Think Out Loud

How a lack of affordable housing impacts Bend’s workforce and regional economy

By Sheraz Sadiq (OPB)
Nov. 30, 2022 6:58 p.m.

Broadcast: Thursday, Dec. 1

Ninety-five percent of employers in Bend and Central Oregon say that the high cost of housing has had either a high or moderate impact on their ability to hire workers. That’s according to a report released in November from the Bend Chamber of Commerce. The chamber hired consulting firm ECONorthwest to produce the report, which is based on surveys with over 200 regional employers working in construction, hospitality, healthcare and high tech. Two-thirds of the employers surveyed also said their revenues decreased as a result of hiring difficulties. Meanwhile, the median price of homes sold in Bend increased 75% from 2019 to the second quarter of 2022, while the pace of new construction has failed to keep up with demand. Bend Chamber of Commerce President and CEO Katy Brooks and City Councilor Megan Perkins join us to talk about the report and what’s being done to alleviate the affordable housing crisis in Bend.


Note: This transcript was created by a computer and edited by a volunteer.

Dave Miller: From the Gert Boyle studio at OPB, this is Think Out Loud. I’m Dave Miller. 95% of employers in Bend and Central Oregon said in a recent survey that the high cost of housing is impacting their ability to hire workers. Two-thirds of these employers said their revenue is down because of these hiring difficulties. That is according to a new report, commissioned by the Bend Chamber of Commerce. They have joined the chorus of housing advocates and elected leaders in saying that a lack of housing affordability has reached crisis levels. Katy Brooks is the president and CEO of the Bend Chamber of Commerce. Megan Perkins is a Bend city councilor. They both join us now to talk about this report and what can be done to increase affordable and workforce housing in Central Oregon. Welcome to Think Out Loud.

Katy Brooks, first, you write in the report that some of the issues that employers are dealing with right now are cyclical or temporary and some are structural. We can get to the structural ones in just a second, but what are the cyclical ones?

Katy Brooks: Cyclical ones have to do with what I’d say on a national scale, and certainly on a state scale, we’re seeing that it has to do with population aging out. It has to do with cyclical issues that we’ve all experienced coming out of the COVID situation, where folks have done a lot of hopping around jobs, the great resignation. It is recycling of skills-based to be more applicable to a changing marketplace. There are things that just happen with external factors and also just with the changing demographics that are cyclical in nature and take a long time to cycle through. But they do cycle through.

Miller: Do you see a light at the end of the tunnel for the issues that you’re talking about? These cyclical ones? I mean, if we stick with this division of structural, versus cyclical.

Brooks: Yes, I think there is. And over time the marketplace is changing. There will be a lot more automation, a lot of things that will change the landscape of what positions are hireable and which ones aren’t. Skill bases are changing, higher ed institutions are trying to really track what that looks like and get the workforce prepared for it. And there’s been a substantial state investment in getting [the] workforce ready, that’s future ready. That will help accommodate these issues over time with intentionality and keeping at it.

Miller: Okay, so there is some light at the end of the tunnel for that basket of issues. What do you mean by the structural issues?

Brooks: Structural issues are clear barriers to hiring and retaining employees and that really boils down to human needs: shelter, food, childcare, the ability to go to school, those really structural issues that are embedded within a community, that when they’re out of reach for a certain population become a a long-term issue that has repercussions that cannot be cycled out unless something is addressed head-on.

Miller: Megan Perkins, housing affordability or a lack of affordable housing for people at various income levels is at least a statewide and arguably a nationwide issue, certainly an issue in many different metropolitan areas. I’m curious what you see as the particularities of this issue in Central Oregon. What makes Bend, or Central Oregon as a larger region, stand out?

Megan Perkins: I wish I could say that the numbers in this report were a surprise to me, but I hear every single day from people who can’t afford to live here anymore, who have lived here all their lives, or people who can’t afford to move here with a solid job offer. What I see is affordable housing units go online and within a few hours they have waiting lists of over 100 long. Katy, correct me if I’m wrong, but I believe our home prices have gone up 75% in five years. Our median income family in Bend can afford a house that is $400,000 a year, and our median home price is around $700,000 a year.

Miller: I should point out that the number in this report is even worse than you just mentioned; that according to this report the median home price went up 75%, a flabbergasting increase, just since 2019. So just over the course of four years, an unbelievable increase.

Perkins: An unbelievable increase. And from a renter standpoint nationally I think it’s with every 10% increase in rent, we have a 13% rise in homelessness. So this is a significant problem. Another thing that happened that is pretty unique to Bend, or just a small amount of communities in our country, is we did not prepare or understand what would happen to our community during the pandemic - nor could we have - and our population skyrocketed. There was more demand for services and housing as people realized they could work remotely in this beautiful town, with abundant outdoor recreation, which was a benefit when everything else was closed. While I think we all thought that our community would start suffering from a financial aspect, it was the exact opposite.

Miller: When you say people realize that … I mean, obviously we’re talking about [that] it’s a big enough city that there is a diversity of people in terms of incomes and reasons for moving there. But give us a sense for the people who had the ability to keep their jobs and move to Bend as a kind of, “Zoom town’'.

Perkins: Yes, we are and have been a “Zoom town.” Katy, correct me if I’m wrong, but I think we have the highest, or close to the highest, percentage of workers who work remotely. I think it’s about 13% of our population, which is a pretty significant part of our population. So yes, the people that were working here were a very specific set of workers that could work remotely, or [are] self employed.

Miller: And Katy, is it too much of a generalization to say that that a lot of the people who came - if they were moving from San Francisco or New York or Boston, a small number of of even more expensive cities, or at least cities that have a high percentage of high paying jobs - that for them it was no big deal to to spend $700,000 on a house?

Brooks: That’s right. When you’re talking about a lot of the remote workforce that moved in during the pandemic, they’re definitely the upper end of home ownership as far as driving that median price up. I think we peaked at around $780,000 as that median.

Miller: Katy, I’m curious what you heard or what you noticed in the survey in terms of employers - 200 or so employers, from a variety of different sectors - what they said about the effect that the housing prices are having on their ability to hire employees?

Brooks: 91% of them surveyed said that the high cost of housing was impacting their ability to attract and even to retain current employees. And they’re doing everything they can; they’re raising wages, I think something like 82% raised wages, [or] 83%. They’re allowing people to work remotely, they’re allowing people to move out of Bend to other places in the country to work remotely because the housing is cheaper there.

Miller: The exact reverse of Bend as a “Zoom town”, in a sense.


Brooks: Yeah, it’s kind of crazy. But what we found out is these employers, 52% of them, are losing at least 5% of their revenue every year because they cannot fully hire. That’s directly attached to the affordability of housing. And of those employers, most of them are the little guys, they’re the small companies that are here in town that are most adversely affected.

Miller: Can you help us understand how it is that not paying more workers could lead to a decrease in revenue for a business owner?

Brooks: There are several ways that that manifests itself. All of us have gone into our favorite restaurant and found out that it’s closed, so it’s shortened your operational hours. It’s not being able to keep your production numbers up if you’re in the manufacturing or some sort of production industry. It’s just the inability to get the work done, because you need the people to do it.

Oftentimes the supply chains have been affected because you can’t find people to drive trucks anymore. It just goes on and on, that you actually need people to stay open and produce whatever widgets or services that you provide and that has a very big impact on the bottom line. Likewise it will have an impact on the amount of revenue that those businesses are able to bring to the state.

Miller: One of the challenges of these kinds of conversations is that the same phrase, “affordable housing”, or the phrase, “a lack of affordable housing”, can refer to many different levels of income, or prices for rent or mortgages. So, what are we talking about here? And I’d love to hear from both of you on this, but Katy Brooks first: what kinds of housing are missing in Central Oregon right now?

Brooks: All of it? The short answer. The affordability, but I’ll tell you, here’s what’s happened, Dave. We have created what once was what we used to call the middle class, that used to be able to get that first home or at least be able to live here, and they have now been relegated to a lower rung. And what that does is it puts downward pressure on everybody from that point and it will have long-term implications to those employees whose lifetime wealth is really associated with whether or not you’re a homeowner. And a whole segment of our population that used to have access to that isn’t anymore.

Miller: Megan Perkins, a few years ago, the legislature passed a bill that really was aimed at this exact issue. What it did is it got rid of single family zoning in all but the smallest Oregon cities, meaning that developers could build a more varied mix of housing options in a single lot: duplexes, triplexes, clusters of small homes. And it said, every city you have to change your zoning to no longer not allow these kinds of different housing options. It’s early still, but has this led to a change in Bend?

Perkins: Bend, we were the first large city to actually come into compliance with HB2001 (House Bill 2001). We embraced it and saw the need for it. This middle-income type of housing in our communities. I think one of things that we’re seeing and the shift that we’re seeing in our community, which is a really good sign, is that for the first time we have more multi-family, apartment-unit townhomes that are in development or in planning than single family. And I think that by definition, many of these units are going to be more affordable than buying or renting a single family home. And it means that developers are listening to the needs of the people who live here in Bend. So I think that’s a really positive sign. I do a lot of driving around our city. I have three active kids and let me tell you, there are developments going up in every single corner of our city and most of the ones that I see going up are these multi-family, these townhomes. We are all listening to the needs of our city, it just is often a slow process.

Miller: Do you think that the number of new units you’re seeing right now are enough to actually change the basic supply and demand equation anytime soon?

Perkins: No. At last count, and this was in 2019, our community was 3,600 units under production and I’m sure that that number has skyrocketed with our population increases. The prevailing wisdom is production, production, production, production, we need to produce as many units or houses as we can to meet the needs of our growing city.

Miller: Katy, the report that your chamber commissioned found that nearly half of the regional employers who were surveyed considered quote, “direct housing interventions”, themselves. What does it mean? What’s a direct housing intervention that an employer could put forward?

Brooks: There’s several things that you can do as an employer. Some of them have actually looked at building employee housing on their company land. You can also provide subsidies. There are a lot of employers also exploring some avenues of what they call “deed restriction.” What that looks like is an employer can help offset costs, set aside a piece of land that has a restriction on it, that somebody that works in Bend has access to ownership of that property over time, and that gets passed on from owner to owner to owner. There are several programs in place, including a core community land trust, something that we’re looking into, that is working directly with employers on this. There are also other builders of multi-unit complexes that are working with multiple employers who want to invest in these types of employee housing on a collective basis, but don’t want to manage it over time.

There are new models of folks that are doing this on a national scale, that work directly with employers just to figure out how to set aside housing for their employees in exchange for being investors in the actual project. There are lots of experiments going on right now as times get desperate.

Miller: Whether it’s buying rental units or land for residential development, none of that sounds cheap. What would the reason for an employer be to do that? As opposed to, say, just increasing wages even more. In other words, they’re going to have to spend money one way or another, it seems, at least that’s a version of a near term solution. Why not keep it simple and just increase wages even more?

Brooks: And the answer to that is the gap’s too big. The gap between what the median income is, is around $60,000 in the Bend [and] Redmond area. A house costs $400,000. There’s just no way you can give somebody enough of a wage to have the ability to afford a house. Even rental property/rent is high. What you can do though is you can invest in actual projects, accrue equity over time, and at the very least accrue some sort of assurance that you have a place for your folks to live. In some cases it’s just more solid of an investment and gets you the result that you need, which is a place for somebody to live rather than trying desperately to make up that wage gap that seems to be just crawling up and out of control. It’s taking control of the asset, which is the house, the living space, rather than trying to make up for something that’s just so huge you couldn’t even begin to match it.

Miller: Katy Brooks, is this report that your chamber commissioned on behalf of your members, is this now sort of buttressing a change in arguments that business people in Oregon are prepared to make to lawmakers, a different approach to lobbying?

Brooks: I think the approach to lobbying is to convey how desperate this is getting and that some creativity needs to be instigated into legislation. Refocusing legislation from land use constraints - which is important, Oregon’s land use laws were put in place for a reason - but changing that focus from constraining to assessing by region and by municipality area; what are your housing needs and what incentives, reducing barriers, what is it that we can do that actually increases the inventory by the need of the region? That’s what the state needs to start looking at, rather than placing more restrictions, because cities need help. You ask Bend, you ask Redmond, you ask any of the cities in Central Oregon and they’re desperate for help to figure out how to get that inventory up, because we are far, far behind.

Miller: Megan Perkins, just briefly, before we say goodbye. Katy Brooks was talking about statewide legislative lobbying and statewide land use laws. What do you see as the levers of power that you have at the City Council to actually affect meaningful change?

Perkins: We have been very active in getting as much affordable housing out there as we can. We were the first city in Oregon to have an affordable housing fee, to fund affordable housing development. We are right now hiring a housing staff member that will work specifically on middle income housing and making sure that that is a priority for our city. We continue to wave system development charges for the construction of affordable housing units and daycare facilities.

I think that we see a lot of areas of alignment with the chamber and I think that we definitely agree that we need to continue to push our legislative delegation together on a state level, because the fact of the matter is we don’t build housing as a city. We partner, we subsidize, but we don’t actually build the housing and so we need to continue to build these partnerships and bring developers to the table and work with them, to determine how we can help them build these developments that are considered lower or middle income developments.

Miller: Megan Perkins and Katy Brooks, thanks very much. Megan Perkins is a member of the Bend City Council. Katy Brooks is the CEO and president of the Bend Chamber of Commerce.

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