Portland, Oregon has ranked as high as #10 out of all cities in rates of homelessness, and currently has roughly 3,800 people sleeping on the streets. Another 12,000 are reportedly in overcrowded and unsafe conditions at shelters.
But according to recently released housing data, a solution to the homeless crisis in Portland seems to be lying in plain sight.
The Housing Vacancy Survey conducted by the U.S. Census Bureau estimated that in the second quarter of 2018, Portland had a 4.8 percent vacancy rate for the city’s approximately 352,000 apartments based on 2016 data. That amounts to roughly 16,896 vacant apartments. That figure is just a rough estimate, however — the survey notes that some of those apartments may have since been rented out to tenants who haven’t yet moved in. It also doesn’t account for new apartment construction that began since 2016, so the number of vacant apartments could possibly be even higher.
According to housing data site RentCafe, average rent in Portland is $1,425/month for a typical 752 square-foot apartment (slightly more square feet than a standard one-bedroom apartment). RentCafe’s data on average monthly rents can also vary by neighborhood, costing anywhere from an average of $1,498/month in Sylvan Highlands and Arlington Heights neighborhoods, and as much as $1,811/month in The Pear.
Even though Portland rents have slightly decreased by an average of two percent over the last year, policymakers are still likely searching for long-term solutions to the housing crisis, given the prevalence of homelessness in the Portland area. One solution may be a vacancy tax, similar to what Vancouver, British Columbia already has in place.
In April, CBC News reported that Vancouver generated $30 million in revenue allocated for affordable housing development by taxing livable housing units that remained vacant for more than six months. Only 3,300 properties out of approximately 183,000 registered rental units were subjected to the tax, as 5,200 other vacant homes were not taxed due to either ongoing renovations, title transfers, a recent death of the property owner. The median vacancy tax paid was $9,900, though one home was taxed as much as $250,000.
“For those who did not rent their property and chose to pay the empty homes tax, I just want to say thank you for contributing to Vancouver affordable housing funding,” Vancouver mayor Gregor Robertson said at the time.
If one were to assume a median tax of $9,900 for every one of the 16,896 vacant rental properties in Portland, that would amount to roughly $167.2 million in revenue. But if that money were earmarked for affordable housing, how many units could that money be used to build each year?
A December 2017 Oregon Public Radio report on a new affordable housing complex approved by the Portland City Council referred to a 240-unit complex at Northeast Grand and Hassalo, which would cost $74 million to build. This breaks down to an average cost of $308,333 per unit, meaning revenue from a similar vacancy tax in Portland could be used to build approximately 542 affordable housing units. Assuming the count of 3,800 people sleeping on Portland’s streets is correct, this new affordable housing would cut the population of homeless people sleeping on the streets by more than 14 percent.
Homelessness and an abundance of vacant apartments are a problem in other major American cities besides Portland. As Grit Post reported in March, there were roughly 248,000 vacant apartments and anywhere from 63,000 to 129,000 homeless people sleeping on New York City streets or homeless shelters on a given night. This means there are anywhere from 1.9 to 3.9 vacant apartments for every homeless person in New York City.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.