Bend’s Development Code in Conflict with Housing Goals

 Note: This post first appeared as a guest column in The Bend Bulletin, April 14, 2024. Photos of the projects mentioned have been added.

            Bend elected officials and city administrators all say they’re working diligently to create more housing in what is in the top tier of Oregon’s fastest growing cities.
            Now a proposal for new multi-family housing in the middle of a single family neighborhood is bringing to a head some of the arguments that swirl around where new housing should be built. It has also highlighted deficiencies in the Bend Development Code that could allow units thought to be for apartment rentals to be individual condos or nightly rentals - even before a building is occupied.
            At first glance the opposition to the proposed Compass Corner mixed-use project at the north end of NW Awbrey Road might be dismissed as a typical NIMBY attitude of nearby residents. And a resident presenting himself as leader of a stated housing activist group, Bend YIMBY, has spoken in favor of the project.
            The project is proposed as a four-story structure with 40 plus apartment units and a lower floor of “Convenience Commercial.”  Nearby residents of single family homes are opposed to the building scale and design aesthetics covering most of a 1.02 acre site. These objections are not considered factors in city planners’ interpretation of the BDC, which is weighted heavily to encourage more dense housing.
             But a greater concern with the Compass Corner project is that the code allows them to be transitioned from permanent apartment housing to a wide variety of lodging—including short term rentals.

Compass Corner aerial illustration

            This possibility emerged in the city planning department review of the Compass Corner proposal that responded to several of more than 250 opposing comments prior to a public hearing April 4.
             The planning staff final report and recommendations emphasizes that the developer could complete apartment units, then apply to change the use to lodging by filing a “Change of Occupancy” request with the city’s Building Safety Division.
           Is it possible the developer, whose principals already are Bend hotel owners, might take this opportunity? Although a representative has said this is not the intent, it remains a possibility.  What would this do to create permanent apartment housing if that happens? 
            And the implications of Compass Corner extend across the city.
            Consider the more than 300 units now under construction as the Jackstraw project along NW Arizone south of downtown, and another 246 permitted in the Everpine complex nearby to the south of there. What would be the impacts if the same standard applied to Compass Corner is used for those much larger projects?

Jackstraw under construction

            Several Bend Bulletin articles describing Jackstraw and Everpine have referred to them as apartments for the rental market. This is impression left with much of the public.
            However, city planners note that the different zoning classifications for Compass Corner, compared to Jackstraw and Everpine, nevertheless permit individual ownership of “residential units” in that each provides for mixed residential and commercial uses.
.           This loophole in the BDC runs counter to any effort by the City of Bend to ensure projects expected to be full time residential apartment units will remain as such. It opens the way for a patchwork of nightly lodging interspersed with permanent housing throughout various zones within the city.
            One step could be a code amendment that requires development applications to clearly define the “residential” use after construction. If the use is for apartment housing then the project should be restricted to apartment rentals for a defined number of years.
            A code that is open to ambiguous interpretations and provisions conflicting with city objectives is a rocky path to achieve more housing at the expense of wider public support.
            This is an opportune moment for planners and the City Council to add clarity to a development code that has apparently had conflicting and unintended consequences for Bend housing goals.
            Any housing, any place, at any time with few restraints is not workable for the future.

 

Lee Hicks is a resident of Bend, and a former wire service, weekly and daily newspaper journalist and newspaper owner- publisher.

 

Is a generational divide joining interest rates as factor in housing?

             Are younger potential homebuyers stuck with renting their home or condo - with scant chance of finding something affordable to buy??
            Could it be that grandma and grandpa – and maybe mom and dad – are locking the kids out of the housing market?
            That along with mortgate interest rates that have been stuck above 6% for some time are often blamed for the shortage of homes available for a younger generation dreaming of a place of their won.
            By some theories, an equity rich older generation is either staying put in their homes or selling and rolling the cash into another home, thereby driving up prices and competition for buyers, and squeezing more affordable inventory out of the market.
            In some cases retirees may be splitting that equity between a couple, or more, places—maybe a condo in Palm Spings and a smaller house Bend, after escaping the urban turmoil and traffic of Seattle, San Francosco or Portland.
            All that said, let’s take a look at the Bend real estate market for the 12 months of 2023.
            The Beacon Report complied by Beacon Appraisal Group of Redmond, OR and a continuing weekly Market Action Index distributed by First American Title together offer insights into where the market is now, where it has been and maybe where it could be heading.

            On a rolling 12-month basis median prices for single family homes in Bend on less than an acre rose a modest 1.24%, to $732,000 from $723,500 for the comparable period of 2022.
            Total sales dropped to 1,565 for the period, with 208 homes listed at year end, equating to a two-month supply of homes for sale based on the average of the past 12 months. That remains considerably below what professionals say is a balanced market of 5-6 months inventory. By comparison there were 2,033 sales in 2022 and 226 listed at year end, translating to an inventory then of only 1.5 months.
            In Redmond, Central Oregon’s second largest home market, median prices dipped from $512,000 to $486,000 for the 12 months, $26,000 or 5.08% under 2022. Redmond’s total sales sank from 782 in 2022 to 598 in 2023, with 134 homes available, or a  three months supply. That represents an increase from two-months inventory at the end of 2022.       

   Some observers say the marginal differences in year to year  median prices and inventory are reflective of a national trend wherein sellers are staying put and new home building doesn’t match potential demand. The inventory keeps the market balance on the
sellers side, except fewer owners are selling.
            That’s the conclusion in the January 24 Market Action Index snapshot of Bend housing by First American Title, which has Bend moving slightly more into a sellers market which could mean more upward pricing pressure.
            In Bend the lack of more affordable houing in relation to median incomes has led to a push to create deed restricted workforce housing. In some situations, employers are participating with non-profit housing groups to improve inventory.
            Local initiatives dovetail with an aggressive housing initiative backed by the Oregon governor, with some bipartisan legislative support. That would potentially loosen state funding that could improve affordability through incentives for entry and mid-level housing construction.