PORTLAND, Ore. — Of all the homes Cynthia LaChester has known, this one, an unassuming two-bedroom in this city’s east side, has been the most significant.
There’s nothing particularly remarkable about it. The complex it’s in resembles a motel, with outdoor stairways and faded walls of eggshell white.
But for 10 years, it’s been a constant in a life otherwise marked by unrelenting twists and turns. Now LaChester faces another twist that has her wondering if she’ll need to move again: A rent hike of 14.6 percent, effective in the coming months.
That is the maximum allowed under a rent control system Oregon passed in 2019. It was the first in a national wave of new, more flexible “rent stabilization” laws intended to protect vulnerable renters in high-cost cities, without squelching new construction or crushing landlords.
It is the closest example of the kind of rent limits Mayor Michelle Wu wants to enact in Boston, should she be able to push a proposal through the Legislature. And while Oregon’s model has had its successes, helping some people in Portland manage a brutal housing crisis, it’s not working for everyone.
LaChester is 70; her Social Security and pension won’t cover the new $1,400 monthly rent. So she’s gone back to work, pulling graveyard shifts as a janitor at a local university.
“If it wasn’t for this job, I’d probably be dead,” LaChester said as she sat in her living room on a recent afternoon. “It’s the only reason I’m still in this apartment. Otherwise I’d be living in my car.”
That might sound extreme, but that’s Portland these days, an eclectic West Coast city grappling with surging housing costs that threaten its identity and have spilled over into the streets, where tents have become a new and unavoidable piece of the urban fabric.
A cornerstone of the city and state’s attempt to address the problem is rent control.
Oregon became the first state to cap yearly rent hikes when it passed the 2019 law, tying allowable increases to inflation much as Wu wants to do. Four years in, the results of the state’s experiment are by all accounts mixed, and offer some key lessons for what could play out if Wu’s policy — modeled after the effort in Oregon with one key difference — goes into effect.
Rents in Portland are still on the rise, driven by the pandemic, tight housing supply, and extraordinary levels of inflation over the past two years; inflation, in turn, has pushed the state’s limit on rent increases higher. The real estate industry says that rent control and a number of other tenant protection policies enacted in Portland have made it too difficult for small property owners to stay in business.
Tenant advocates, on the other hand, say the 2019 rent control law was a step in the right direction, and that it is time for another. The law succeeded in temporarily heading off the most severe rent increases, throwing residents a lifeline, but they say tightening it — with a hard cap of 10 percent per year, as Wu is proposing in Boston — is a critical next step.
“What we have in Portland is more than a housing crisis, it is a calamity,” said Sybil Hebb, the director of legislative advocacy at the Oregon Law Center. “We’ve seen rent control in action. We’ve seen that it can work. We’ve also seen that what we have now isn’t doing enough.”
A river port city situated on Oregon’s northern border, Portland was for decades known best for the natural beauty of the snow-capped mountains and fir trees that frame its urban core.
That began to change in the ‘90s and 2000s as tech companies moved in, along with an influx of young people attracted to the city’s quirkiness, natural beauty, and perhaps most important, rents and home prices far cheaper than in other West Coast cities like Seattle and San Francisco.
Between 2000 and 2020, the Portland metropolitan area grew by 600,000 people to about 2.5 million, putting immense demand on the city’s collection of pastel-colored single-family homes and duplexes built decades ago. New construction couldn’t keep up, limited in part by a law aimed at reducing urban sprawl by restricting new development outside certain boundaries.
Today, Portland is an epicenter of the West Coast’s housing crisis, one of roughly a dozen US cities that have seen median home prices triple since 2000 — faster than more expensive cities like Boston and New York. And, rents have followed suit, climbing 40 percent in the 2010s, faster than almost anywhere in the nation. Today a two-bedroom goes for $1,885 per month, according to the rental website Zumper.
“When you add a huge influx of new residents like Portland has seen to an area that has artificially restricted its own growth, regardless of good intentions, costs are going to go up,” said Rebecca Lewis, a planning professor at the University of Oregon. “And the people that are going to suffer are the people who already lived here and who depended on lower costs.”
The human cost is impossible to miss.
Tents are everywhere from downtown street corners to grassy medians. Cars brimming with belongings and blankets are a frequent sight. Some people live in RVs parked on residential blocks.
To be sure, the city’s struggle with homelessness is at the center of a cascade of crises rippling through West Coast cities right now, from the opioid epidemic to untreated mental health issues to vacant downtowns. But the fact that rents here have surged is a huge piece of that puzzle, pushing people onto the streets and making it much harder to get back into a home.
Then came Oregon’s rent stabilization law. Enacted in 2019, the idea was simple, and a far cry from the strict, New York City-style rent control that landlords so fear. Property owners across the state could raise rent by that year’s Consumer Price Index plus seven percent, with new buildings exempt from those limits for their first 15 years. (Mayor Michelle Wu’s proposal would limit rent increases in Boston to 6 percent plus the CPI, with a firm cap of 10 percent).
For a time, the policy worked as intended. It didn’t grind the housing market to a halt — the 15-year exemption gave developers time to make some money. And it didn’t stop evictions or rent increases altogether. But limiting rent hikes to, for example, 9.9 percent in 2020, gave tenants some desperately needed stability, and predictability.
“Rent control is incredibly difficult to legislate,” said Lewis. “But generally speaking, Oregon’s law was written in such a way that landlords can still make things work, housing is still being built, and these massive rent increases that really hit people hard are a little less common.”
Then came soaring inflation, and this year rents can climb as high as 14.6 percent.
And they have.
There are no solid data yet, but stories of rent increases that big are frequent and have a desperate edge. This has prompted a push to change the law to create a hard cap of 10 percent no matter how high inflation goes. Nearly 1,500 people submitted testimony to the Legislature in support of such a measure earlier this year.
“These are the exact kind of outrageous rent increases that we were trying to prevent with the original legislation,” said Donovan Scribes, the communications manager at the Community Alliance of Tenants, an advocacy group. “People are being pushed to the edge.”
But some landlords, too, are starting to feel pressed hard, even under the current, more moderate, law.
Benjamin Ficker, a multi-family investment broker with the firm KW Commercial, said that Oregon’s rent control law along with the other renter protections that have been passed in Portland have made “owning a rental property as a small business” feel impossible. His clients, who are mainly small landlords, are often confused about how much they can raise rents. Some simply increase it the maximum allowed, every year. As a broker, he hears from a lot of people who are ready to get out of the business entirely.
“The majority of my clients recently have been longtime property owners who are looking to get out of Portland,” said Ficker. “To me that’s alarming. We’re losing the folks who are more likely to cut their tenants a deal.”
One thing everyone agrees on: New construction has remained relatively strong. That’s partly due to the other piece of Oregon’s 2019 housing reforms — looser zoning laws. The state legislature passed a law allowing for duplexes on single-family lots in cities across the state. Portland went a step further, enabling three-families and fourplexes in formerly single-family zones, as well as Accessory Dwelling Units — also known as backyard homes or “granny flats” — and so-called cottage clusters, smaller homes with a shared yard.
These new options haven’t quite sparked a building boom. Housing construction here has remained steady, though the recent rise in interest rates could undermine that. But those newly-allowed housing types have begun popping up, and have given developers more flexibility in designing and financing projects.
In East Portland’s Cully neighborhood, for example, ADUs are beginning to populate the backyards of low-slung single-family homes, and some small cottage clusters are taking the place of aging houses. Tucked behind one wood-framed house, two identical ADUs — not much bigger than sheds —complete with windows and small front porches stand side-by-side. Such residences couldn’t have been built five years ago.
Across the city there were 212 fourplex units permitted between August 2021 and July 2022, according to city data.
“In a way we’re lucky in Portland, because the answer to this crisis is so obvious,” said Aaron Brown, an organizer with the housing abundance group Portland: Neighbors Welcome. “There are thousands of underutilized lots here. We just have to find smart ways to use them.”
Boston similarly has some prized neighborhoods of single-family homes on bigger lots. Broadly rezoning those areas and allowing for new housing types, though, is a solution that has yet to pick up much steam. Wu has proposed a more piecemeal approach to zoning changes.
In Oregon, how loosened zoning rules and tighter rent caps will balance out remains to be seen. No matter what, stabilizing the housing market is a long-term project. And right now, for someone like LaChester, the stakes are high.
She has lived all over the Western United States, and moved to Portland 10 years ago after winding up homeless in Washington state. Today, home is that tired apartment in a sprawling neighborhood near the city’s eastern border. There’s nowhere cheaper for her to go. Not even the rundown mobile home park down the street.
LaChester knows how little it takes — something as small as one rent increase too big for her budget — to tumble into homelessness.
The row of tents on the sidewalk a few blocks from her apartment, the RVs she passes on her late night drive to work, and the people who sleep on the streets outside of the university building she cleans, are ready reminders of that.
“I’ve worked hard in my life, and that’s earned me a small apartment that I can’t afford anymore,” said LaChester. “No wonder we have so many people on the street.”
Andrew Brinker can be reached at firstname.lastname@example.org. Follow him on Twitter at @andrewnbrinker.