I have often said to the business community, “Hey, business community, you have to stop crying wolf all the time.” Seriously, when someone proposes raising the minimum wage 10 cents or $10, they scream, “All business will leave.” When you want to ban companies from spraying deadly pesticides 250 feet from waterways, they cry, “All landscaping jobs will melt into the ocean.”
My personal favorite bug-a-boo, of course, is around housing. If you dare to regulate the housing market to prevent landlords from gouging tenants and to stop developers from only building luxury housing, the business community insists the housing apocalypse will descend.
Welp, business community, it’s just not true. And we have the receipts. Here in Portland, we raised the minimum wage almost 60% over 7 years and we still have jobs. We banned pesticides, and businesses simply adjusted to organic means of controlling invasive species.
And most tellingly, based on just-completed 5-year data from the City of Portland’s Planning Department, despite Portland having passed the strongest tenant protections in Maine – capping rent increases through rent control and requiring developers to set aside 25% of units as affordable through our Green New Deal – housing development is setting records and our pipeline could not be stronger.
In fact, in the five years since we passed these protections, Portland has approved more than twice as much housing as it approved in the previous five years.
Let me repeat that.
Since Portland aggressively confronted our housing crisis by passing the boldest protections for tenants in the state – a move that both developers and elected elites decried as the end of housing development – Portland approved twice as many units of housing than it did in the five years prior, including three times as many affordable units.
Let me explain what is going on in a few charts (the business community loves charts).
This first one shows the number of units approved by our planning board. These are housing developments that developers spent tens, if not hundreds, of thousands of dollars to get approved, market rate and affordable alike.
As you can see, even after developers knew all the units would be rent controlled and a percentage rented below market rate, they saw enough profit at the end of the day to double the number they wanted to build from 1,903 to 4,556.
But, you may ask, “How many have actually been built? Certainly some approved projects will fall through. Interest rates could double. Inflation could go through the roof. A pandemic might hit.” Great question! And, of course, all of that nasty stuff did actually happen in the second five year period we are studying, and yet…
That’s right. We built 30% more units since these “housing apocalypse” tenant protections were put in place.
And we did it despite Trump 1.0 and COVID putting our economy in a tailspin. Imagine what might have happened had interest rates not skyrocketed.
The next fair question is how big of an increase did we actually get in affordable units? After all, that is the single most important measuring stick as we attempt to reverse the housing crisis. Glad you asked.
Portland approved almost three times as many affordable units in the past five years, as were approved in the pre-rent control/Green New Deal era. And more than twice as many were built.
But, let’s say you are someone who believes in supply-side capitalism. That the true solution to our affordable housing crisis is to simply build an abundance of market rate housing so that the invisible hand of competition can bring down rents.
If that is you, you might rightly ask, “Well, how about market rate housing? No doubt that number has plummeted in Portland and you are simply building more subsidized units with funds that will soon dry up.”
Nope.
That’s right, market rate units have reached record numbers. From 2016-2020, before hell rained down on developers, to 2021-2025, Portland saw market rate housing approvals skyrocket from 1,389 to 2,998 units (a record), and almost 150 more built (also a record).
The best news from all of this is that because housing approvals have been so strong in the past five years, the next five will be even better, assuming we don’t start messing with the laws, making Portland’s future even brighter in regard to housing development.
Clearly, Portland has found the sweet spot where we can ensure strong protections for tenants, while still ensuring that record new housing is being built, both affordable and market rate. Other communities should take notice, as should the Maine legislature, and our next governor.
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