of single-family homes and into multifamily
1969. During the 1970s, many counties in
housing.65 "People who don't have choices
California imposed urban-growth boundaries
and other growth-management tools. By 1979,
are getting pushed out as rents go up," says
city commissioner Eric Sten.66
most California housing prices had become as
unaffordable as those found in Hawaii.
Although planners never actually said they
Oregon urban-growth boundaries were
wanted to increase housing prices, it is not
imposed in 197985, but a severe recession
clear that they see high prices as a problem. "If
that caused the state to actually lose popula-
people want a compact urban area," said
tion during some years in the 1980s kept
Metro's chief land-use planner in 1996, "some
housing affordable through 1989. As the
increase in the price of housing is going to
occur."67 Higher prices would discourage peo-
state's economy recovered after that year,
prices rapidly accelerated.
ple from living in homes with large yards and
Growth boundaries limit the supply of
encourage more people to live in multi-family
land available for new home construction. In
housing, which planners considered to be a
1990, builders could buy an acre suitable for
good thing. In 2005, planners were elated to
residential use in the Portland area for
find that land and housing prices had gone so
$25,000.62 By 1997, the cost of the same acre
high that--without any subsidies--developers
In 2005, planners
were tearing down suburban homes and
was between $150,000 and $200,000. Because
were elated to
replacing them with high-density housing.68
median incomes had not increased signifi-
cantly, the National Association of Home
Yet high housing prices cause several serious
find that, thanks
Builders ranked Portland the second-least
problems. First, they deny low-income families
to housing that
affordable housing market in the country.63
the opportunity to achieve the American dream
they made
of homeownership. "Insidiously, the burden of
Growth boundaries are not the only cause
site-supply restrictions will fall disproportion-
of unaffordable housing. Other problems
unaffordable,
ately on poor and minority families," says
include impact fees and an onerous permitting
developers were
Portland economist Randall Pozdena. Pozdena
process that allows anyone in the state to chal-
estimates that if Portland's planning measures
lenge a proposed development without hiring
voluntarily
had been applied nationwide during the 1990s,
an attorney. One result of this regulation is
tearing down
more than a million young and low-income
reduced competition in the housing market.
suburban homes
families would have been prevented from buy-
"The urban growth boundary has really been
ing homes.69
our friend," says a leading Portland home-
and replacing
builder. "It kept the major builders out of the
High housing prices may create windfall
them with
market."64 Of course, in this case what is good
profits for some homeowners--but it is mere-
high-density
ly a paper profit unless they plan to sell and
for homebuilders is bad for homebuyers.
then move to a lower-cost region or a smaller
In 1989, Portland's value-to-income ratio
housing.
home. However, this windfall, too, is
was less than 2. By 1999, it had increased to
inequitable, as the people buying their first
more than 3. It was no fluke that this increase
homes tend to be less wealthy than those
was greater than that of any other U.S. urban
who already own their homes.
area: the second- and third-greatest increases
High housing prices also slow the growth of
were in Salem and Eugene, Oregon. Today, as
urban areas. Silicon Valley saw an exodus of
noted in the discussion of Mayor Potter's
firms to the Portland area in the early 1990s,
VisionPDX, housing affordability is a major
when Portland was still affordable. But by
concern for many Portland-area residents.
2000, Portland's high housing prices led many
Unaffordable housing hits low-income
potential employers to look to Boise, Omaha,
families particularly hard. With the growth
or other affordable communities.
boundary limiting new home construction,
Research in Britain, which has practiced
many young families are gentrifying low-
growth management since 1947 and suffers
income neighborhoods in Portland, pushing
from some of the highest housing prices in
former renters in those neighborhoods out
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