[This commentary first appeared in Street Roots.]
When then-Portland Mayor Charlie Hales declared a housing state of emergency in 2015, many knew the housing crisis had been brewing for decades. The evidence was visible on our streets. Disinvestment in public housing and support services, a deficit of new construction, insufficient tenant protections and a shortage in rent assistance left thousands of Oregonians houseless or in precarious situations.
Since then, matters have only gotten worse. The suffering of individuals and families struggling to pay the rent or find shelter increased.
Beneath the housing crisis lays another disaster that’s been aggravating our housing woes. For decades, economic inequality has been rising as the rich have captured an ever-larger share of the fruits of the economy. It’s time for policymakers to recognize that confronting the housing crisis requires, in part, meeting economic inequality head-on.
Recent analysis by the Oregon Center for Public Policy shows the stunning levels of economic inequality afflicting our state. In 2020, the average income of a member of the top 0.1% of Oregonians — the richest one in every thousand Oregonians — reached a new high: $5.6 million. That record-setting feat came in a year when COVID-19 shuttered large swaths of the economy, nearly quadrupling the state unemployment rate. That same year, tens of thousands of Oregonians across the state experienced houselessness at some point during the year. Many thousands more lived life on the brink, hoping for extensions of the state’s eviction moratorium, which often came at the last minute.
As Oregon’s ultra-rich enjoyed record-setting highs in their bank accounts, things remained stagnant at best for the Oregonian in the middle. The median Oregonian took home about $39,000 in 2020, a mere 7.5% increase from what they earned in 1980 and less than they took home 20 years ago, after accounting for inflation.
If we consider not just income but also wealth, the picture becomes even more extreme. Wealth refers to the sum of all the assets a person owns minus all of their debts. Assets can take many forms, including real estate, stocks and other financial instruments, and ownership of businesses. Just three individuals in Oregon – the state’s three billionaires – together have more than twice the wealth of the bottom 50% of Oregonians. Nike co-founder Phil Knight alone owns more than the bottom half of Oregonians combined.
Like a house built atop a faulty foundation, a housing market operating in a society marked by extreme economic inequality seems bound to run into trouble.
And indeed, research indicates that rising inequality is helping fuel the housing crisis. A 2017 study examined the link between inequality and the struggle facing renters in the country’s 100 largest metro areas. It determined that as inequality rises, so does the rent burden — the share of the family budget going to cover the rent. This was particularly so for low-income households.
Another study found a link between income inequality and homelessness. As housing prices rise in areas where income gains are flowing mainly to the well-off, low- and middle-income residents see their housing costs rise. Some shoulder this burden by paying a greater share of their income toward housing. Others simply cannot keep up and are left homeless.
During the depths of the pandemic, the state’s eviction moratorium kept people housed at a time when many had lost their incomes and could not afford rent. Hundreds of millions of dollars in state and federal funds were rightfully deployed to help Oregonians pay their rent and stay in their homes.
Today, those protections have expired, and emergency funding has dried up. Monthly eviction court cases exceed pre-pandemic levels in parts of the state. Of all eviction cases filed in Multnomah County Circuit Court in October 2022, 92% were for nonpayment of rent. In some cases, landlords have refused to accept state rent assistance altogether, opting to instead pursue eviction in order to rent a unit to a new tenant at a higher price. Perhaps they will find a new tenant willing to spend a greater share of their income in order to keep a roof over their heads. For the evicted tenant, they are left to compete for the dwindling list of homes they can afford.
There is no quick fix for our state’s housing crisis. Additional housing construction, stronger investments in rent assistance, and more wraparound services are all crucial. But those investments must be paired with policies that rein in Oregon’s runaway inequality.
Progressive tax policy is one of the most important tools in the toolkit for reducing economic inequality. Not only do we reduce inequality by raising taxes on the highest-earning Oregonians, eliminating tax breaks for the rich, and taxing wealth, but these policies also generate revenue that Oregon can use to address the housing crisis. At the top of the list of ways to use that revenue would be creating a guaranteed income program, providing Oregonians with little or no income a source of flexible cash resources to help them afford their basic needs.
It’s time to recognize that until we confront the problem of economic inequality, it will be difficult to achieve a state where everyone enjoys a safe place to call home.