Portland’s Zoning Policies Make the Housing Crisis Worse

By Lydia White

The masterminds behind Portland’s newest inclusionary zoning recommendations have proven once again to be economically illiterate.

The Portland Planning and Sustainability Commission unanimously recommended requiring developers with 20 units or more to make 20% of units “affordable” at 80% of median family income, or 10% “affordable” at 60% median family income.

This policy fails to accomplish the Portland Housing Bureau’s stated intentions to “harness the economic power of the private market to increase the supply of affordable housing.”

A simple economics lesson would show them their policies exacerbate the city’s affordable housing crisis.

Developers are indeed responsive to basic economic concepts like incentives and cost-benefit analyses. They will not, and cannot, eat 20% of their costs. As with any tax, costs are passed on to consumers. Developers must offset their losses by accepting taxpayer-funded subsidies, cutting costs (such as forgoing routine maintenance or major repairs), or raising the prices of remaining units. This makes housing even less affordable, forcing lower-income households out of the city and spurring gentrification.

Until such unintended consequences are seriously considered, Portland city leaders will continue to amplify the housing crisis. Only the most out-of-touch city planners believe they can defy the laws of economics and make a scarce commodity more affordable by decreasing its supply.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Uber Translated: Better Service for the Underserved

By Lydia White

It’s not news that free-market visionaries provide better service than their corrupt competitors, but big government advocates are reluctant to admit it, even when such enterprise benefits their causes.

Ride-hailing services like Uber and Lyft provide cheaper, timelier, and higher quality rides. They better serve those with lower incomes and disabilities. They give Portland residents a local source of income. They also better comply with city regulations.

Uber serves high- and low-income communities equally; taxis underserve poorer neighborhoods. Ride-hailing services connect the disabled with handicap-accessible cars; taxi companies force disabled users to wait and hope for one to eventually pass by.

The Portland City Auditor claims the Portland Bureau of Transportation (PBOT) isn’t doing enough to “monitor the quality of service by ride-for-hire companies” and ensure riders from low-income communities or with disabilities are fairly served. Yet PBOT found that while Uber and Lyft provide a plethora of data (too much, in fact, for PBOT to analyze), taxi companies fail to comply with the Bureau’s requirements. Moreover, Uber’s internal rating system provides its own system of accountability—including cleanliness and efficiency.

The free market is forging ahead with 21st-century technology. While cronyism befell taxi companies, Uber and Lyft created an innovative alternative.

Proponents of big government should embrace the free-market sharing economy, especially if they truly wish to help traditionally underserved minorities.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Money

Will the PUC Make Oregon’s Solar Energy Incentives Equitable?

By Lydia White

In accordance with House Bill 2941, the Public Utilities Commission (PUC) is making recommendations to the Oregon State Legislature to ensure Oregon’s solar energy incentives are equitable, efficient, and effective.

One recommendation is to modify the compensation method for solar energy, net metering. Under net metering, solar owners consume energy their panels produce. When energy produced is insufficient, solar owners purchase additional energy from traditional sources. When excess energy is produced, solar owners sell energy. Solar owners are compensated at above-market rates and are exempt from paying their portion of incurred costs. Such costs include operation and maintenance of the grid and “spinning reserves,” the alternative power source utility companies run continuously in case solar produces less energy than projected. The state’s incentive structure shifts costs from solar owners to non-solar ratepayers. As the number of solar owners increases, ratepayers bear higher costs. The PUC is recommending these costs instead be shifted to taxpayers. While the PUC proposal’s efforts to alleviate inequity are commendable, their proposed recommendations still constrain Oregonians.

Although solar owners are double-dipping into the taxpayer pot—once when receiving heavily subsidized (and therefore low-cost) solar systems and again when receiving above-market compensation—the solar community is vehemently protesting. Despite the outcries, the PUC should pursue its recommendation to transition from net metering while also rejecting subsidies from ratepayers and taxpayers alike. By doing so, the PUC’s recommendations could relieve Oregon’s ratepayers from substantial burden.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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