Why are the rents so high when wages don't support it? (Portland: subletting, rental market)

[pdxMIKEpdx]

Just to give an example of how much home prices have gone up in Portland:

In 1986, I bought a really nice bungalow style house in a popular area for $42,000, thought I was paying too much, but realized the potential.

I sold that house in late 2006, and did extremely well...

That same house sold for $489,000 last year.

LOCATION, LOCATION, LOCATION

[bler144]

Originally Posted by Deezus

Even living east of 82nd or north of Killingsworth--you're only about 15-20 minutes away from a lot of stuff--and once you're east of 82nd things get cheaper fast. Portland overall isn't cheap these days, but people will pay a premium to live close-in.

Even a lot of areas east of 82nd aren't particularly cheap to rent now, particularly if you're choosy about your neighborhood or don't want to live on a main drag (Halsey/Glisan/Division/etc.). I'd estimate prices in my stretch of northeast are in many cases up about 40-50% vs. 2009 when we decided we could afford to move back here.

[Deezus]

Originally Posted by bler144

Even a lot of areas east of 82nd aren't particularly cheap to rent now, particularly if you're choosy about your neighborhood or don't want to live on a main drag (Halsey/Glisan/Division/etc.). I'd estimate prices in my stretch of northeast are in many cases up about 40-50% vs. 2009 when we decided we could afford to move back here.

Things have gone up everywhere, but it's still considerably cheaper once you go east or north at least in comparison to inner neighborhoods. What you pay for a studio in inner SE and pay for a 1 bedroom at like SE 50th, you might pay for a 2 bedroom apartment east of 82nd. In part rents will continue to rise as long as people keep moving here, because US cities don't really build true high density housing except as sort of boutique areas or subsidized housing-and middle class people with families expect big homes. Rent continued to go up after the housing market dropped, because people who might have bought a home in the past, just rented so there was even more competition for rentals. Now it's harder to buy a home for many, so there's a lot of renters, alot of people competing for open rentals. Actually I think a lot of the eastside is overpriced--I think I see more bargains in SW Portland.

If I was having trouble making ends meet and/or had a family, I wouldn't bother living in Portland proper though. But the whole West Coast is overpriced for the most part.

[urbanlife78]

Originally Posted by Deezus

There's studio apartments in Inner SE or trendy areas of N/NE going for $1000 these days or 1 bedrooms going for like $1400. Though sometimes you can live a mile or two away and then save several hundred dollars with a small home. Home values can go from $1400 for a small home to $2200 in a short distance. One thing is that many people move to Portland think they have to live right in the middle of the most popular areas--so people can basically charge whatever they want if you're looking at the Mississippi area or inner SE or NW 21st or so on. Rental prices have gone up everywhere, even in some of the cheaper areas--though prices can drop if you're looking at a ranch home rather than an old Craftsman--or willing to live in a neighborhood with no sidewalks.

The thing is though compared to other larger US cities, distances aren't that far--so one can find something more affordable that's really not that far from the inner areas or downtown. Like my fiancee thought living at SE 71st was "far out"(and she grew up in inner NE Portland), but it's like 10 minutes to get to everywhere else in SE Portland. It's not the same as somewhere like LA or New York or Chicago or the Bay Area where you can find something cheaper but you'll end travelling for an hour to get somewhere. Even living east of 82nd or north of Killingsworth--you're only about 15-20 minutes away from a lot of stuff--and once you're east of 82nd things get cheaper fast. Portland overall isn't cheap these days, but people will pay a premium to live close-in.

That is one of the things I really love about the layout of Portland, it is easy to get anywhere in the city and still be able to find more affordable rents. Here in NYC, the rents we can afford puts us at an hour plus commute each way, which makes it hard to do anything else besides work and commute.

[urbanlife78]

Originally Posted by pdxMIKEpdx

Just to give an example of how much home prices have gone up in Portland:

In 1986, I bought a really nice bungalow style house in a popular area for $42,000, thought I was paying too much, but realized the potential.

I sold that house in late 2006, and did extremely well...

That same house sold for $489,000 last year.

LOCATION, LOCATION, LOCATION

Good for you, that was a perfect time to sell a house and really cash in on it. It is amazing how cheap housing was in Portland even up until the late 90s.

[dolph09]

What do you people think is going to happen when it is the official policy of the central bank of the nation to create unlimited currency and hand it to banksters to play with?

You think the cost of living is going to go down?

No, you are going to become perpetual debt and rent serfs. Most of all, the deluded people who want to live in a decent area and think they are rich and special because of it.

You are neither rich nor special. You are a serf in a declining country. Face the truth and then make whatever change you want to make based on that.

[colganc]

Originally Posted by redguard57

I work at a community college, so this kind of trajectory is definitely possible and I've seen a lot of people do it.

In my experience the biggest barriers are not the individuals trying to better themselves. If you're single and healthy, the process described is relatively simple and achieved fairly easily.

The biggest barriers I see are related to family and health. Either the person's health goes south, a family member's health goes south, or they have some kind of family tragedy or drama that mucks their education up. Kids are usually the single biggest problem. They get sick, they get involved with drugs, etc, etc...

ie: one of my better students this past year disappeared for weeks. I later found out that his wife left him overnight for another man and took his two kids with her, not a word of where they went. So he a couple weeks searching for them. With that level of stress it's hard to focus on school, so he had to drop everything. Now he lost all his money for that term and lost all that time.

I suppose this is a choice problem - since a lot of these people are in their 20s/30s with fairly old kids, meaning they had them in their teens or early 20s before they were ready, usually out of wedlock. Still, what I see are typically not losers who choose not to be successful. Those people are probably not in college.

Definitely agree that there are a lot of people that have problems outside of their control. I haven't seen that as a majority of those who are low income, but unfortunately that still leaves a lot of people that have had situations outside their control make it hard for them to attain their goals.

[skiffrace]

Originally Posted by urbanlife78

That is one of the things I really love about the layout of Portland, it is easy to get anywhere in the city and still be able to find more affordable rents. Here in NYC, the rents we can afford puts us at an hour plus commute each way, which makes it hard to do anything else besides work and commute.

There is the flip side as well. If you are looking to buy a house, in most other big US cities you are presented with a wide range of options and prices.
You can buy a $750K house in an exclusive neighborhood, or a $50K house in a ghetto, with lots of other options somewhere in-between.
This means that if you really want to, you have the opportunity to "put your feet in the housing door", even if your income is very modest. I saw that in Philadelphia, Baltimore, Indianapolis and Omaha.

Portland (and probably all of West Coast) is different. Here, you'll be hard pressed to find even the cheapest single family house in a remote area for much less than, say $180 to $200K.
This means that a lot of people with steady, but low paying jobs are locked-out of the house-ownership and all its advantages, forever.

[urbanlife78]

Originally Posted by skiffrace

There is the flip side as well. If you are looking to buy a house, in most other big US cities you are presented with a wide range of options and prices.
You can buy a $750K house in an exclusive neighborhood, or a $50K house in a ghetto, with lots of other options somewhere in-between.
This means that if you really want to, you have the opportunity to "put your feet in the housing door", even if your income is very modest. I saw that in Philadelphia, Baltimore, Indianapolis and Omaha.

Portland (and probably all of West Coast) is different. Here, you'll be hard pressed to find even the cheapest single family house in a remote area for much less than, say $180 to $200K.
This means that a lot of people with steady, but low paying jobs are locked-out of the house-ownership and all its advantages, forever.

That is definitely a shame, though I wouldn't want to like in the $50K neighborhoods in Baltimore or Philadelphia due to those areas being too unsafe. But it would be nice to see either the incomes in Portland go up or the cost of housing come down a little, the $100-200K range is good for those that want to own but can't afford much. In my opinion that is what East Portland and outer parts of the metro are for.

I also think when a developer chops up a single house lot and turns it into for small house/small lots, then the price should reflect that reduction of land.

[freemkt]

Originally Posted by pdxMIKEpdx

Just to give an example of how much home prices have gone up in Portland:

In 1986, I bought a really nice bungalow style house in a popular area for $42,000, thought I was paying too much, but realized the potential.

I sold that house in late 2006, and did extremely well...

That same house sold for $489,000 last year.

LOCATION, LOCATION, LOCATION

??? Even the crappiest locations in Portland are unaffordable.