Despite all the new residential units being constructed in Portland, the vacancy rate actually dropped below 3% and rising rents have prolonged the apartment boom with 9,000 units under construction and close to 21,000 more units proposed according to the Barry Apartment Construction Report from Fall 2015.
While in the past this would level out rents and move vacancy up a few points the demand is still stronger than the pace of construction. The housing crisis sparked the passing of new rental rules including 90 day notices for no cause evictions and rent
increases beyond the normal cost of living expenses. There are fears among landlords and owners that there will be continued restrictions of how properties and leases are managed in Portland. Apartment cap rates have also dropped and rising rents are increasing apartment prices as well. Market cap rates are now around the 5.5% mark. Institutional investors such as REITs (Real Estate Investment Trusts), insurance companies, and retirement funds are now actively buying in Portland which is promoting the scaling up of buildings from 10-20 units to buildings with 100’s of units.