A shortage of housing for middle-class workers leaves employers and professionals in a bind
BEND, Ore. – Nearly seven years ago, Preston Callicott, the CEO of Bend-based software company Five Talent Software, offered a job to a software developer. The man moved from out of state to Bend, along with his wife and baby.
When Callicott asked the employee how he was settling into life in Central Oregon, Callicott was shocked by the answer. The employee had not been able to find a home that was both affordable and fit his family’s needs. They had been living in a hotel for weeks.
Callicott and his family decided to take an impromptu vacation. While they were away, the new employee and his family lived in Callicott’s home while they continued searching for a home of their own.
Callicott is not the only employer in Central Oregon to hear stories of their well-paid employees not being able to find housing. The shortage of housing in Central Oregon has begun to affect the recruitment and retention of workers, a problem that employers and economic developers fear could deeply impact the region’s long-term economic health.
“We can’t compete with other regions that have more housing available or that’s cheaper,” said Scott Aycock, the community and economic development manager of the intergovernmental group Central Oregon Intergovernmental Council.
FURTHER READING: As Central Oregon's population spikes, so does its housing crisis
Aycock said Central Oregon’s housing shortage has made COIC realize that affordable housing is key to economic development.
“If we care about people’s ability to stay in their jobs, they need housing,” Aycock said. “Employers understand that … if their employees have insecure housing, the businesses have insecure employees.”
“Workforce housing” is a term often used to describe housing, whether rental or owned, that is affordable to middle-class workers. Typically, workforce housing is considered affordable to people who make between 60 percent and 100 percent of an area’s median income. In Central Oregon, workforce housing is considered affordable for families who earn between 80 percent and 175 percent of area median income, or between $40,000 and $90,000 a year.
People whose incomes fall within that range make up the majority of Bend’s workforce, but housing affordable to those wage earners is in increasingly short supply, according to a report on mid-market housing published by ECONorthwest, a Portland-based economic consulting firm, in February 2017.
Historically, Central Oregon’s supply of workforce housing came from a process known as filtering, in which older homes, once sold for high prices, depreciate in value and become available to middle- and lower-income earners.
The ECONorthwest report, which provides an overview of the mid-market housing landscape in Bend, said that filtering can no longer provide an adequate supply of workforce housing in Central Oregon, given the region’s huge population increases and rising housing costs.
The existence of a healthy supply of workforce housing is considered to play a lynch-pin-like role in an area’s housing supply, and for good reason: When it is in short supply, the entire housing market is pressured; people whose earnings are on the lower end of the spectrum will likely rent cheaper housing, which in turn affects people who traditionally rent and make lower incomes.
Callicott, of Five Talent Software, would not disclose the average salary his software developers make, saying it is “highly confidential.”
But he did say they are “very well paid” with salaries in a range typical for software developers, with $60,000 a year as a starting salary.
“It’s not the kind of position you expect, in Oregon, would have a difficult time affording a home,” he said.
The software developer that Callicott offered his home to was ultimately able to find a home and stay in Central Oregon.
Rob Duvalle, the human resources director for the city of Bend, has had similar conversations to Callicott’s. One city employee moved to the area from across the country and lived with friends for months. “Where do you live?” Duvalle remembers asking the person. “‘I don’t really know,’” was the response.
The city has lost more than a handful of employees due to housing concerns, including a utility worker, Duvalle said. The base salary for such a position is $20.10 an hour. “That’s not a low wage,” he said.
“It’s a hurdle right now,” Duvalle said of the housing market. “We’ve lost employees that have moved here. We’ve been unable to hire certain employees who have wanted to move here. It has negatively affected our ability to secure talent.”
Questions from job candidates about housing are frequent, Duvalle said, and his staff have started asking candidates during the interview process if they are aware of the region’s housing market and whether they’ve started looking for housing.
“We make sure they’ve done their homework,” he said. “The last thing we want is a great candidate that we love, and then all of a sudden they call us and say they can’t show up.”
St. Charles Health System, which operates hospitals in Bend, Redmond, Madras and Prineville and employs more than 12,000 Central Oregonians, has been hard-pressed to fill certain positions due to the housing crunch.
Rebecca Barry, St. Charles’ vice president of human resources, said more and more recruits are turning down job offers because they cannot find homes they can afford.
“We’ve had people accept offers, be very excited, with full intentions of coming here, and then (start) their home search … and they can’t afford it,” she said.
The positions most affected at the hospital, Barry said, are surgical technicians and certified nursing assistants. Both those positions, according to Barry, pay $25 an hour.
The hospital is also having a hard time filling support positions, including processing and lab jobs, along with posts in housekeeping, janitorial and food service, partially because the hospital is competing with restaurants and other businesses in the area.
The time-consuming process of recruiting, screening and interviewing candidates is all for naught if the prospective candidate can’t live in the area.
“That’s a lot of time, effort and money, and then we’re back to square one,” Barry said. “There’s not always a backup candidate.”
The hospital has begun to rely on on-call surgical techs and nurses who travel to work at the hospital. They’re a more expensive labor pool, Barry said, because they don’t earn benefits and the hospital must pay for their temporary housing while they work for the hospital.
“It’s a short-term fix, and it’s not what you want to depend on,” she said.
Barry said St. Charles is beginning to discuss how to encourage lower-skilled workers, such as housekeeping or food staff, to become CNAs, including partnering with Central Oregon Community College to offer a training program.
Bend’s housing market has forced many workers, including employees of Callicott’s, to live outside of Bend, such as Redmond, 16 miles away and a half-hour commute to the north.
“Most of the younger ones are single, living by themselves,” Callicott said. “They carpool in.”
A few years ago, Duvalle said, the prospect of living in Redmond and commuting to Bend to work would have been a “deal breaker” in recruitment conversations.
Aycock, of the Central Oregon Intergovernmental Council, said he is beginning to investigate employer-assisted housing programs, which Minnesota and other communities around the country use. Such a program either provides company-owned housing to new employees while they seek housing of their own or have forgivable down-payment loan programs that help employees make a down payment for a home.
An affordable-housing project of 48 apartment units recently broke ground in Sisters. The city contributed $300,000, or 6 percent of its general fund, toward the project.
Brant Kucera, the city manager of Sisters, said providing housing affordable for all income levels is not only necessary for the many service workers in Sisters but also essential to the long-term viability of his community.
“We have our school district to sustain,” he said. “In the future, we need people with children to be moving here. The only way to do that is making sure we have housing affordable to people in their childbearing years. People can live in Sisters and work in Bend; that’s not a big deal to me. I want them to live in Sisters first.
“Communities are made up of people from all walks of life,” he said. “We need to make sure that when we develop housing, that we have all levels of affordability.”
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