Grasping the GAP

Hood River’s land values are skyrocketing and housing is tough for many to afford. Local leaders respond to the trend.

August 27, 2005

What will be the effect of the widening gap between the cost of housing and the income of many residents of Hood River County?

Local government officials are concerned that potential employers could be driven away if the current trend continues. Without affordable housing to support a labor force, companies are not likely to settle in the valley. And that could erode the tax base needed to maintain infrastructure and other public services.

The American Farmland Trust figures that for every $1 paid by a manufacturing firm in taxes, about 28 cents is eaten up by the services they receive — with the remainder poured back into the community. That scenario is almost exactly reversed with residential growth, where the cost of service provision exceeds the money brought in by tax dollars.

“This is huge from an economic development perspective. If people have to live 25 miles away it makes a huge difference in attracting new businesses into the community,” said Bill Fashing, the county’s economic development coordinator.

A new study has found that almost 35 percent of home buyers within the City of Hood River are purchasing dwellings for investment or as a vacation retreat. Statistics compiled by Marketek, Inc., show that 43 out of 117 purchases in the city during the last 16 months involved second homes.

Dave Meriwether, county administrator, said a large number of second homes can also adversely affect the local economy. He said infrastructure must be provided for these homes but, since they are often only occupied seasonally, there is little investment back into the community. He and other officials are concerned that, if the current trend continues, Hood River could end up as a “resort town,” and lower income people driven away by the prices.

“The livability of this area continues to accelerate the demand for housing. But sufficient housing and affordable housing is becoming more and more problematic,” said Meriwether.

The market analysis recently published by the Oregon Downtown Development Association has not surprised local officials. In fact, because of an apparent lack of affordable housing, the county joined with the cities of Cascade Locks and Hood River, and port districts from both areas, to pay for the $15,000 study. Marketek, a Portland-based company, performed the field work that included an inventory of the existing housing supply, a demographic profile, analysis of residential demand, and suggestions for changing the nature of growth.

“This study quantified some assumptions that I think we all shared about the challenges we’re facing,” said Fashing.

He and Meriwether are planning a joint meeting with other local government leaders to start researching solutions to the problem. They feel it is time to put together a task force that can sleuth out affordable housing options. For the past five years, growth in Hood River has exceeded the state average and that trend is expected to continue. If a proposed tribal gambling casino is granted to Cascade Locks — bringing 1,741 full-time jobs — the demand for housing will become even greater.

Officials will be reviewing subsidies, incentives and regulations used successfully in other areas to increase the supply of workforce housing. For example, in Aspen, Colo., commercial developers are required to contribute 50 cents per square foot to an affordable housing fund. In Ashland, builders must devote between 15-35 percent of a project to affordable housing, depending upon the income level targeted. Avon, Colo., now requires affordable housing to be incorporated into planned unit developments. As a result, one of these projects has created 244 studio apartments and rental units of one, two and three bedrooms for families earning 50-80 percent of the area median income.

“We need to look at what sort of strategies can be developed and how they will be carried out,” said Meriwether. “We really don’t have any answers at this time but we now have more information on the problem.”

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