In '02, an estimated 30 percent of Bend's population was in need of affordable housing. To meet the demand, city leaders created an Affordable Housing Task Force in 2001. Here, we profiled the progress of what continues to be a major issue plaguing Central Oregon.
hile Bend is growing along with all of Central Oregon, and a housing boom is part of that growth, a larger and larger segment of the population is priced out of living in this city. The threat of "becoming another Aspen" is looming large as middle and low income workers, the disabled and seniors move to Redmond and Madras. Others are living in sub-standard conditions, homeless or running the risk of becoming so. There are several agencies in Central Oregon that have been working for years to help people find affordable housing in Bend and other cities. Now Bend is taking new steps to encourage the development of affordable housing.
The city adopted affordable housing as a goal for 2001 and 2002 and created the Affordable Housing Task Force in April of 2001. It includes representatives from building, banking, government and social services agencies. The task force worked for several months to prepare a report on the issue, which was presented to the council in December of 2001. The task force continued meeting and this May held a summit on affordable housing that was hosted by the city and supported by several sponsors. The summit's focus was creating a set of strategies that could help the city and developers partner together to get more units built that middle and low income residents could afford. The event featured speakers from Central Oregon and from Portland, Eugene and Fort Collins, Colorado. The summit's main organizer was Bend City Councilor Bruce Abernethy. Abernethy also works with the Affordable Housing Task Force and is the Bend Advocate for the Central Oregon Partnership, a new non-profit working to break the cycle of poverty in the region. Now two months later, people with the city and developers of affordable and standard housing say change has begun.
How we got here—the numbers
Income inequality has been rising in Oregon since the 1970s and, according to the Center on Budget and Policy Priorities, Oregon ranks among the top ten states with the greatest disparity between rich and poor. According to census data compiled by the Central Oregon Partnership, the poorest fifth of Oregonians have seen their inflation-adjusted income drop three percent from the late seventies to the late nineties. The middle fifth have seen theirs grow almost ten percent. The richest fifth have seen theirs grow by fifty percent. Between the late eighties and the late nineties, the change has been an income drop of over six percent for the poorest fifth, a seven percent increase for the middle, and an almost 34 percent increase for the richest fifth.
At the same time, the cost of housing has been increasing. Between 1998 and 2000 and Bend, the median sale price of a single family home rose 34%, and rental rates for two bedroom units rose 16%. Over the same period the median income for a family of four rose only 10%, from $40,300 to $44,200. In COCAAN's Year 2002 Deschutes Housing Survey, the organization found 217 homeless households in Deschutes County and 475 households at risk. COCAAN defines a household at risk if the family's income is less than 125% of the poverty level or if they paid more than 30% of their income on rent or mortgage. The task force's report points out that the special needs population—including the elderly, disabled, and chronically mentally ill—are hit the hardest by the lack of affordable housing. Over 50% of special needs responders to the 2000 Central Oregon Housing Needs Assessment spent more than a third of their income on housing.
At the same time the pinch is being felt among many low and middle income families. Bend's Affordable Housing Task Force report "Building Our Future—The Need for More Affordable Housing" points out the way purchasing power is being hurt by the income and housing price trends. "Not too surprisingly," says the report, "the cost of the 'typical' house in Bend is becoming less and less affordable to the 'typical' household. To put it another way, it is becoming more and more difficult for low and even moderate income households to find (affordable) housing in Bend." Bend Area Habitat for Humanity says recent data show 30% of Bend residents in need of affordable housing. Abernethy underscored this last point when he presented the report of the Affordable Housing Task Force to the city council. He emphasized "them is us." Abernethy pointed out that people priced out of Bend included first-year teachers and firefighters.
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- Bruce Abernathy who currently sits on the Bend City Council has been championing for affordable housing issues for many years.
How to change the pattern—the strategiesT
he Affordable Housing Task Force developed three over-arching strategies for dealing with the problem: increasing affordable housing stock, increasing the dollars in the hands of people who would like to buy, and increasing awareness around the issue/decreasing NIMBYism about affordable housing projects. Those who were at the summit as speaker and participants have very strong praise for the event and Abernethy in terms of that strategy. According to Mayor Bill Friedman, Abernethy's efforts give a high probability that results will happen from the conference, which he called "remarkable" and "much more than I expected." John MacInnis, Director of Cascade Community Development—a non-profit builder of housing for special needs residents spoke at the summit. MacInnis, who is also on the task force, says the event was the best thing that's happened in the 15 years he's been working in Bend.
In terms of increasing affordable housing stock, there are several ideas that summit participants mention as being helpful. One possible strategy is that the city could be more flexible on density and other zoning issues in projects that include affordable housing. Another is that System Development Charges (SDCs) would be phased in over several years instead of being due up front. A third is that non-profits would match people with the affordable units so developers would know they would sell right away. Here Abernethy says the trade off is less profit in return for less risk. Community Development Director McMahon, who spoke at the summit and works with the task force, says one idea discussed at the conference—that the city prioritize projects that include affordable units—was instituted the day after the summit.
Another idea that participants are enthusiastic about is the idea of a regional land trust. Abernethy says within weeks the entity will be in existence. The purpose of a land trust, according to a task force report, is to, "acquire and hold land for the benefit of a community and provide affordable access to land and housing for community residents... The land is held permanently—never sold—so that it can always be used in the community's best interest. The land trust essentially removes the land from "market" forces.
Into this land trust can be donated property or money for the acquisition of additional property. Abernethy explains that one incentive for developers could be that if they donated some lots from a project into the land trust, their whole development would be deemed affordable housing and thus eligible for flexibility on zoning rules. Chuck Tucker, Director of Bend Area Habitat for Humanity, indicates in an email interview that the land trust would be very helpful to non-profit developers as well. "Were it not for the challenge of land acquisition," writes Tucker, "Bend Area Habitat has the capacity to build ten houses per year." Tucker also says that not only was the idea of deferring SDC payments for affordable housing projects of interest at the conference, but so was the idea of reducing or removing them altogether.
Because of its population, Bend is now also eligible for Community Development Block Grants from the federal government, which can be used to purchase land or for other efforts toward creating affordable housing. Abernethy points out that a bond could be floated with the expectation that it will be repaid by the grants, which he says is similar to what the Park and Recreation Board is considering. Abernethy says many of these approaches, besides the donation of land or money to the land trust, will not cost the city real dollars. He points out, however, that most if not all of them could be controversial. Two other strong desires on the part of participants at the conference are that affordable housing be mixed in with other housing whenever possible and that houses built with affordable housing subsidies, land, or other resources be kept affordable. One presenter at the conference spoke about Share Appreciation Mortgages (SAMs), where the first homeowner has to share the profits of the sale of the home with the city and the land trust, for example, so some money can go to more affordable housing projects. Friedman says this recycling of the benefits will help developers get involved. "If they can see this as helping to provide long-term solutions," says Friedman, "I think the buy-in will be large." Developer Mike Tennant agrees, encouraged by how SAMs could help an affordable housing program grow itself. "This thing could mushroom over time," says Tennant, who also likes how SAM houses on land trust property are a sustainable way that the larger community, not just developers, can support affordable housing.
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Friedman says that Bend should also consider its job base and the effect it has on housing affordability. "We don't have light industry in this town," says Friedman, who says light industry jobs would give more people the ability to afford some of the housing that exists already and warns that Bend could "end up being so pristine that nobody can live here." If the city can create those jobs, says Friedman, "we're attacking affordable housing in the same way as creating more affordable housing."
When will this all happen—the timelineM
ost of the strategies are just ideas at this point. They have not been implemented. Abernethy and Friedman both expect to see ideas on how to implement them coming from the city over the next couple months. The land trust is about to come into creation, however, and some incentives for developers are in place. There are ways to finance SDCs with the city already, and staff did begin prioritizing projects containing affordable units the day after the conference. "People didn't think we were really going to do that," says McMahon, "but we have done that."
According to Tucker, that strategy may not be as developed as it could be. He describes seeing "some progress in that area." The city has also budgeted a full time affordable housing ombudsman, with information on what the city can and can not do, and referrals for additional resources. McMahon says she expects the job to be filled within the quarter. Tennant says he feels that is a very important step. He notes a speaker from the conference, Richie Weinman, who does a similar job for the city of Eugene. Says Tennant, "you need someone like (Weinman) to put it all together." Overall McMahon says the city is poised to help with the problem. "I think we have the right momentum to take this issue forward," says McMahon, "and because of the regional nature of the issue it requires a focus by not just the city but our neighboring cities and communities." Abernethy points out that many of the strategies would involve only administrative changes—they are not issues the council would need to vote on. He says he and the task force could not have made it this far were he not on staff with the Partnership to address poverty issues. "I think it was absolutely critical," says Abernethy, "I think it's a perfect example of what I hoped would happen when I accepted the job (with the Partnership) because it allowed me to move on an issue that's important to the Partnership through channels (where) I had a higher level of access."
While many are pleased with the efforts on affordable housing so far, Abernethy says not everyone is excited about his approach. "To some low income housing advocates, I'm not aggressive enough," says Abernethy. "I have made the decision that if you're too far out you get dismissed and you're not effective."
While Friedman is enthusiastic about the efforts to tackle the problem, he warns against thinking that the strategies comprise a solution. Says Friedman, "This is not going to solve the housing problem," who says that the more affordable housing that is created, the more people will be attracted to Bend and in part because of the affordable housing. Abernethy notes that he does not use the word "solve" either, but for a different reason. Looking at fixing the whole problem is too overwhelming, says Abernethy, but the city is beginning to attack it in relative terms. Says Abernethy, "I'm saying we can do more than we're doing right now, we can do a lot more than we're doing right now."