Politicians in Oregon have complained about the high cost of rental prices for a long time.

In 2015, Portland declared a “housing emergency.”

In 2016, former Portland Mayor Ted Wheeler made rising rents a central theme of his campaign. The following year, Portland adopted an “inclusionary” housing policy mandating developers keep 20% of a building’s units affordable to people making 80% or less of the region’s median income.

In 2019, then-Governor Kate Brown signed the first statewide rent control law, SB 608. Brown promised that law would “provide immediate relief to renters struggling to keep up with the rising rents in a tight rental market.”

In 2023, Gov.  Tina Kotek, further tightened restrictions on landlords when she signed SB 611 into effect, increasing the motivation for smaller independent landlords to get rid of their rentals and call it quits.

In early 2024, the average rent in the Rose City was estimated at about $1,800 a month. From 2020 to 2024, rents increased by 21%, and continue to rise despite emergency declarations, rent control, and other mandates.

None of these government interventions have helped stabilize the housing market, and the latest heavy-handed proposal won’t either.

A newly proposed ordinance before the Portland City Council would ban the use of artificial intelligence (AI) software in helping to determine rental prices. The proposal is short-sighted and displays a stunning lack of understanding about how AI functions. Should this ordinance be adopted, it will become yet another casualty on the long list of failed proposals that do nothing to protect landlords or tenants.

Algorithmic pricing software does not increase market prices; it just reports on conditions using available data. The software analyzes vacancy information, demand, and comparable rental prices to help suggest a fair market rate; it does not, as opponents suggest, drive up prices or control the overall rental market.

Housing prices are high in Oregon today because not enough homes are built within the city limits to meet demand. High rent stems from the reality of certain basic economic principles at work in Oregon, not interference from AI software.

The City of Portland found in a recent audit of its building permit process that the system is slow, cumbersome, inconsistent, and expensive — triggering ongoing efforts to streamline it. In many cases, residential building permits can take 100 days or better.

Portland’s Urban Growth Boundary, which limits the amount of space that can be developed, naturally also limits the amount of housing that can be built. At the same time, Portland’s population is again increasing.

Price increases come from demand outpacing supply and that is exactly what is happening in Oregon. A study by ECONorthwest, a real estate consulting firm, found Portland and the surrounding region are hemorrhaging rental properties.

“The loss of the detached rental stock is widespread across the region, with 90% of tracts having fewer units today than in 2014,” their report read. “The number of units lost was more heavily concentrated in neighborhoods with lower home prices across the region.”

That trend continued in 2024. A recent analysis found that builders must add about 120,000 housing units in Portland to address the crisis. No wonder prices are high! When potential tenants are willing to pay more for their chance at getting a precious remaining unit, the effect can be a future listing price hike across the board. In this situation, AI-created suggestions may actually serve to lower listed prices, reducing the bidding-war effect.

Proposing to outlaw pricing software is tantamount to outlawing eyeglasses to ensure better vision. It is another misguided “fix” that will allow the real causes to fester unchecked and unaddressed. After all, artificial intelligence was still something out of science fiction movies when Oregon first termed the housing situation an emergency.

If Oregon’s leaders truly want to help tenants, they must shift focus away from punishing landlords to incentivizing new housing construction and development. Without more homes, no amount of regulation will bring relief. It’s time to stop chasing quick fixes and start building a real solution.

Kerry McQuisten

Former Baker City mayor, 2022 Republican gubernatorial candidate