It's Not Your Coffee Habit: Fixing Affordable Housing in Portland

Why building more homes is only part of the solution.

It's Not the Coffee

Remember when a millionaire told young people they couldn't afford to buy homes because they spent too much money on avocado toast?

Every few years, someone dusts off that argument with a new snack.

So let me get this out of the way: housing isn't unaffordable because you like a Black Forest Mocha on the way to work.

Nearly half of American renters spend more than 30% of their income on housing.

And here in the Portland metropolitan area, the National Low Income Housing Coalition estimates a shortage of 72,619 affordable and available rental homes for extremely low-income households.

That's not a latte problem.

That's a system problem.

And it's a problem that affects far more than renters. It affects first-time homebuyers, existing homeowners, people trying to move, and businesses that depend on workers being able to afford to live in the communities where they work.

To understand why fixing affordable housing in Portland has become so expensive, we need to look beyond what people spend their money on and examine how housing is actually produced, financed, bought, sold, and maintained.

Because all of it is connected.

Housing Isn't Three Separate Markets

We tend to talk about rental housing, resale homes, and new construction as though they're three independent markets.

They're not.

Consider a young couple renting an apartment in Portland. They'd like to purchase their first home, but higher mortgage rates and home prices have pushed the monthly payment beyond their budget.

They remain renters.

Now consider a homeowner who purchased a house several years ago with a 3% mortgage. They'd like to move into something larger, but replacing that mortgage with one at today's rates would substantially increase their monthly payment.

They stay put.

Meanwhile, a developer has plans to construct a 200-unit apartment building. The land has been acquired, architectural plans completed, and permits are moving forward. But construction costs and financing rates have increased to the point where the anticipated rents no longer justify the investment.

The developer postpones construction.

Three entirely different situations, but each affects housing availability.

The renter doesn't become a buyer. The homeowner doesn't put an existing home on the market. And the developer doesn't add 200 new apartments to the housing supply.

Now multiply those decisions across thousands of households and hundreds of potential developments.

That's how financing conditions, construction economics, and household decisions interact to influence rents, home prices, and housing inventory.

And it's why simply telling people to save more money misses the larger problem.

When Fewer Companies Control More of the Housing Supply

Consolidation isn't unique to homebuilding.

We've watched industries ranging from airlines and banking to agriculture and healthcare become increasingly dominated by large corporations.

Sometimes consolidation creates efficiencies that benefit consumers. Larger companies can reduce costs, improve operations, and invest in things smaller competitors cannot afford.

But there's another side to that equation.

When fewer companies compete for the same customers, those companies may gain greater influence over pricing, production, and the availability of goods and services.

Housing deserves the same scrutiny.

Research from Harvard University's Joint Center for Housing Studies found that the 100 largest homebuilders increased their share of new single-family home sales from approximately 35% in 2002 to nearly 50% in 2020.

Two companies, D.R. Horton and Lennar, accounted for almost two-thirds of that increase.

More recent research suggests the consequences may extend beyond market share.

In a September 2026 working paper, Boston University economist Zheng Liu examined 70 mergers involving major homebuilders between 2004 and 2019.

The study found that, in markets where both merging companies had previously competed, consolidation was associated with reduced new-home supply, higher prices, and lower construction quality compared with markets where the merging builders had not previously overlapped.

The research also identified an important distinction: while acquiring builders could complete their own projects faster after mergers, market-wide construction outcomes did not necessarily improve.

In other words, efficiencies benefiting individual companies don't always translate into benefits for consumers.

It's important to recognize the limitations. This is a working paper, and it examines major single-family homebuilders rather than the entire housing industry.

But it raises an important question.

If companies can protect profitability by limiting production rather than expanding it, are their financial incentives always aligned with the public's need for more housing?

That doesn't mean every large builder restricts supply or that every merger harms consumers.

Nor does it establish that consolidation is the principal cause of Portland's housing shortage.

But it challenges the assumption that allowing companies to become larger and more efficient necessarily produces more affordable housing.

And here's why this matters beyond new construction.

New homes compete with existing homes. When builders produce fewer homes than they otherwise would, buyers have fewer alternatives. Under conditions of strong demand, that can increase competition for resale properties and contribute to upward pressure on prices.

Rental housing is connected to that same market. When purchasing becomes less affordable, some households remain renters longer. When apartment construction also slows, those households face fewer rental alternatives.

The effects aren't identical in every city, and Portland's apartment development industry requires separate examination.

But the broader principle is important: competition and housing production in one part of the market can influence affordability elsewhere.

This is why consolidation should be part of the housing affordability conversation alongside zoning, construction costs, financing, and public investment.

We shouldn't assume that bigger is always better.

We should ask whether consolidation is producing more homes, better homes, and more affordable homes—or simply more profitable companies.

Portland's Housing Market Is Different, but the Economics Are Connnected

There's an important distinction between the national research and Portland's housing market.

The consolidation studies primarily examine single-family homebuilders.

Portland, however, has increasingly relied on multifamily construction to expand its housing supply.

According to the Portland Housing Bureau's 2024 State of Housing report, approximately 75% of residential units permitted in the city between 2010 and 2024 were multifamily units, while approximately 11% were single-family homes.

Those are shares of permitted units, not the city's existing housing stock or the number of construction projects.

Still, they raise an interesting question.

If relatively few new detached homes are being added to Portland's housing supply, what happens to the price of existing detached homes when demand for them remains strong?

Buyers looking for a detached house don't necessarily consider an apartment or condominium an equivalent alternative.

And when new construction provides relatively few choices in a particular housing category, buyers may face greater competition for existing properties.

Of course, the opposite consideration matters too. Portland has limited land, and building multifamily housing allows more households to live on the same amount of land.

The objective shouldn't be to favor one housing type at the expense of every other.

It should be to create enough housing choices to meet the needs of different households at different stages of life.

There's also an important economic reality.

In May 2025, Portland had more than 7,300 proposed homes in its private development permitting pipeline, including approximately 6,000 apartment units in buildings containing 10 or more homes.

But being in the development pipeline doesn't mean a home will be built.

Developers still need financing. They need construction costs that make sense. And they need confidence that the rents or sale prices will justify the investment.

If those numbers don't work, projects can be delayed or abandoned.

From a business perspective, that decision is understandable.

But from a community perspective, the consequences can be significant.

Fewer new apartments can mean fewer rental options. Fewer new homes for sale can increase competition for existing homes. And when households can't afford to move, available inventory can become more constrained.

And there's another complication.

Even when new construction moves forward, the rents or prices necessary to make a project financially viable may be substantially higher than what lower-income households can afford.

That's the distinction we need to understand.

Fixing Affordable Housing in Portland needs more housing at prices people across the income spectrum can actually afford.

A healthy private development industry is essential to meeting the region's housing needs.

But private development alone cannot be expected to produce every type of housing the community requires.

Especially when the people with the greatest need have the least ability to pay.

Public Dollars, Private Assets

That brings us to another part of the housing system: how we use public money to help people afford housing.

Consider Home Forward, the public housing authority serving Portland and Multnomah County.

Home Forward is a public agency, not a for-profit company. It operates housing programs, owns and manages affordable properties, and administers federal rental assistance.

According to figures reported in December 2025, Home Forward had an annual operating budget of approximately $298 million.

Of that amount, roughly $199 million was spent on rental assistance paid to landlords.

Much of that assistance comes through federally funded programs such as Section 8 housing vouchers.

The concept is straightforward.

Rather than requiring the government to own every affordable apartment, rental assistance helps qualifying households rent homes in the private market.

There are legitimate benefits to that approach.

Vouchers can provide housing choices, make use of existing apartments, and help families obtain housing without waiting for new construction.

But they also raise an important question about how we allocate public resources.

When taxpayers subsidize rent in privately owned housing, the assistance helps the tenant, but the payments generally do not create a publicly owned housing asset.

The landlord retains ownership of the property.

And the following year, the household may still need assistance.

That doesn't make vouchers a bad program. For many families, they're essential.

But it does suggest that rental assistance and permanent affordable housing investment should complement one another.

We should be helping people afford housing today while also investing in housing that remains affordable for future generations.

And we should be asking whether the balance between those two approaches is right.

Portland's Affordable Housing System Is Showing Signs of Strain

Unfortunately, even the affordable housing Portland already has is experiencing serious financial difficulties.

In December 2025, Home Forward reported a projected $35 million budget shortfall for 2026.

The agency's financial estimates subsequently changed. In July 2026, Home Forward acknowledged that an earlier improvement in its deficit projection had been calculated incorrectly, revising the estimated shortfall to approximately $31 million.

The financial problems were accompanied by troubling occupancy figures.

In November 2025, approximately 955 Home Forward apartments were vacant, representing roughly 14% of the agency's portfolio.

And according to information Home Forward provided to Willamette Week, it took an average of 185 days to fill a vacant unit during 2025.

Think about that last number.

In a city struggling with a shortage of affordable housing, the public housing authority was taking approximately six months, on average, to fill an empty apartment.

That deserves scrutiny.

But Home Forward isn't the only part of Portland's affordable housing system experiencing vacancies.

A 2026 Associated Press investigation examined the paradox of affordable apartments sitting empty while extremely low-income households struggled to find housing they could afford.

In Portland, an estimate published by CoStar and reported by Willamette Week in late 2025 identified approximately 1,863 vacant designated affordable apartments across the city.

That is a citywide estimate, not an additional 1,863 vacancies on top of Home Forward's reported total. Home Forward's vacancies were included in the broader picture.

How can that happen in a region with such an enormous shortage of affordable housing?

Part of the explanation is that “affordable housing” doesn't always mean affordable to the households with the lowest incomes.

Many income-restricted apartments are designed for households earning up to 60% of area median income.

But a household earning 30% of area median income may still be unable to afford those rents without additional assistance.

At the same time, when market-rate rents soften, some income-restricted apartments may become less competitive with privately owned apartments offering similar rents and fewer eligibility requirements.

Other vacancies reflect repairs, leasing delays, administrative requirements, and property management challenges.

That creates an uncomfortable situation.

We can have a shortage of deeply affordable housing and vacant income-restricted apartments at the same time.

The problem isn't simply how many affordable units we build. It's whether those units are affordable to the people who actually need them—and whether we're operating them effectively.

There's another financial reality.

Many developments serve households whose incomes are so low that the rents they can afford don't cover the full cost of operating and maintaining the buildings.

Insurance, utilities, maintenance, security, and staffing costs don't disappear simply because a property is designated affordable.

And when the financial model doesn't provide adequate operating revenue, buildings can fall into distress.

That's an important lesson for anyone advocating more public or nonprofit housing.

Building affordable housing is only half the challenge. Keeping it affordable, occupied, maintained, and financially sustainable is just as important.

Public ownership doesn't eliminate costs.

It changes who is responsible for covering them.

Which means any serious expansion of public or nonprofit housing must include long-term operating plans, transparent financial reporting, and measurable performance standards.

Otherwise, we risk repeating the problems we're trying to solve.

What Will the 21st Century ROAD to Housing Act Actually Change?

On July 11, 2026, the 21st Century ROAD to Housing Act became federal law, enacted as Public Law 119-101.

The legislation represents a significant bipartisan effort to address barriers to housing production and improve access to homeownership.

Its provisions address several parts of the housing system, including housing supply planning, publicly owned land, manufactured housing, financing, and certain federal housing programs.

Among its provisions are measures intended to support smaller-dollar mortgages, encourage housing development, and make better use of available land and financing tools.

These are meaningful policy changes.

But passing legislation and producing affordable homes are two different things.

Reducing barriers to construction doesn't automatically make homes affordable to households earning the lowest incomes.

Encouraging more development doesn't guarantee that projects will receive financing.

And increasing housing production doesn't, by itself, address the financial instability of affordable buildings already operating in Portland.

Implementation, federal funding, and the ability of state and local governments to make use of the new provisions will determine much of the law's eventual impact.

The larger issue is that we continue to approach housing primarily through two mechanisms.

We encourage private developers to build more homes. And we subsidize households that cannot afford the homes available to them.

Both approaches have value.

But where is the long-term strategy for expanding housing that remains affordable regardless of market cycles?

Where is the sustainable operating model for that housing?

And how do we make sure public investment creates lasting value rather than simply responding to the same crisis year after year?

Those are questions Portland still needs to answer.

What Portland Should Do

There's no single solution to a problem this interconnected.

But there are several practical steps Portland could take to improve housing availability, affordability, and the long-term effectiveness of public investment.

1. Protect the Affordable Housing We Already Have

Before spending billions to create new affordable housing, we need to make sure existing properties aren't being lost to financial distress, deferred maintenance, or operational failures.

That means funding operations, not just construction.

It means reducing vacancy turnover and establishing measurable occupancy targets.

It means matching available units to actual housing needs.

And it means providing appropriate funding for supportive services rather than placing unsustainable financial pressure on property operations.

The goal shouldn't simply be to preserve buildings.

It should be to preserve functioning, financially sustainable homes for the people who need them.

2. Expand Public and Nonprofit Housing That Remains Affordable

Portland should examine ways to create a larger inventory of permanently affordable housing that isn't entirely dependent on market-rate rents.

That could include social housing, community land trusts, limited-equity housing cooperatives, and the strategic use of publicly owned land.

Cities such as Vienna demonstrate how long-term public and nonprofit investment can support substantial amounts of mixed-income housing.

Portland could study which elements of those models might work locally, particularly their financing and operating structures.

None of these approaches is free.

All require financing, professional management, maintenance, and oversight.

But they offer something the private market alone may not provide: housing whose long-term affordability is an explicit objective rather than a byproduct of market conditions.

3. Encourage More Housing and More Competition

Public and nonprofit housing alone won't close Portland's housing gap.

We need private development, too.

That means creating conditions where responsible developers can build a variety of housing types, including apartments, townhomes, condominiums, smaller detached homes, and middle housing.

We should also pay attention to competition.

The national homebuilder research suggests that mergers among major builders can affect housing production and pricing.

That makes competition policy worth examining alongside land-use and financing policy.

We should encourage an environment where smaller builders and developers can compete rather than allowing financial and regulatory barriers to favor only the largest companies.

More competition won't solve every housing problem.

But a market with more capable participants has a better opportunity to respond to changing housing needs.

4. Address the Financing Problem

Interest rates influence almost every part of the housing market.

They affect what buyers can afford, whether existing homeowners decide to sell, and whether developers can finance new construction.

Portland cannot control national mortgage rates.

But it can examine how local policies affect the cost and predictability of development.

And where the market cannot financially support housing for lower-income households, public investment should be targeted toward closing that gap.

The objective should be straightforward.

If a project provides housing Portland needs, public policy should avoid making that project unnecessarily expensive or unpredictable.

5. Prepare for the 2030 Funding Challenge

Metro's supportive housing services taxes are scheduled to expire after tax year 2030 unless extended or otherwise changed.

That creates an important long-term funding challenge for the region.

Before asking voters for additional funding, regional leaders need to demonstrate that existing resources are being managed effectively.

That includes transparent financial reporting, measurable housing outcomes, and accountability for programs that aren't performing.

Portland should also examine whether future regional funding can more effectively support both the services people need and the housing required to achieve long-term stability.

The public deserves to know what its investment is producing.

Not just how much money is being spent.

6. Think Regionally, Not Just Within Portland City Limits

Housing markets don't stop at city boundaries.

Someone working in Portland may live in Beaverton, Tigard, Gresham, Vancouver, or Oregon City.

When one jurisdiction makes housing difficult or expensive to build, demand doesn't disappear.

It often shifts elsewhere.

That affects commuting patterns, transportation infrastructure, employment opportunities, and housing prices throughout the region.

Portland and its neighboring communities need coordinated housing strategies that recognize these relationships.

Regional housing targets, transportation planning, infrastructure investment, and affordable housing development should be evaluated together.

Otherwise, we're simply moving parts of the problem from one community to another.

What You Can Do

Housing policy is shaped by decisions made at city council meetings, planning commissions, legislative hearings, and budget negotiations.

Most people never participate in those discussions.

But the consequences affect nearly everyone.

If you're concerned about housing affordability, ask your elected officials about measurable results.

How many homes are being built? How many are affordable to lower-income households? How many existing affordable units are at risk? And what are we doing to preserve them?

Pay attention to policies that expand housing choices.

Demand accountability for public spending.

And perhaps most importantly, stop treating housing affordability as though it's simply the result of individual financial choices.

Housing Is More Than a Commodity

A home is simultaneously a place to live, a financial asset, an investment, and, for many families, their primary source of wealth.

Those roles aren't always compatible.

Homeowners benefit when property values rise.

Buyers benefit when homes become more affordable.

Landlords need enough revenue to maintain their properties and justify their investments.

Renters need housing costs that leave enough money for everything else in life.

Developers need projects that are financially viable.

And communities need enough housing to accommodate the people who live and work in them.

There's no way to make all those interests align perfectly.

But we can create policies that recognize the trade-offs rather than pretending they don't exist.

The private market has an essential role in producing housing. Competition, investment, and innovation matter.

So do public investment, nonprofit housing, thoughtful regulation, and accountability.

The challenge isn't choosing one approach and rejecting the others.

It's creating a housing system in which those approaches work together to provide enough homes at a range of prices, while preserving the housing we already have.

Portland's housing affordability crisis wasn't created by one company, one government policy, or one generation of homebuyers.

And it certainly wasn't created by someone's coffee habit.

It developed through decades of decisions about what we build, where we build, how we finance housing, and who can afford the results.

Fixing it will require understanding how those decisions are connected.

Because housing isn't a luxury. It's the foundation everything else in life is built on.

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Sources and Further Reading

• National Low Income Housing Coalition - The Gap 2026, Portland-Vancouver-Hillsboro metropolitan area.

• Harvard Joint Center for Housing Studies - Concentration in the Homebuilding Industry: Trends, Strategies, and Prospects (2022).

• Zheng Liu - Building the Bottlenecks: The Impact of Homebuilder Consolidation, revised September 21, 2026.

• Portland Housing Bureau - 2024 State of Housing in Portland.

• Portland Housing Bureau - May 2025 private development pipeline reporting.

• Home Forward - Agency financial and occupancy reporting.

• Willamette Week - December 2025–July 2026 investigations into Home Forward's budget, vacancies, and operations.

• Associated Press - September 2026 investigation into vacant income-restricted housing and extremely low-income renters.

• U.S. Congress - 21st Century ROAD to Housing Act, Public Law 119-101, July 11, 2026.

• Metro - Supportive housing services funding and regional housing planning.