Billions spent, homelessness surging, and nearly 1,900 subsidized units sitting dark
By Michael Phillips | CABayNews
Portland just handed the West Coast a case study in how not to run “progressive” housing policy.
According to new data reported this week, 1,863 publicly subsidized “affordable” apartments in Portland are sitting vacant — 7.4% of the city’s total affordable stock of 25,409 units. At the same time, Multnomah County’s homelessness crisis has exploded: more than 14,000 to 16,000 people are now homeless in the county, depending on the data source, and the homeless count is up roughly 60–67% since 2023.
You don’t get numbers like that from a “housing shortage” alone. You get them from a system that’s structurally broken.
For California readers, especially in places like Los Angeles, San Francisco, and Oakland, Portland’s mess looks uncomfortably familiar: big bonds, big promises, bigger bureaucracies — and very little accountability when the tents keep multiplying anyway.
Not a Supply Crisis, an “Activation” Failure
Industry experts generally say a healthy rental market runs at about 5% vacancy — enough turnover to give renters choices without leaving large numbers of units sitting empty. Portland’s subsidized stock is at 7.4% vacancy, well above that benchmark, even as waitlists stretch on and shelter beds remain full.
The OregonLive piece describes what Mayor Keith Wilson has branded an “activation challenge,” not a “doorknob challenge”: the doors exist, but the system can’t get people through them. Portland voters agreed in 2016 to a $258 million affordable housing bond expected to produce roughly 1,900 units — almost exactly the number that now sit empty.
In other words, taxpayers funded an entire bond worth of units that, for now, might as well not exist.
Why? The reporting and recent audits point to a familiar stew of dysfunction:
- Administrative bottlenecks that leave units vacant for months because waitlists are slow, outdated, or poorly managed.
- Affordability that isn’t really affordable — units priced at 60% of Area Median Income (AMI) that still overshoot what the poorest residents can pay.
- Competition from market-rate units, as Portland’s flat rent growth has narrowed the gap between “subsidized” and “market” rents.
- Provider strain as the main housing authority, Home Forward, faces a $35 million budget shortfall and staff layoffs, threatening even slower voucher processing and unit turnover.
If this sounds like the natural endpoint of California-style policy, that’s because it is.
Billions Spent, Crisis Worse
Portland’s tri-county region (Multnomah, Washington, and Clackamas counties) has raised more than $1.3 billion for homelessness and supportive housing since 2021 through Metro’s Supportive Housing Services tax and related measures. Yet the number of people experiencing homelessness has risen dramatically:
- The 2025 Point-in-Time count shows a 61% increase in homelessness regionwide since 2023.
- Multnomah County alone has seen about a 67% increase in its homeless population.
- A new county dashboard reported around 14,864 people homeless as of February 2025 — roughly 6,800 unsheltered and thousands more in shelters or unknown status.
Instead of bending the curve down, the spending seems to be chasing a crisis that’s outrunning it.
This is exactly what critics of the “homeless-industrial complex” have been warning about in California for years: once you build a sprawling ecosystem of tax-funded agencies and nonprofits whose budgets depend on the crisis, the incentive to actually solve it gets weaker, not stronger.
How Progressive Housing Policy Creates Empty Units
The OregonLive analysis, combined with recent audits and local reporting, paints a picture of a system where everyone gets paid — except the people stuck on the streets.
1. Bureaucratic Friction
In some Portland programs, internal reviews found that 10–15% of units sat empty because of waitlist problems: incomplete data collection, slow follow-up, applicants who can’t be reached, or people who moved on after months of silence. In at least one building serving displaced North and Northeast Portland residents, vacancy was reportedly as high as 11%.
These aren’t construction delays. The buildings exist, the units are ready — and the paperwork just sits.
For families sleeping in cars or bouncing between motels, the message is clear: the system doesn’t move at the speed of real life.
2. “Affordable” That Isn’t
Rents in many subsidized buildings are pegged to 60% of AMI, but in practice that often means studios only slightly cheaper than market-rate competitors. Meanwhile, the poorest residents — those at 0–30% of AMI — need rents hundreds of dollars lower than what these projects actually charge.
Even Portland’s nonprofit developers admit “even affordable rents are too high” for many of the people they’re supposed to serve. So the working poor double up or leave town, and the chronically homeless are pushed into a shelter system that’s overwhelmed.
California knows this story: Los Angeles voters poured billions into “affordable housing” only to watch per-unit costs approach or exceed $800,000 in some cases, while encampments remain entrenched.
3. Market-Rate Competition
In theory, subsidized units should undercut private rents by a wide margin. In today’s Portland, they often don’t.
Flat rents and rising vacancies in the private market have created thousands of market-rate units whose prices are within 10% of subsidized rents. That makes it much harder to persuade tenants to choose the heavily regulated option over a simpler apartment with fewer strings attached.
Landlords and analysts are blunt: if the rent is similar, why deal with annual recertifications, income audits, and more intrusive oversight?
California’s own markets, especially in downtown San Francisco and parts of Los Angeles, are drifting toward the same dynamic as office-to-apartment conversions and softening demand put pressure on landlords — but the regulatory maze remains.
4. Provider Strain and Misaligned Incentives
Home Forward, Portland’s main housing authority, is now facing a $35 million deficit, at least 12 layoffs, and a pause in issuing new vouchers due to federal funding cuts and local budget gaps.
At the same time, the broader homeless-services budget is under stress after years of rapid expansion and uneven performance. Metro’s $1.3 billion in revenue since 2021 has not delivered a commensurate reduction in homelessness, and counties are now cutting or reshuffling services to close nine-figure holes in their budgets.
The result: an expensive, overloaded system that can’t keep up with intake, can’t quickly match vacancies to people, and can’t admit that some of its most cherished models aren’t working.
Wilson’s “Strike Team”: Reform or Theater?
Portland’s new mayor, Keith Wilson, has tried to reframe the problem as an “activation challenge” and launched a Shelter-to-Housing Strike Team to focus on filling existing units rather than endlessly approving new projects. He’s also pushed a controversial camping ban while adding roughly 1,500 new shelter beds in 2025.
But many of those beds are underutilized; some city-run shelters reportedly operate at just 20–70% of capacity.Axios County officials have publicly clashed with Wilson, arguing that the city is throwing money at emergency shelter while neglecting long-term housing and services.
Again, California should take note. Sacramento, San Francisco, and Los Angeles are locked in similar turf wars between city, county, and state leaders over who controls shelter strategy, who pays for it, and who gets blamed when sidewalks remain lined with tents.
When everyone is in charge, no one is accountable.
Lessons for California: Stop Worshiping Unit Counts
Portland’s experience should hit home for California policymakers who keep promising to “end homelessness” with bigger bonds and more ribbon-cuttings.
A right-of-center takeaway isn’t that government should do nothing. It’s that government needs to stop paying for inputs and start paying for outcomes.
A few hard-nosed reforms California could learn from Portland’s failures:
- Tie dollars to occupancy and exits, not just construction.
- Any state or local bond that funds “affordable” units should include activation metrics: how fast units are leased, what percentage stay occupied, and how many residents exit homelessness or avoid it in the first place. If a city is sitting on a 7.4% vacancy rate in subsidized housing, new projects should be paused until it cleans up the pipeline.
- Simplify the process for tenants.
- If a market-rate landlord can approve a tenant with one or two forms, the subsidized system should aim to be just as efficient. California agencies could require standardized applications, shared verification across programs, and tech upgrades to move people from waitlist to key-in-hand in days, not months.
- Audit the “homeless-industrial complex.”
- Portland’s $1.3 billion experiment with little improvement in outcomes, and now deep budget holes, is a cautionary tale. California should aggressively audit nonprofits and agencies receiving public funds, publicly report cost-per-successful-exit from homelessness, and cut off or restructure underperforming contracts.
- Refocus subsidies on the truly poor.
- Portland’s 60% AMI projects are drifting toward middle-income housing with heavy paperwork. California should target more resources at 0–30% AMI households — those most at risk of sleeping in vehicles or on sidewalks — instead of layering subsidies over units that are effectively workforce housing with a political label.
- Let private builders build — and get out of their way.
- A big part of Portland’s problem (and California’s) is that construction costs and regulatory burdens have driven per-unit prices into the stratosphere. Sacramento could do more good by slashing red tape, streamlining approvals, and letting market-rate builders increase overall supply than by micromanaging every project in the name of “equity.”
The West Coast Fork in the Road
Portland’s affordable housing vacancy crisis should be a wake-up call for California. The city did what progressives here keep demanding: passed big bonds, raised new taxes, funded a vast web of nonprofits, and promised housing as a right.
And yet:
- Thousands more people are homeless.
- The main housing authority is facing layoffs and deficits.
- Nearly 1,900 subsidized units sit empty while tents line the sidewalks.
California doesn’t have to copy this script. But the state is heading in the same direction — fast — unless leaders are willing to question the orthodoxy that more spending and more bureaucracy automatically equal more compassion.
Portland has the buildings. It just doesn’t have a system that can get people through the door.
California can still choose differently.
California Bay News 
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