Hotel rooms

Hotel rooms are not a substitute for permanent accommodation

How much money is too much money? Governments throw out big numbers at budget time, sometimes it’s hard to tell.

But Brendan O’Connell, CFO of the City of Portland, noted some really giant numbers around housing recently that should really put things into perspective.

The city has budgeted $2.7 million for emergency shelters for the fiscal year that ends in June. The actual expense could be 10 times greater, possibly as much as $30 million.

Much of this money will be used to pay for motel rooms that have been used since the start of the pandemic to house people in ways that prevent the spread of COVID. Hotel bills have gone up, partly because more people need shelter and partly because the city has run out of cheap rooms to rent.

The city has been spending over $1 million a month since the summer, and the cost is steadily rising. In December alone, Portland shelled out $2.5 million to house 900 people.

To be clear, all of this did not come from the taxpayers of Portland. So far, the bill has been split by state and federal sources, though the federal program is due to expire this spring. But that begs the question of how much housing could Portland build if it had the money it is now forced to spend on hotel rooms?

According to Christian MilNeil, journalist and housing activist, the answer is “a lot”.

MilNeil, who flagged the spending in a tweet last week, did some quick math on what the city could do with that amount of money.

Since you pay for housing on time, it is a question of financing. If the city had $15 million to spend, which is tentatively planned for emergency shelters next year, it could build about $60 million in housing right now.

MilNeil sits on the board of the Portland Housing Authority, which is completing a new affordable housing project on Cumberland Avenue, with 60 apartments and a day care center that will cost around $20 million once paid for.

According to this measure, the $15 million from state and federal taxpayers for hotel rooms next year could create 180 apartments and three child care centers, which would make a real difference to Portland’s housing and labor markets.

Portland again saw a spike in newcomers, asylum-seeking immigrants crossing the southern border. At the end of last month, the city was sheltering 1,150 people a night, more than double what it was in the summer of 2019, when it turned Expo Portland into a temporary shelter after an influx of asylum seekers in town.

Settled in permanent housing, these people could be the workers the city’s employers say they can’t find. And housing them permanently would cost much less than housing them in hotels, even for a short time.

Of course, nothing is so simple.

Portland couldn’t spend that money on permanent housing because it comes from a COVID emergency program. And even if the city could redirect those funds, there are 900 people who need a place to sleep tonight.

But it shows that if we can find the money to respond to the COVID crisis, we should be able to find the money to respond to the current affordable housing crisis.

As MilNeil pointed out to me, it always costs more to deal with an emergency than to prevent it. Portland is building a 200-bed homeless service center, but if there are no permanent homes for the poor, the new shelter will fill to capacity. If the city, state, or federal government had invested in housing three years ago, we wouldn’t be paying for all those hotel rooms now.

Portland voters tried to solve the affordability problem in 2020 by passing the local Green New Deal referendum. It requires developers of buildings with more than 10 units to make 25% of apartments affordable to median-income tenants.

The jury is still out on whether this is a good policy (there is preliminary evidence that it discourages development and worsens housing shortages). But even if the pace of for-profit development doesn’t slow, it would take years to create as many affordable apartments using a market mechanism like the Green New Deal as the city could create now with the amount of money it can afford. she spends. on hotel rooms.

The pandemic has changed the way people think in many ways. Maybe one of them should be how expensive it is to stay.

Correction: An earlier version of this article misrepresented the cost of the Portland Housing Authority project on Cumberland Avenue. It’s $20 million. This has been corrected in the text above.


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