Oregon has a housing crisis. And with it, good reason for establishing the state Housing Accountability and Production Office, which Gov. Tina Kotek launched on July 1 after it was first authorized in 2024 legislation.

In announcing the new housing accountability office, Kotek remarked, “My North Star is for every Oregonian to be able to afford a home. Our economic prosperity depends on it. I believe that we can get this done.”

If that is to happen, the target should be clear: There is no large crisis in the raw amount or supply of housing. The crisis lies in its price.

In this current decade, Oregon’s population increased only slightly, from about 4.2 million at the decade’s start, to about 4.3 million now, and there’s been no mass destruction of housing. Not a lot of houses are needed to service the population growth, since before the price explosion a half-decade ago, at a time when housing wasn’t widely seen as in notably short supply.

Legislative Republicans this April complained that in the last three years only about 43,000 building permits for residences had been issued in the state, well below the governor’s plan for 108,000. But the state’s number of households rose by about the same amount during that time. The new construction that happened should, in theory, have been enough to keep up with it.

In 2023 (the most recent year available), Oregon had about 1.75 million “households” with the average household comprising 2.4 people, according to the U.S. Census Bureau.

That same year, the Census counted in the state 1.88 million “housing units” — over 100,000 more housing units than the number of households — including “a house, an apartment, a group of rooms, or a single room occupied or intended for occupancy as separate living quarters.” It doesn’t include some other residential places, such as trailer and mobile home parks.

The upshot is that Oregon, like most states, has more residential units than households.

And there is no crisis for people of sufficient means. Anyone who can afford to plunk down a half-million or so (which includes many existing homeowners, in or out of state) will not have much trouble finding a house. People below that level, a large part of the population, may find that a house (or in some places apartment rentals, too) are simply out of reach.

The problem with Oregon’s housing crisis is affordability. The median house value in Oregon (which reflects purchase prices) as of May was $540,300, according to online real estate market platform Zillow. One home-buying calculator estimates that if a purchaser puts down 18% for the home — the median downpayment of home buyers in the U.S., according to the National Association of Realtors — they would need to have more than $97,000 saved, and earn more than $120,000 per year to afford their mortgage payments. That means fewer than a fifth of Oregon households could afford a median-priced house based on income. (Sales by owners of currently owned houses could expand that number.)

Despite the limited pool of buyers, prices have climbed and stayed high.

Why?

Oregon’s notably strict laws on land use are often mentioned as a cause of the problem. They may contribute to it, but many other states — such as next-door Idaho — have far fewer building restrictions but still have house pricing problems as bad, or worse, as Oregon’s.

High-priced homes can be more profitable for builders and developers, so they build more of them.

But the key explanation for why so many more houses are purchased, compared to the number of local residents who can buy, seems to be that relatively wealthy investors — individuals and especially businesses — are buying large numbers of houses and apartments in Oregon, and around the country.

Many national studies have found as much.

Redfin News, which tracks home sales nationally, said last August that investor home buying has been rising steadily in recent years — about 3% annually — and bought one of every six U.S. homes that sold — purchasing $43 billion worth of properties — and one of every four low-priced homes that sold.

Redfin found that during the 2nd quarter of 2024 in Portland, 13% of homes sold (valued at $511,419,529) were bought by investors, an amount rising in recent years. Many homes are then flipped and resold for still higher prices. All of that activity places upward pressure on sales prices of other homes as well.

A variety of buyers have been among the mass purchasers. Oregon Sen. Jeff Merkley has for several years focused on the role of hedge funds in home buys, and with U.S. Rep. Adam Smith, a Democrat from Washington, introduced in 2023 the End Hedge Fund Control of American Homes Act.

Merkley called hedgefunds, “a contributing factor that has made it more difficult for middle-class Americans to become homeowners and is contributing to America’s twin crises of housing unaffordability and wealth inequality.”

Others have disagreed about how large a role the finance organizations have played. But someone can afford to buy all those houses — in many cases well beyond the asking price — and less-wealthy wage earners cannot compete.

That would be a real and pertinent, albeit sensitive, topic for the new state agency to address. Until someone does, the housing shortage for most Oregonians will go on.

Randy Stapilus has researched and written about Northwest politics and issues since 1976 for a long list of newspapers and other publications.