Employers pay for housing? Jackson Hole is trying it.

            A radical approach to providing affordable housing in pricey Jackson Hole, Wyoming including the town of Jackson and all of Teton County, might be debate fodder in Bend and Central Oregon as rising real estate prices hit buyers and renters alike.

            For the past few years Bend has  proscratinated over how to shift a longstanding local mindset of single family homes on larger lots to accepting more multi-family and mixed used residential bulding.

            The state’s more recent approval of the city’s Urban Growth Boundary plan has essentially pointed the way—indeed, mandated--higher residential density projects on infill land within existing boundaries.

            Now the discussion is how to balance the economics for builders accustomed to generally higher margin single family homes on lots, against more dense development with lower profit potential, whether the latter results from greater building costs or smaller market demand.

Courtesy Jackson Hole News&Guide

            In Bend developers pay system developement charges, or SDCs, to offset impacts on infrastructure such as roads and services. With certain projects, single and multi-family, builders now agree to include a percentage of affordable housing, with eligibility depending on buyer or renter income in relation to the regional median. One idea has been to offer reduced SDC fees as incentives for multi-family projects.

            In Jackson and Teton County, Wyoming a new approach requires developers of commercial projects to pay for a ratio of housing units indexed to the estimated number of fulltime employees a project would generate. Residential builders are also on the hook to pay for units in some way, although recent decisions have shifted the burden more to the commercial sector.

            As might be expected, not everyone is joining hands singing, “We are the world...”

            The new regulations eliminate a moratorium imposed in March of this year on new development proposals in Jackson. But opponents argued that the new requirements would hurt small businesses and non-profits more than big box retailers such as WalMart.

            One opponent quoted by the Jackson Hole News & Guide said the rules would result in some developers opting to build “$1,000 a night” luxury hotels instead of housing or other commercial space.

            Prior to the new rules, as an example an apartment developer was required to provide 20 affordable units in a 90-unit building. The new rules reduce that requirement to 2.490 units, while raising the previous requirement for a 10,000 square foot office building from only 0.222 units to 4.924..

            The prevous rules were also more lenient on commercial developers whose projects generated only seasonal employment.

            The rules were adopted separately by the City of Jackson and Teton County, each which have their own mitigation requirements.

            While Bend and Jackson Hole are both heavily reliant on service sector employment, Bend is considerably more diversified economically. And Bend's population of nearly 95,000 according to the 2017 Census dwarfs Teton County, with only 23,265. 

            But Bend's median rental cost, as reported by Trulia, is about $1,800 compared to the $3,200 for Jackson.

 

No surprise that prices continue rise - Bend hits $449,000 high mark for June

            Without even a peek at statistics anyone asked to offer an opinion of the Bend real estate market might be comfortable with a seat-of-the-pants observation- prices are up again.

            It seems to be an ingrained assumption the market that begin to rise from the ashes 7.5 years ago would continue its climb along with the region’s position as Oregon’s fastest growing outside of the metropolitan Portland area.

            While some observers like to point to individual monthly median prices as a market sign, a better measure is the number achieved over consecutive months. Whatever the approach, there’s no doubt that prices are up and the “new norm” for Bend housing will be median prices in the low to mid $400,000s barring an imponderable catastrophe.

            For the month of June the median single family home price in Bend hit an alltime high of $449,000 according to statistics gleaned by Beacon Appraisal from the Multiple Listing Service of Oregon’s database.

            But in the first six months of 2018 the median price comes in at $415,000. Even using the smaller number that’s quite a recovery from $200,000 at year-end 2011—or  a 10.2% annual increase for the 7.5 years since hitting a bottom in the “Great Recession.”. (See chart)

            By another market metric, the Beacon report calculates a three-month inventory of homes available for sale, derived by averaging the past 12 months of sales and divided into the currently active listings.

            The inventory had been reported at a steady two months supply from November through May before the one-month jump. Even so, any market with less than four months inventory is still considered “tight” and to favor sellers.

Redmond also robust - the region’s second largest housing market

            Redmond median prices recorded a moderate percentage increase for June, rising from $295,000 to $298,000 from May and a six-month median from January through June of $292,000.

            For the 7.5 years since the market price bottom in 2011, Redmond prices have steadily climbed from $128,000, which translates to a 11.6% annualized increase and beats Bend by nearly 1.5% over the recovery period.

            Redmond inventory tracks similarly to Bend, with only two months supply November through February, but rising to three months for March through June. 

           

            The smaller submarkets

            With 2,532 sales recorded in the 12 months ending June of 2018, Bend had nearly 58% of the 4,396 Central Oregon closings tracked by the MLSCO. Redmond came in a distant second with 930 sales, or a little more than 21%. The five other submarkets represented just over 21% of sales.

            Of the smaller markets Crook County (including Crooked River Rancy) had 310 sales, followed by Sisters, 187; Sunriver, 175; Jefferson County (includng Madras), 153; and LaPine, 109.

            At the end of June Sisters had the largest inventory of available listings, at six months, generally considered somewhere between a normal or buyers market. Next highest was LaPine, five months; Sunriver, four months; Crook County, three months; and Jefferson, two months.

            The median prices for June closings ranged from a high of $523,000 in Sunriver on 20 sales for the month; $380,000 in Sisters on 17 sales; $270,000 in LaPine on 11 sales; $225,000 in Crook County on 24 sales; and $205,000 in Jefferson County on 16 sales.