A POINT OF PERSONAL PRIVILEGE: The Musical Chairs of the Housing Market

How Short Is the Shortage

Oregon’s short about 150,000 homes right now, depending on which economist you ask.

And, that’s just to break even.

Oregon will need to build around 500,000 more by 2045 to keep up with growth and make up for what we didn’t build over the last couple of decades. That’s half a million foundations that don’t exist yet. And, every year we fall behind, the hole gets deeper.

To put it in human terms: for every five families in Oregon looking to buy or rent a home, only four can actually find one. In some towns, it’s closer to three.

Cities like Eugene, Salem, and Portland are running vacancy rates around three percent. A healthy market is more like seven or eight. Anything lower than that and competition gets cutthroat. Families bid against each other, prices climb, and the people with the least to spend are the first to lose their place in line.

That shortage drives up prices for everyone in the market. Renters, first-time buyers, and even folks hoping to downsize.

People stay in rentals because they can’t afford to move.

That means, apartments don’t turn over.

And that means, rents climb higher.

So what happens to the household who can’t find a place to live either because it’s too expensive or because a home doesn’t exist?

People start improvising.

They sleep in cars, couch-surf, or pitch tents under overpasses. Not because they want to, but because there’s literally nowhere else to go.

How We Dug the Hole

Oregon didn’t wake up one morning and decide to have a housing crisis. We built it slowly, one well-intentioned rule and one “no” vote at a time.

It started with good ideas that went too far. Back in the 1970s, Oregon did something unique. We drew urban growth boundaries around cities to stop endless suburban sprawl.

The goal was to protect farmland and forests, and it worked. We’re still known for it.

But cities didn’t expand those boundaries fast enough to keep up with population growth. We protected the land around towns so tightly that we ran out of land inside them.

Then came zoning rules. Most cities reserved big chunks of land for single-family homes only. One house per lot, no duplexes, no apartments, no backyard cottages.

Then construction costs shot up. Lumber, labor, and permitting fees have climbed faster than wages. Oh, and the 2008 recession wiped out thousands of skilled tradespeople, and many never came back. Now, even when developers want to build, they can’t find enough workers to do it.

And of course, there’s the politics.

What one economist calls “death by a thousand hearings.” Every new project has to survive a maze of neighborhood objections, environmental reviews, and design approvals. Every delay adds cost, and every cost gets passed down to whoever’s trying to rent or buy.

So here we are. We built fewer homes than we needed for 20 years. We made it expensive and slow to build more. And we limited where those homes could go.

When you add it all up, the shortage wasn’t an accident. It was policy. Like sequels nobody asked for, the rules just kept coming, each one a little more complicated than the last.

When Supply Falls Behind, Prices Don’t Wait

Once supply fell behind demand, prices did what prices always do. They climbed until somebody couldn’t afford to keep up. The average Oregon home now costs nearly half a million dollars. That’s up about 60 percent in the last decade, while the average household income barely moved.

Renters have it worse. In a lot of cities, a one-bedroom apartment now takes up a third of a typical worker’s paycheck. For low-income families, it’s closer to half.

When rent rises faster than wages, something breaks. People don’t stop needing homes; they just spend more trying to stay housed. They take on roommates. They move farther from work. They skip meals or push off doctor visits.

For families already teetering (spending more than half their income on rent) it doesn’t take much to knock them over. One late paycheck. One medical bill. One landlord raising rent because “that’s what the market can handle.”

That’s how housing shortages turn into homelessness. It’s not sudden; it’s a slow slide. A family misses a month of rent, crashes with friends, runs out of couches, and ends up in a car.

Economists can plot it cleanly: every $100 increase in median rent raises a city’s homelessness rate about nine percent. But behind that neat statistic is a simple reality. When there aren’t enough homes, the market becomes a sorting system, and those with the least lose first.

So when you see tents under bridges or RVs parked along the shoulder, it’s easy to blame addiction or mental health. Those matter, but they’re not the root cause. The math is.

When rent outpaces wages and we don’t build enough homes, the system balances itself on the backs of the poor.

How to Catch Up

Fixing this won’t happen overnight, but the math cuts both ways. If a shortage drives prices up, adding homes brings them down. The problem is that Oregon’s been playing defense for two decades (protecting land, limiting density, and arguing about design) while demand just keeps marching forward.

The first step’s obvious: build more housing of every kind. Apartments, townhomes, duplexes, small starter homes. Every new home takes pressure off the rest. Even the “fancy” expensive homes and apartments help. When someone moves into a new apartment, they leave an older, cheaper one behind. Economists call that “filtering.” It’s how markets make housing more affordable over time, if we let them.

Second, make it faster and cheaper to build. Right now, the time between an idea and a front door key can stretch to five years. Every delay adds cost, and those costs roll downhill to the renter or buyer. The rules meant to protect neighborhoods often end up protecting scarcity instead.

Third, open the door to more housing where people already live. Most of Oregon’s city land is still zoned for single-family homes only. One house per lot, even if the lot could fit two or three.

If we want teachers, nurses, and young families to actually live where they work, we’ve got to make space for them: duplexes, triplexes, backyard cottages, and small apartment buildings where they make sense.

And we need a shelter system that’s built to last. Even in the best economy, some people will fall through the cracks, because of illness, job loss, or life just kicking them in the teeth. Oregon’s new statewide shelter program is a good start, but we’ve got to treat shelter like infrastructure, not charity.

Roads and bridges don’t depend on bake sales, and neither should beds.

The Line on the Chart

That chart, the one with rent on one side and homelessness on the other, isn’t really about good people and bad people. It’s about pressure. When the number of people who need homes rises faster than the number of homes we’re willing to build, something gives. And it’s always the people living closest to the edge.

The frustrating thing about economics is that it doesn’t care about intent. The math works whether we like it or not. We can pass resolutions about compassion, or we can make it easier to build homes. Only one of those changes the slope of that line.

So next time someone shows you that chart, the one where the dots climb neatly upward, city by city, don’t just see greed or failure. See scarcity. See a housing system gasping for air. Then remember: the line isn’t destiny. It’s a policy choice.

If Oregon wants that line to flatten, it doesn’t need more outrage.

It needs more doors and roofs.