<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=192888919167017&amp;ev=PageView&amp;noscript=1">
Thursday, March 28, 2024
March 28, 2024

Linkedin Pinterest

In Our View: A Catch-22 in Housing

Vancouver market’s ties to Portland create both positive and negative effects

The Columbian
Published: March 18, 2016, 6:01am

Statistics about housing markets inevitably represent a bit of a Catch-22 for an urban area.

Developing a locale that is a desirable relocation spot can boost the local economy, attract people who work in growth industries and increase home values for those who already live there. At the same time, rising home values can price many people out of the market, contribute to an increase in the homeless population, and eventually drive away young workers suited for those very growth industries that are necessary for a thriving community.

So it is that differing conclusions can be reached about the latest analysis of Vancouver’s housing market. The numbers from February showed an 11 percent increase in new listings over the previous year, and a median sales price of $266,300. That price was slightly lower than the January median, but still represents a 6.6 percent increase from a tear earlier.

Undoubtedly, this area is desirable for those looking to relocate, and Vancouver is reaping residual benefits from a red-hot Portland housing market. Housing prices are being boosted by the region’s growing reputation as an enclave for the young, hip and creative, with demand for both home purchases and rental units outstripping supply.

This lesson in Economics 101 is represented by a recent analysis that ranked Portland as the 14th most expensive home market in North America, with a median sale price in December of $320,000. San Francisco and Manhattan took the top two spots on the list, with average prices of more than $1 million, and every city above Portland on the list is in a much more populated metro market (Seattle is at No. 7 with a median home price of $538,500). For Portland, one result of a big-city housing market has been the arrival of big-city problems that spill over to Vancouver, particularly in terms of homelessness.

And there are additional drawbacks to increasing home prices. As a report from Bloomberg News detailed this week, Vancouver, British Columbia, is experiencing a flight of millennials caused by home prices that rank as the sixth-highest in North America. “Unaffordability is emptying Vancouver of one of its most valuable assets — young people who grew up in the city and who are invested it,” said Ryan Holmes, a business leader in Canada’s Vancouver.

Portland is facing the same problem. While the city has understandably placed much emphasis upon dealing with its homeless crisis, big cities also can face a brain drain when young, educated professionals cannot afford to locate there. Vancouver USA can play a role in mitigating that, providing some more affordable options for those attracted to the metro area.

While free-market disciples cling to the notion that developers should be given free rein to follow market forces and determine what kind of housing is built in an area, in practice this results in the construction of only the most profitable homes. New construction, instead, should be managed to ensure a variety of housing options that cater to high-end customers as well as young professionals and low-income clients. Pricing large segments of the population out of the market has an overall negative impact on the local economy.

Inexorably, the Vancouver housing market is tied to the Portland market, attracting people who seek the amenities of a large city but wish to live in a smaller urban area or opt for the more affordable homes on this side of the river. And that has both positive and negative effects for the area.

Loading...