Over the last several years, I’ve published several columns warning against the growing proliferation of Airbnbs in Portland. I argued that the rapid growth of Airbnbs (promising high summer and holiday rental returns) was destructive to residential neighborhoods and over time would decrease the supply of full-time rental housing. That’s exactly what has happened – and as the supply of year-round rental housing declined, the cost of such housing increased. That’s basic economics.
Portland responded to rising rental costs, not by dealing with root causes, but by passing rent control legislation. But rent controls don’t build or retain rental housing. Indeed, they drive small landlords out of business altogether or into the Airbnb business, thereby reducing the supply of year-round rental housing further and pushing the costs of such housing still higher.
Portland’s recent refusal to slightly soften its rental control law by lifting the cap on rental increases when a tenant voluntarily vacates a property, coupled with a call (“Commentary: State Legislature must fund immediate relief for Maine renters,” June 17) for a statewide rental relief program targeted to the needs of low-income people, indicates that we still don’t get it – heavy-handed rent controls and subsidies for low-income renters do not increase the supply of year-round rental housing.
Here are some things we can do now.
• Limit/roll back the number of Airbnbs in Portland and statewide – many cities in the U.S. and around the world are doing just that.
• Change our land use codes to allow more, and a wider variety of, low- and moderate-income housing to be built in residential areas, e.g., by reducing lot sizes, allowing second homes on large lots, and accessory dwelling units (aka granny flats) in large houses, etc.
• Begin to do again what we did in the 1960s, ’70s and early ’80s, i.e., build more public housing – this can be done tastefully if we learn from the lessons of the past.
• Require builders of upscale housing to set aside 10%-15% of planned units for market-rate buyers/renters.
• Crack down on unlicensed Airbnbs – insist that all Airbnbs meet minimum building codes, health and safety standards.
A longer-run strategy aimed at increasing the supply of housing would eliminate remnant parcels of land and/or vacant land areas that exist (in abundance) on the peninsula and along every major arterial road leading out of the city, e.g., Forest, Washington and Brighton avenues and Congress Street. These land areas are ripe for the building of infill housing – one or two units, a small townhouse in some settings, or larger projects like those built relatively recently in proximity to Whole Foods, along Commercial Street and Marginal Way, and most recently along in-town Congress Street.
Infill housing is cost effective; it takes advantage of all forms of existing infrastructure—shops, schools, roads, and water, sewer and power lines. The larger projects often build in (one or multiple stories) of parking capacity, thus minimizing the wasteful use of ground area for the parking of cars.
In short, the city can and should incentivize the public and private building of needed (for sale and rental) housing by a systematic (long-term) program that focuses on infill housing construction and on existing remnant (or vacant) parcels of land. This strategy is cost effective and puts people in closer proximity to where they work, shop, and recreate. More importantly, this strategy, by increasing the supply of housing in the city, will do two things – first, all housing costs will be reduced, and second – that component of the housing market that relies on year-round rental housing will see their costs reduced. That’s the goal; that’s what we’re aiming for. This too is basic economics; increased supply reduces costs.
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