse for those who are already struggling.
People who think that they are smarter than me will say that the reason for all of these increases is increased demand and limited supply, as well as that pesky inflation that seems to make everything else raise in cost—except, of course, for our wages.
We all see the apartment complexes being built everywhere. We are being told that they will help alleviate the rent prices, ignoring the fact that these newer, cheaply built apartments charge rent that is higher than anything else in the area—incentivising other properties in the area to raise their rents to the cap, or even higher for any building that was built less than 15 years ago. They already add on monthly fees for all sorts of silly things anyways. Why do we need to pay pet rent on top of a pet deposit?
Along with numerous issues that younger generations continue to face, when do we say enough is enough? With no sense of irony, we are already being told by older generations that we are entitled and spoiled.
I say that they are actually in debt to us—and eventually it will be our responsibility to collect.