Does adding luxury housing trickle down to make housing more affordable for all?

2017-08-22T15:20:00-04:00

One of the new luxury apartment buildings constructed in 1910 was the Belmont Court, on the city’s growing East Side. Plans called for a modern 24 unit-apartment building with a range of conveniences. More than a century later, the Belmont Court building still stands...According to Zillow, average apartment rents in Portland are about $1,600 per month. With studio apartments renting at just under $1,100 they’re not exactly cheap, but they cost less per square foot than newly built units.

Drawing on research from housing blogger, Iain MacKenzie who runs Next Portland, Joe Cortright at CityObservatory shares some examples of affordable housing in Portland that had been considered luxury when originally constructed. The author argues that affordable housing has always been generated through a process called "filtering," in which the value of luxury apartments depreciates over time and those units subsequently, move down the market and become affordable. When building and development halts or slows, however, aging housing is not allowed to filter down and higher income households bid up the existing housing stock.

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Does adding luxury housing trickle down to make housing more affordable for all?