Taking a look at the "Housing Crunch"

Last week, the Daily Astorian published a five-day spread on what they referred to as "The Housing Crunch." There's a housing shortage affecting Clatsop County, and it's become an issue that must be addressed and solved...to a certain degree. Although serious concerns were presented, it seemed as though there weren't very many solutions; not even on the government level. 

I read quite a bit about how low-income housing has become the main concern. There were more suggestions about addressing low-income housing than anything else, but with very little input on real solutions. I agree that low-income housing is incredibly important and necessary, but the problem with focusing primarily on low-income housing as a solution is that there's no money in it. Developers and investors - those looking to create housing for profit - aren't looking to implement low-income housing. The harsh reality is that it isn't lucrative enough to become a priority. 

You can't entice investors with low-income housing. You just can't. There's no real money to be made there. And guess what? Investors and developers are who is going to move this housing shortage out of a deficit. They're the ones building. They're the ones taking dilapidated houses and flipping them. They're spending money on development plans. They're buying vacant land. 

So how can you entice them? Well, with income and investment opportunities of course. They aren't looking to help low-income families, they're looking to make a profit. They're looking for dividends as they would in any other type of investment product. Where do we look, is the question.

A big part of the solution may come in the form of addressing the high demand for homes in the middle-class demographic. When I say middle-class, I mean the families and individuals who are looking for homes in the $300K-$400K price range - the "Move-Ups." In Astoria (and I'll reference Astoria absolutely for all intensive purposes), there are only 11 available homes on the market today, and the majority of them are too outdated to even consider. Providing middle class housing will alleviate some of the low-income housing demand by moving those higher-grossing families into more expensive homes, thus freeing up the cheaper housing units - turning them in to lower-cost homes or rentals. 

The housing market is staggered. If upper class families are moving into better homes, they'll sell to the middle class. When the middle class moves into better quality homes, they'll sell to the middle-lower class. Middle-lower class sells to low-income. So on and so forth. If low-income isn't buying, an investor adds it to her portfolio and it becomes a rental. Right now, there aren't many homes that the middle class are interested in. If you'd like to see the 11 homes for sale right now, I'll email them to you. 

ELEVEN. 

I know you're reading this and thinking, "This is isn't going to solve the problem." You're right. There is no single solution. However, there's a lot that can be done to provide incentives to developers who want to rehabilitate downtown buildings and turn them into condos and apartments. There's also a lot that can be done when it comes to expanding infrastructure to accommodate growth. I found it incredibly interesting that none of Clatsop County's Comprehensive Plans had been mentioned at all. The City of Astoria has a Comprehensive Plan that was amended in July 2016. There was no mention of these amendments in relation to growth whatsoever. For instance, Astoria's Comprehensive Plan projects increasing demand over the next 20 years, with both expansion and annexation suggestions to alleviate those demands. Why aren't we looking at those suggestions?

One of things that was mentioned in Astoria's Comprehensive Plan in relation to low-income housing was the fact that low-income housing falls primarily to mobile home units and multi-family housing, yet less than 1% of our housing stock is in mobile homes, which means multi-family housing is the only real solution to this housing crunch. How do we expand mobile home options? How do we expand multi-family housing options when developers have been denied the opportunity to build them?

Another very interesting point I pulled from the Comprehensive Plan addressed "Alternative Housing," and goes back to my initial argument to provide incentives on already established buildings that need rehabilitation:

"Smaller households, older households, and higher housing costs are expanding markets for 'alternative housing types' and reducing the demand for traditional large-lot, single-family development. Housing types which will see greater demand include smaller-lot, single-family developments, manufactured housing, clustered single-family housing, two-family housing, condominiums, and zero-lot line houses. Some of these trends are already evident in the form of development and development proposals in Astoria such as the Mill Pond residential development. " (Housing Element, Page 1)

What we did with Mill Pond was brilliant. BRILLIANT. Let's keep focusing on projects exactly like that. Let's also focus on acquiring land from a government standpoint so we can build multi-family units. The public sector needs to find a way to work with the private sector. That's the best way to tackle growth sustainably. 

If our cities and County can work together on a plan for growth, infrastructure, and zoning, alongside the private sector, we will be well prepared for the future. We might even be able to capitalize on that for future generations.

 

[Please leave a comment for discussion! I'm always looking for new ideas and thoughts. (This was also posted in LinkedIn and Medium)]

I live and play on the Oregon Coast. I sell real estate from Astoria to Cannon Beach. I blog about the cool stuff you can do on the Coast.