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About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (May 26, 2016)
3A THE DAILY ASTORIAN • THURSDAY, MAY 26, 2016 Multiple factors drive housing costs Lack of supply pushes prices higher “Who moves to Oregon? The short answer is every- one moves to Oregon,” Leh- ner said. By PARIS ACHEN Capital Bureau In the past year, the state has attracted more newcom- ers than it had any year in the past two decades. About 30 new households move to the state or are formed in the state every day. Meanwhile, the state’s stock of affordable housing has failed to keep pace. Portland is a year behind in building new units to keep up with population growth. The city needed 23,000 more units than were built between 2006 and 2015. That combina- tion has yielded the ifth low- est vacancy rate among the 100 largest metro areas in the nation, Lehner said. The economist said he doesn’t know why the city lagged behind in building units. “Coming out of the Great Recession, I know inancing was very, very hard for build- ers to obtain,” Lehner said. “Some analysts like to point out that demand increases much faster than supply can, given how long it takes to build housing.” New construction doesn’t necessarily equate to afford- able housing. Much of the new A conluence of factors — including low supply, high demand, obstructive regula- tions and inadequate infra- structure — are driving up housing prices in Oregon, a panel of state economists and housing experts told a legisla- tive committee. “There are too few units given the strong and growing demand,” said Josh Lehner, economist with the Oregon Ofice of Economic Analysis. “In such a market, anything available at a remotely rea- sonable price and/or location is gone instantaneously. The lack of supply drives prices higher.” Panelists on Tuesday rec- ommended a series of policy changes, many of which lay outside the Legislature’s con- trol. Local zoning laws, per- mitting rules and even the state labor commissioner’s interpre- tation of prevailing wage law for residential construction projects can drive up the cost and time it takes to build units, said Kurt Creager, director of Portland Housing Bureau. More newcomers construction is more expensive than existing housing, said Mike Wilkerson, senior econo- mist with ECONorthwest. The median monthly rent in Portland is $1,200. In order to afford that, you’ll need to earn 113 percent of median income, Wilkerson said. If the unit was built after 2007, that price climbs to $1,750. Nearly 54 percent of Portland renters are paying at least 30 percent of their income toward rent, according to Lehner’s analysis of census igures. Construction and labor costs Increased demand for con- struction work has driven up the bids contractors make on projects by up to 20 percent, Wilkerson said. The state labor commis- sioner’s rulings on prevailing wage also can drive up build- ing costs, Creager said. One is example is the Yards at Union Station, a 1,200- unit development built in ive phases in downtown Port- land. For the irst two phases, the developers were required to pay the residential wage to workers on the project. After Labor Commissioner Brad Avakian took ofice, he ruled the inal three stages — which were identical to the irst — demanded a commer- cial wage, because 20 percent ‘Who moves to Oregon? The short answer is everyone moves to Oregon.’ Josh Lehner economist, Oregon Office of Economic Analysis of the development had com- mercial features. The other 80 percent of the project was resi- dential. That decision drove up labor costs for the project by 25 percent, Creager said. A solution to help rein in those labor costs is to apply a split wage rate to such proj- ects, he said. Zoning limits Local zoning laws limit where developers can build multifamily units, and there are few areas where build- ing multifamily units is via- ble because of the high cost of installing infrastructure, Wilk- erson said. Panelists recommended easing limits on density and prohibitions on duplexes, triplexes and garden-style apartments in single-family neighborhoods. Decreasing restrictions on construction of condos and prefabricated and modular homes also could help increase affordable hous- ing capacity. Secondly, Wilkerson said, low-income housing cred- its need to be targeted geo- graphically where the greatest need is, which is not happen- ing now. Creager, of the Portland Housing Bureau, said even something as simple as includ- ing cost control into the charge of a city’s design review com- mission might help remove obstacles for developers. The panelists presented Tuesday to lawmakers on the House Committee on Human Services and Housing. Law- makers had requested the information to help give them more insight on the drivers of the state’s hous- ing crisis and ideas for pro- posed legislation in 2017 to improve the situation, said state Rep. Alyssa Keny- Guyer, D-Portland, the com- mittee’s chairwoman. A priority Gov. Kate Brown has said augmenting the state’s affordable housing supply is one of her priorities, but it is unclear how much the Legislature can do to ease the crisis, given the market drivers. “Housing is fundamen- tally a matter our society has consigned to the private sec- tor, and government at all levels really only tinkers on the margins of that sector,” said Margaret Van Vliet, director of Oregon Housing and Community Services. Last session, lawmak- ers passed legislation to end the state’s 17-year ban on requiring developers to include affordable housing in their plans, a measure to prohibit rent increases in the first year of a month-to- month tenancy and increase notice for rent increases from 30 to 90 days, a pilot affordable housing pro- gram for smaller communi- ties and a measure to allow annexations without going to the people for a vote. The Legislature also poured millions of dollars into emergency and home- less housing assistance, foreclosure counseling and other programs designed to keep people in their homes. The Capital Bureau is a collaboration between EO Media Group and Pamplin Media Group. Oregon Senate conirms Oregon’s irst resiliency oficer renews wildire insurance policy By PARIS ACHEN Capital Bureau By PARIS ACHEN Capital Bureau SALEM — Oregon ofi- cials and forestland owners have renewed the state’s wild- ire insurance despite failing to reach the policy’s $50 million deductible last year. The price of the premium declined by $300,000 to $3.45 million in 2016, according to the state Department of Forestry. Underwriters gave the discount because state did not need to use the policy in 2015, said state Sen. Alan Bates, D-Ashland. The $25 million policy is underwritten by Lloyd’s, a London insurance consortium, and AXIS of Bermuda. Federal and state agencies spent $94.4 million on wildire suppression in 2015, accord- ing to the Legislative Fiscal Ofice. Only about $30 million of that, however, was counted toward the state’s wildire insurance deductible. A committee of public and private forestland owners voted in March to renew the policy. That committee typ- ically pays 50 percent of the premium but could only pay 11 percent this year because state law limits how much it can spend ire suppression. It has already hit that $13.5 million threshold, leaving the state to make up the difference of nearly $1.4 million. SALEM — The Oregon Senate on Wednesday unani- mously conirmed Gov. Kate Brown’s nominee for the state’s irst resiliency oficer to develop plans for respond- ing to a major earthquake. Michael Harryman is the former director of emergency operations for Oregon Health Authority’s Public Health Division. “I am honored that the governor has nominated me for this important position,” Harryman said during a hearing Monday of the Sen- ate Committee on Rules and Executive Appointments. Harryman is charged with “directing, implement- ing, and coordinating seis- mic safety and resilience goal-setting, which includes working with state agencies to improve Oregon’s seis- mic safety and resilience,” according to a statement from Brown’s ofice. One of Harryman’s irst tasks is to participate in the regional earthquake preparation exercise, Cascadia Rising, June 7 to June 10. The event is intended to pre- pare the Paciic Northwest to coordinate a response to a Cas- cadia Subduction Zone earth- quake and tsunami. Participants include state and local agen- cies from Oregon, Washing- ton state and Idaho, along with the Federal Emergency Man- agement Agency, military com- mands and members of the pri- vate sector. Geologists and seismic experts predict major seis- mic activity along the Casca- Pork Chop Dinner Scalloped Potatoes, Veggie, Apple Sauce & Salad Bar Friday May 27 th 4 pm ‘til gone dia faultline could devastate communities throughout Ore- gon, especially along the state’s coastline. Much of Oregon’s infrastructure, such as hospi- tals, roads and bridges, remain vulnerable to collapse, accord- ing to the 2013 Oregon Seismic Safety Policy Advisory Com- mission Report. Lawmakers also recently approved a record amount — $50 million — to reinforce the state’s schools against collapse in the event of an earthquake. The Legislature created Har- ryman’s position in 2015 to develop earthquake response and recovery plans for the state. WILL BE DISPLAYED AT THE O CEAN V IEW C EMETERY . Cla tso p Po st 12 N orth w es t H a rdw oods • Lon gview , W A Contact: Steve Axtell • 360-430-0885 or John Anderson • 360-269-2500 Hands-on Hand Ha nd d s- s - on c cooking co ook k in ng c cl classes l as a sse s s se for fo o r al a all l Memorial services will begin at 11:00 am Dropping of the wreaths by the Coast Guard Guest speakers A potluck immediately following the services at the American Legion — bring your favorite dish 6PM “Karaoke Dave” 1132 Excha n g e S treet 325-5771 Alder and Maple Saw Logs & Standing Timber May 30, 2016 This Year A N A VENUE O F C ROSSES & F LAGS gency operations at the Public Health Division for the past 10 years. “Mr. Harryman has the expe- rience and expertise needed to bring our state agencies together to ensure they are well coordi- nated as we work toward mak- ing Oregon seismically resil- ient,” Brown said in a statement. Harryman will work out of the Oregon Department of Geology and Mineral Industries ofice in Portland. The Capital Bureau is a col- laboration between EO Media Group and Pamplin Media Group. W A NTED M EMORIAL D A Y ceremony $8 .00 AS TO RIA AM ERICAN LEGIO N Harryman is the governor’s second nominee for the posi- tion. Brown had to withdraw her previous nominee in Febru- ary because a majority of sena- tors indicated they would vote against her choice. The previ- ous nominee, Derek Smith, a former chief executive oficer of Clean Energy Works, had no experience in disaster response or recovery. Brown announced earlier this month that she nominated Harryman to ill the post. Har- ryman has a master’s degree in emergency and disaster man- agement and has directed emer- LET’S COOK! skill sk skil k il i l levels. lee v ve e ls l . 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