A shortage of housing in Bend doesn’t just impact working people. Employers are increasingly having a hard time attracting employees who make their businesses run and grow.
If you’re a business in Bend, you’ve likely experienced the impact of the labor shortage. Central Oregon leads the state in employment growth, reaching about 4.4 % in 2019, according to the Oregon Employment Department. This rapid growth coupled with a 4 % or less unemployment rate makes it a challenge to find and keep employees. The lack of housing — especially affordable housing — magnifies the problem as people working or wanting to work in Bend have difficulty finding a place to live. As a result, many employers can’t keep employees or fill open positions.
This labor shortage, exacerbated by housing costs, is having a significant impact on our economy. In 2019, Oregon began to experience economic slowing in large part due to labor supply constraints rather than economic weakness, according to the State of Oregon Office of Economic Analysis. While Oregon’s median household income has grown substantially as employers have increased wages and Bend has diversified and strengthened its economy, it’s not enough.
The gap between income and housing costs in Bend is widening as housing prices outpace wage growth. Central Oregon economist Damon Runberg says that Bend is the second -least affordable housing market in the state (just behind Hood River), with housing costs eating up 40 % of the average monthly wage. Home prices have risen 16 % since the Great Recession compared to an increase in wages of about 10 %. This hits those around median household income and below the hardest, and they represent well over half the people who work for Bend businesses.
Why can’t so many people become homeowners in Bend? Runberg put together a scenario to help describe why it is so challenging.
His example includes a two-income family with one child. One member is a fitness instructor and the other a machinist, making a combined $73,500 per year. One might expect that they are doing well, but the cost of living and high down payment costs for a home makes ownership close to impossible. They will pay $13,000 in child care, $10,425 for transportation, $13,089 in taxes, $10,529 for food, $11,580 for housing, $6,057 in medical and $6,256 in miscellaneous expenses, leaving an annual net of just $1,400.
Even with mortgage interest rates staying low to aid with monthly installments, it’s impossible to save enough for a down payment.
There is no easy fix to Bend’s housing woes. Fortunately, for employers and employees alike there is help underway with increased construction of new conventional houses, apartments and other auxiliary or multifamily units. The city of Bend has set a goal of 3,000 new homes in two years. The city is also committed to adding 100 new affordable units per year. Although these efforts will help provide some short-term relief, alone they don’t come close to creating the needed housing.
The necessity for more housing is also inspiring innovation from the private sector. There are businesses that manufacture auxiliary dwelling units to be placed on properties and financing companies that provide down-payment loans on home equity over time to allow people to have enough money to purchase a home. Small cottage or dorm-style housing projects are in the mix, and other endeavors are under way to close the housing gap. If properly implemented, these efforts can be the lowest -cost, fastest way to get our housing inventory up while retaining the culture and livability of our community.
The need for our labor force to find housing applies to both longtime residents and those new to our community. People are choosing to live here, and our employers, as well as the rest of us, need them. The ability of those who work here to also live here as our neighbor is part and parcel of a thriving community. We need to use multiple tools and a lot of intentionality, stamina and creativity to figure out how to house them. We can do this by supporting the construction of new homes and more density in areas that can support the innovative placement of additional types of housing options. This is win-win-win : Employers can better keep and attract workers, people can find a place to call home and Bend continues to be an economically diverse place to work, live and play.