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,
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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.
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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
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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-
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