Housing pressure | The Source Weekly - Bend, Oregon

Housing pressure

Why there is no immediate solution to the Bend housing crisis

Bend's housing crisis isn't a new problem. If you aren't looking for a new place yourself, chances are you know someone who is. And this isn't likely to change anytime soon. The solutions offered by some Bend City Councilors to address housing affordability and availability are not going to provide relief in the short term. Sifting through limited housing options advertised on websites like Craigslist can feel like a reoccurring nightmare, but it's a reality for many Bendites for the forseeable future.

On a larger scale, a new Urban Growth Boundary has been preliminarily approved, which is set to make more land available for development and help encourage more efficient use of land within Bend. But this is a problem Bend has been trying to solve for a decade. City Councilor Nathan Boddie says the UGB expansion was rejected by the state in 2005 and Council has come up with a responsible solution allowing the City to grow up and not out.

Bend's Affordable Housing Manager Jim Long says people are moving in at a higher rate, but the City is still recovering from a lack of housing inventory.

"During the economic downturn Bend's population kept growing, but we stopped building," he says. There wasn't "a single, multifamily permit issued."

A stark reality

Everyone seems to have a story about the impacts of that shortage.

City Councilor Victor Chudowsky says he knows a guy who runs a sign company whose 27 employees can't afford to live in Bend. So like many others, they commute from the surrounding areas like Redmond, Prineville, and Sisters. But even those options aren't necessarily more affordable as rental prices on Trulia and rent.com advertise housing prices that resemble Bend's.

City Councilor Barb Campbell owns a small business and says one of her employees is couch surfing. So when all of these stories and factors are woven together, it replicates a massive intertwined dilemma illustrating just how bad the housing crisis is.

"How many words for bad do we have?" asks Campbell. "Crisis does not [overstate] the problem that we have with affordable housing right now—we have an effective rate of zero percent vacancy," she says.

The three Councilors agree that there are problems with available affordable housing—what they define as government subsidized housing—and workforce housing like apartment buildings, cottages, or multifamily homes. For example, a quick search on the GoSection8 website shows one available rental in Bend. Now factor in the average price of a single family home—Chudowsky says it's around $350,000—and there's yet another piece to a complicated puzzle that can't be put together.

Bend's Affordable Housing Manager Jim Long doesn't agree with these definitions of affordable housing.

"Everybody lives in subsidize housing," he says. "If you own your house or if you're buying, you write off your interest in your taxes—that's a government subsidy," he says. He's passionate about his work and says that City Council is working hard to solve the problem.

Right now, there are two property management company that manage eight reduced-rate apartments. But their waiting lists are closed. A separate search for market-rate housing, brought up properties in Prineville, Bend, and Redmond with one studio apartment available and a few apartments under $1,000 per month. The rest of the listings are single-family homes renting for $1,095 to $2,800. And even if a few people want to split those housing rental prices, with most property management companies, all tenants who want to sign onto a lease have to financially qualify and pass credit checks.

"Now every person in there has to have met the credit checks, the background checks, so unless you yourself have enough money to be able to rent an entire house and then find those individuals, that kind of thing just can't happen anymore," says Campbell. Another option like Craigslist, in addition to common sense concerns, has created another competitive market. For example, after calling about a small two bedroom, one bath home with a for rent sign, I learned that the owner was looking for a couple because the bathroom is only accessible by walking through one bedroom and the price is $1150 per month.

Baby steps toward a solution

While City Councilors believe no step is too small to alleviate the crisis, Chudowsky mentions that he is not in favor of a rent- control option.

"The consensus among housing economists is that rent control in the long run restricts your supply of housing overall," he says. "Because it provides less incentive to develop housing, and not only to develop housing but to maintain that housing that we have."

Another measure brought up by Councilor Campbell during the City's last meeting was 90-day rental increase and no-cause eviction notice—which would replace a state mandated 30-day notice.

"When I first brought it up, I was hoping it might be something we could approve in a meeting that evening," she says. Because a similar notice passed in Portland, she says the City is keeping an eye on how it works. "In our climate in the winter, this a question of life and death for many people if we can find housing for them. Just giving them that notice so they have more time to try and find a new place it seems to me to be the very least that we can and should do."

But this effort doesn't make more housing available, and Chudowsky says it may have an adverse effect.

"If you're a landlord, you have to make decisions about how much to raise rents," he says, "and the farther away that date is from when the lease ends, [it] seems to me that would be more of an incentive to raise rates."

However, Bend City Council has approved a list of efficiency measures—or incentives for developers—and several affordable housing-related building proposals are set to be heard at the next council meeting.

"So the efficiency measures we put into place are mostly in the form of Bend City bonuses and what that means, for example, is we have a height restriction of 35 feet—three stories—so if you wanted to build a four-story building, we will let you do it if the fourth story is affordable housing," Campbell says. "[A]s long as the equivalent of a quarter of that project is affordable housing, then we allow them to build higher—which means they are able to recoup their costs for that project and it's just a win, win for everybody."

Council also approved an exemption for system development charges (SDCs)—which are new development fees (that include water, sewer, and street) paid for by any new house or building. "So we don't charge affordable housing projects these SDCs," says Boddie. "It doesn't make a huge impact, but it makes a project that would almost be buildable get over that last hurdle."

Chudowsky says Oregon's SDC fees are high because it's expensive to expand the sewer system.

"There have been a lot of instances we've heard through the grapevine of people wanting to do apartment buildings, and when they factor in SCDs, those don't pencil out," he says. "Essentially it's impossible right now to build an apartment building at the market rate—and those rates are low—and the SDCs are the biggest factor that make it too high."

But Campbell says the SDCs exemptions are becoming attractive even to private developers.

"The entire project is maybe three dozen units and then of that this developer is hoping to do a few that are affordable," she explains, "and this is someone who has been building market- rate housing his entire career as a developer and thanks to this incentive has now said, 'You know, I will be able to build affordable housing.'"

Other incentives approved by Council include the density bonus—which encourages developers to build up and closer together—and changes that were made to the cottage code and accessory dwelling units. Campbell says you can build smaller single-family homes on one lot if one of the homes is affordable. Accessory dwelling units—or ADUs—can now be larger in order to accommodate someone turning their garage or shed into an apartment, says Campbell.

The waiting game

But all of these new proposed incentivesto bring development take time. Jim Long says nothing can be done in the next 30 days, and this problem creates frustration among City Councilors.

"I think there are a lot of people that are confronted by near homelessness, and we have a lot of people that are outright housing impacted," says Boddie. "[It's] a huge amount of economic stress and a lot of people are hanging on by their fingernails."

Chudowsky says, "The bottom line is there's no one grand solution, there's no magic bullet."

However, the housing crisis is challenging people to reexamine what is considered traditional housing. The idea of tiny houses is popular among City Councilors, but the City would need to make changes to lot sizes that are for sale because Councilor Campbell says they are still big and still expensive.

"The mayor would like to see a cluster of tiny homes and so would I," Campbell says.

"I think they're cool," Boddie adds.

Oregon is also one of two states—Texas is the other—without inclusionary zoning.

"That would be where we could honestly require some developers to include affordable housing in their projects," says Campbell. She also said she lobbied for inclusionary zoning during the last legislative session and in the meantime says there is a way to implement it at the city level. "There is a mechanism, there is a way; it is legal." Boddie agrees saying, "I would like to see the state repeal the inclusionary zoning prohibition."

Chudowsky doesn't share the same opinion, saying an inclusionary zoning study showed the approach can increase the cost of housing overall.

"It had a distorting effect on the entire housing market to make it such that if you were a person that did not get this subsidize house or apartment, you ended up paying more so it's kind of like shifting the cost onto other people," Chudowsky says.

He thinks the bigger problem in Oregon is economic disparity.

"This affordable housing crisis is going on at the state level—it's just more acute here," he says. "Oregon—even though the economy is growing, the percentage of people who are at the poverty line keeps growing as well. I don't know what the answer is, but certainly anything we can do to attract employers—it's clearly a huge problem."

Boddie believes there is another way to create, but not mandate, an inclusionary zone by way of the City's annexation policy that would force developers to compete for new land.

"We can only ask nicely for someone to build more affordable types of houses," he says. "When a piece of land is being considered for annexation for coming into the city, that's kind of the one moment in time when we actually do have leverage to have a beauty pageant—how much affordable housing, how much workforce housing would you be willing to put in your development to encourage us to annex you into the city?"

One code that is unique to Bend is the City's affordable housing fee. Jim Long says it should be permanent and so far the City has collected $5 million.

Councilor Boddie explains, "Like an SDC, developers get charged a small fee, it's very minor, but it goes into our affordable housing fund—which we then use to subsidize these affordable housing projects."

Long believes the Bend City Council is sympathetic and aggressive with regards to housing, but in order to get Bend back on track the City needs to "take every single tool we have and implement them wisely, expand on tolls, convince the Council that we need to go higher because we can't go over five stories. People in Bend are afraid of heights."

But despite the impact of economic disparities on the housing crisis, Councilor Boddie says the problem reaches people across the income spectrum.

"The fire department is having trouble finding places for fire fighters—it's not just sort of a lower-income homelessness issues, but we have that challenge as well," he says. "I think that the more we raise the alarm that this is a real threat to our town like any other wildfire, earthquake, or economic collapse, this a real threat to Bend, and we have to treat it like that."

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