Monday, January 23, 2017

Reported Avg/Median PDX Rents are All Over the Place. Zillow Median Rent Much Higher than Others.

A recent Oregonian news story HERE reported that the current Zillow median Portland metro rent was $1,805. (I dug a little deeper and found that the Zillow median rent for the City of Portland was even higher at $1,861). 

Both of those rents are much higher than the Portland metro 2 BR HUD FMR of $1,236.  [Note that HUD FMR's also include a utility allowance, so the cost of rent alone is less the FMR]. 

The Portland Zillow median rent contrasts with another RealPage report the same week (HERE) that shows the median Portland metro rent as $1,242, 31% LESS than the Zillow estimate.

The December 2016 State of Housing In Portland report from the City of Portland (page 60) puts the average City of Portland rent at $1,347, 28% below the $1,861 reported Zillow median rent for the City of Portland.  The Portland report also provides useful breakouts by bedroom size, with the average rent for 2 BR units at $1,520, again substantially higher than the HUD 2 BR FMR of $1,242. 

The 2015 American Housing Survey for the Portland metro area says that the median cost spent for rent was $920. (Even if that was increased by 20% to adjust for differences in timing the result would still only be $1,104).

While I realize there is a difference between median and average rents and timing can also cause differences, the Zillow rent appears to me to be an outlier perhaps because it does not use only actual rent transactions/listings but instead adds a projection of what units might rent for IF they were available. 

To their credit Zillow does provide an explanation of their methodology (HERE) and access to a wealth of rent data (HERE) broken out by market segment (MF, SF, 1 BR, etc). AND 7 levels of geography. The median rent found in the Oregonian news story comes from their Zillow Rent Index series, which they explain uses models that "estimate rental prices on all homes, including those not presently for rent." [It isn't clear to me what mix of SF and MF rental units and bedroom sizes are used to arrive at the Zillow median rent estimate].

Rent surveys that only use listed rental prices have their own limitations as rent concessions reduce effective rents, especially in markets where there is excess supply.

Originally created and posted on the Oregon Housing Blog.





Thursday, January 5, 2017

Many Oregon Workers in High Demand Jobs Need to Work Long Hours/Two Jobs to Afford the Rent.

Building on my prior post HERE, I have constructed a new Excel worksheet HERE (and embedded below) that allows the user to select any combination of Oregon counties and 100 high demand occupations to see whether the 2016 statewide median wage for that occupation is sufficient to pay for the HUD 1 or 2 bedroom FMR at the county level.  

The last two rows of the worksheet show how many hours a full time median income worker would have to work to make the HUD 1 BR and 2 BR FMR affordable (with the wage earner paying 30% of their income for rent). 

The default setting shows in order from right to left the top 6 occupations with the highest # of annual openings and uses  Clackamas county (Portland metro) for rent comparisons.  [You can change the counties and occupations to meet your needs, but likely will have to download the file to do so]. 

The table shows that in the Portland metro area the median full time wage for 5 of the 6 highest demand jobs is NOT enough to make the HUD 1 AND 2 Bedroom Fair Market rent affordable. 

To make rent affordable for these 5 high demand occupations I calculate that the Portland metro median wage worker would have to work between 70 and 83 hours a week to make the 1 BR FMR affordable and between 83 and 98 hours a week for make the 2 BR FMR affordable. 


Originally created and posted on the Oregon Housing Blog

Tuesday, January 3, 2017

Jobs in Demand in Oregon Don't Pay Enough to Make Rent Affordable

The Oregonian recently did a story HERE  showing the top 100 occupations in Oregon based on projected annual job openings from 2014-2024 and included the 2016 median hourly wage for each of these occupations. 

I sorted the list and did a calculation of the weighted median wage for the 18 occupations that made up 50% of the projected annual job openings from these 100 occupations. 

As the table pasted below shows the weighted average median wage for those 18 occupations was $12 an hour, with the highest median wage of $41.55 (Registered Nurses) and the lowest $9.73 (Waiters and Waitresses ). 

I then went a step further and calculated the rent that would be affordable at the median wage for each of the occupations. 

For all 18 occupations the average median weighted hourly wage of $12 would make a $624 monthly rent affordable (at 30% of full time income). [Tip: To calculate an affordable monthly rent when you know the hourly full time wage, multiply the hourly wage by 52]. 

This $624 affordable rent at the weighted average median rent for these 18 occupations is lower than the HUD 2 BR FMR for EVERY county and metro areas in Oregon. (Oregon 2 BR HUD FMR's range from $681 to $1,242).  

Moreover, this $624 affordable rent at the weighted average median rent for these 18 occupations is ALSO lower the 1 BR FMR in every Oregon metro area, except Salem. (The Salem 1 BR HUD FMR is $612) 

Originally created and posted on the Oregon Housing Blog.

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Friday, December 9, 2016

Housing Related CBO Deficit Reduction Options Include Elimination of Voucher and LIHTC Programs.

I created the 11 page PDF HERE with housing related items I found in the larger just published 316 page CBO document HERE with options to reduce the budget deficit. 

Housing related items I found:

  • Fannie/Freddie reforms, 
  • Changes in the HUD Home Equity Loan program, 
  • Increasing tenant share of income paid for rent in subsidized rental programs, 
  • Reducing or eliminating the HUD voucher program, and
  • Changing the MID to a 15% non refundable tax credit. 
  • Eliminating the Low Income Housing Tax Credit program.


Originally created and posted on the Oregon Housing Blog.


Thursday, December 8, 2016

New ACS 2011-2015 Renter Cost Burden Data by Income Out: My Excel Lookup Includes 1,000+ Geos From US to OR Census Tract Levels.

Readers may recall that last December I did a post with an Excel workbook (HERE) that showed ACS 2010-2014 rent cost burdens by income levels; it included a lookup worksheet that allowed users to select from more than 1,000 geographies from the national level all the way down to the Oregon census tract level. 

On Thursday Census released 2011-2015 ACS data so I have constructed a similar workbook HERE that also includes a lookup worksheet that displays counts and percentages of rent burdens by income levels and a graph that displays the results for the chosen geography. The workbook includes worksheets with the raw data and a link to the query that you can paste into a web browser to replicate the data I used. 

The main point that the data illustrates is that rent burdens decline significantly by income levels and severe cost burdens are virtually non existent for renter HH's above $50k in Oregon, and the US. (There may be some cities and metro areas outside Oregon where that isn't true, but they are the exception and not the rule). 

The table/graph pasted below for Oregon illustrates this point (you may need to scroll to right to see full table/graph):



Putting this together required a fair amount of data manipulation:). IF you discover any problems drop me an email and I will take a look. (housepdx@gmail.com)

Originally created and posted on the Oregon Housing Blog