Friday, August 10, 2018

Zillow Rent Data-Portland Metro Rents From June 2011-June 2018: Bottom Tier Rents Increased at Substantially Higher Rate than Top Tier Rents.

A recent Washington Post story HERE said that Portland rents for lower income households had increased by 40% from June 2011-June 2018. 

To see how that played out over time I decided to follow up with Zillow and asked for monthly tiered rent data for the Portland metro area and was pleased to see the data back within a couple of days. [Kudos to Zillow for their transparency!].

Zillow uses 3 tiers, and provides the median rent for each tier. The one caveat is that their tiered data does NOT include large apartments, about 10% of rentals according to Zillow. I speculate this might impact the top tier rents IF new construction projects are large and IF the rents in those projects skew toward the higher end.   

With those caveats I have embedded below and posted HERE (as a PDF file) two graphs and data tables that show: 
1. Top and bottom tier Portland rents for every June from 2011-2018 with a cumulative increase  shown in the far left.
2. Year to year bottom and top tier % rent increases from June to June since 2011, with the cumulative June 2011-June 2018 % increase shown in the far left.

Some observations:

  • From June 2011-June 2018 bottom tier rents increased by $478 and top tier rents increased by $531. That was an increase in bottom tier rents of 42.9% while top tier rents increased by 29.7%. 
  • In every June to June 12 month period except one (June 2015-June 2014 ) bottom tier rents increased at a faster rate than top tier rents. 
  • Top tier rents decreased in the last two June to June periods, by 5.7% from June 2018-2017 and by .1% from June 2017-2016. In the same periods bottom tier rents increased by 2.0% and 2.9%.
  • Not shown on graph. In June 2011 bottom tier rents were 38% below top tier rents, but in June 2018 that gap had narrowed so that bottom tier rents were now 31% below top tier rents.   
  • Also not shown: Multiplying rent by 40=Income required for rent to be affordable. For bottom tier Portland rent in June 2011 $44,600 income required. In June 2018 bottom tier income required was $63,720. That's an increase of $19,120. 



Originally created and posted on the Oregon Housing Blog.

Wednesday, August 1, 2018

July 2018 Apartment List Data: City of Portland 2BR Median Rents Down 2.6% Since July 2017; 4 Year Increase 6.2%/$78 a Month.

Apartmentlist has published their updated apartment median rent data for July 2018 HERE.

Their methodology for rent calculations is HERE

According to their data in the City of Portland the July 2018 median 2 BR rent ($1,330) went up .7% from June 2018 ($1,321), but that is down 2.6% from July of 2017 ($1,365). 

I prepared the table pasted below showing YtoY rent changes for several Oregon cities, including multiple cities in the Portland metro area. 

Average City of Portland Monthly 2 Bedroom Median Rent Increased by $78/6.2 % in 4 Years ; That Was the Lowest Increase of Any Portland Metro City Reported. 
In the table below you will also see columns showing 2 BR $ and % changes from July 2014 to July 2018. 

For the City of Portland the estimated total 4 year July to July increase in the median 2 BR monthly rent was $78 /6.2% (from $1,252 to $1,330). 

That is the lowest increase of any city with data in the Portland metro area; Hillsboro and Tualatin both saw $600+/40%+ 2 BR median rent increases in the same time period. 

The City of Portland July 2018 median 2 BR rent ($1,330) is also the lowest reported in the Portland metro area. 

City of Portland vs City of Seattle
The 4 year City of Seattle 2 BR median monthly rent increase from July 2014 to July 2018 was $248 /17.5% (from $1,417 to $1,665) substantially more than the $78/6.2% reported for the City of Portland.
The City of Seattle 2BR median rent decreased by 2.3% in the last 12 months, less than the 2.6% reported decrease for the City of Portland. 



Originally created and posted on the Oregon Housing Blog


Monday, July 30, 2018

Oregon's 2nd Qtr Estimated Rental Vacancy Rate Ranked the Lowest in the Country in 4 of the Last 10 Years, But Not Any More. y

The Census released the 2nd Qtr. vacancy and homeownership estimates last week HERE

The data shows that the 2nd Qtr. Oregon rental vacancy estimate is 6.1%. That is down from 6.9% in the 2nd Qtr. of 2017, but that decrease is not statistically significant as it is within the margin of error. 

I went back for the last 10 years and prepared a graph that shows the estimated 2nd Qtr. rental vacancy rate for Oregon AND it's low to high vacancy rate ranking vs other states. 

2nd Quarter Estimated Rental Vacancy Rate RANKING Observations:
  1. In 4 of the last 10 years (2009, 2011,2013, and 2014) ZERO states had an estimated LOWER rental vacancy rate than Oregon. 
  2. By 2017, 17 states had an estimated lower rental vacancy rate than Oregon.
  3. In 2018, 19 states had an estimated lower rental vacancy rate than Oregon. 



Originally created and posted on the Oregon Housing Blog

Tuesday, July 17, 2018

Portland Rental Filtering vs Gentrification, Some Specifics.

I'm generally supportive of the idea of increasing housing supply as a long term means of increasing affordability via filtering. However gentrification can cause less affordability and up until now I had seen little analysis of those forces at work in the Portland metro.  

I recently ran across a HUD CINCH rental dynamics report HERE that compared the changes in housing inventory in the Portland metro area from 2002-2011.  

The report is complex and I encourage readers to spend some time reading it if your interested in learning more how the inventory of housing changed in the Portland metro area during that period (and likely changed even more dramatically in the last few years). 

The table below has the main take away for me: 

The total number of rental units in 2002 that became: 

  • LESS affordable in 2011 grew by 33.9% (gentrification), 
  • MORE affordable in 2011 grew by only 12.3% (filtering).

So on NET there were substantially MORE rental units that moved to a higher category of affordability (gentrification) than moved to a lower level of affordability (filtering).  

This occurred because the gentrification/filtering disparity was focused almost entirely in the Extremely Low Rent (below 30% MFI), Very Low Rent (greater than 30% and below 50% MFI), and Low Rent (greater than 50% but below 60% MFI) affordability categories. 




Originally created and posted on the Oregon Housing Blog. 

Monday, July 9, 2018

In 10 Years from 2007-2016 New Construction LIHTC Units Were 23% of All New Unfurnished Rental Apartments Completed, But Dropped to 9% By 2016.

I recently spent some time looking at the Multifamily Survey of Market Completion (SOMA) reports from the Census/HUD to better understand how many NEW apartments (5+ units) were coming on line ("completions") . [This survey data is available at national level, with no state level breakouts and only some metro breakouts].  

Buried in recent versions of those SOMA reports there is also an annual estimate of LIHTC apartment completions. I believe LIHTC survey data in the SOMA reports are substantially understated after I compared the survey data to LIHTC placed in service data directly reported to HUD from state housing agencies.


I compared the total (privately owned) unfurnished apartment completions from the SOMA reports (Table 9) to the more accurate LIHTC placed in service data unit counts from the HUD LIHTC database, focusing ONLY on units in LIHTC NEW construction projects (no acquisitions or rehabs). 


The table and two graphs in the PDF HERE, and embedded below, show the results of that analysis. 


Several observations:

  1. In 2007 there were 70,332 units in new construction LIHTC projects placed in service. 
  2. By 2016 units in new construction LIHTC projects placed in service dropped to 26,154 units, a 63% decline. 
  3. From 2007-2016 (privately owned) unfurnished rental completions increased from 104,800 (2007) to 262,500 (2016), a 150% increase 
  4. Adding the two together there were a TOTAL of 175,132 unfurnished rental apartment units completed in 2007, increasing to 288,654 completed unfinished rental apartment units in 2016 (an increase of 65%).
  5. In 2007 units in new construction LIHTC projects placed in service were 40 % of ALL unfurnished apartment rental units completed.  By 2016 that percentage had dropped to 9%; but based on production in the earlier years the 10 year average percentage was still 23%. (Placed in service data for LIHTC projects in 2017 is not yet available. If the total LIHTC units go up the % may or may not go up depending on the change in total units completed). 
  6. 2,016,399 total unfinished apartment rental units were completed in the 10 years from 2007-2016 including 464,999 new construction units in LIHTC projects that were placed in service. 
  7. Fun fact: The 464,999 units in LIHTC new construction projects placed in service from 2007-2016 was 20% higher than the 387,100 reported new construction condo completions in the SOMA reports over those same 10 years.


Originally created and posted on the Oregon Housing Blog