It’s Happening Again: New Housing Production Plunging but New Arrivals Keep Coming

The metro area's failure to build new housing during the Great Recession contributed greatly to the current housing crisis.

A big contributor to the shortage of housing in the Portland metro region is the fact that developers stopped building during the Great Recession even as population growth continued.

One of the striking pieces of information taken from a snapshot of the local economy the Portland Business Alliance released yesterday is that graphs show the phenomenon is happening again. New housing construction has tanked. (For an interactive version of this chart, click here.)

Meanwhile, people are still moving to Portland (and to Bend, but not to Seattle). The chart below shows quarterly migration by number of households.

Analysis of the data, compiled for the PBA by the consulting firm ECONorthwest, paints a dire picture.

"A lot of residential and commercial construction is near completion, but the pipeline for new projects is weak," the  report says. "According to the City of Portland Bureau of Development Services leading indicators, the total building permits applications received from May to October 2020 are down 27% and land use applications between August and October 2020 are down 35%. Land use final plat applications received to the city of Portland from August to October 2020 are down 71%.

"And construction of new apartments in the pipeline appear to be in a free fall, down 37%.

"The region is entering a period of underproduction, which—assuming Portland hasn't lost all its appeal—will continue to put upward pressure on prices and rents."

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