Affordable Housing in Corvallis: Is It Within Your Grasp, Or Just Out of Reach?

Photo by Genevieve Weber
Photo by Genevieve Weber

Finding a place to live in any college town can be daunting, and Corvallis is no exception. A growing university population, lack of supply, and high prices mean that for many, finding an affordable place to live can be a challenge. Both a recent analysis completed by the City of Corvallis and the draft Consolidated Plan to cover the city’s Community Development Block Grant and HOME Investment Partnerships found affordability to be a growing concern.

The Lay of the Land

According to the Consolidated Plan summary, “The greatest housing need in Corvallis is for affordable housing for both renters and owners.”

The number of substandard units, those that have severe structural or plumbing issues, and severely overcrowded units is low in our community. What is high is housing cost burden for the poor or extremely poor.

The median income in Corvallis for a family of four is $80,800, the highest in the state of all metropolitan areas including Portland. The presence of a major research university and Good Samaritan Hospital certainly draws professional-level salaries into the community. But a large number of people in Corvallis make far less and struggle to find housing.

nocaption2In 2010, 78% of those making zero to 30% of the median income in our community spent more than 50% of their income on housing costs. Those in this category often do not have many choices due to lack of income or lack of mobility. They may lack access to educational resources about their rights as tenants or how to access affordable housing. Added to this stress is a tight market with high demand.

A recent Case-Schiller forecast predicts home prices in Corvallis will rise by 7.8% from the third quarter of 2013 to the third quarter of 2014. Meanwhile, according to the city’s analysis, “In aggregate from 1990 through the end of 2011, median incomes in Corvallis have risen 109% while home values have increased 232%, meaning incomes have been falling further behind home values for over 20 years.”

This trend is not unique to Corvallis. Compared to other cities across the nation and Oregon, Corvallis did relatively well when the housing bubble burst. But during the economic slowdown, there were few new buildings or apartments constructed in the city even as enrollment grew at OSU.

Bob Loewen is the Housing Programs Specialist for the City of Corvallis. His job is split between helping low-income homebuyers take advantage of a city loan program and dealing with landlord-tenant issues. Of the housing shortage, he said, “There was a lack of inventory on the market to buy. And there still is a low inventory.”

“Last month more houses sold in Corvallis than have sold since 2007,” according to Loewen.

Kym O’Hare is the NeighborWorks HomeOwnership Center Coordinator for Willamette Neighborhood Housing Services. She works with first-time homebuyers and her years as a lender help her counsel those getting ready to buy. She notes that finding affordable housing in Corvallis is not always easy. “That [finding affordable homes] could be a struggle but that’s why we want them to come here. There are programs and loans to help make it more affordable to be able to buy here,” shae said. “There is a lack of inventory of houses at $200,000 or less.”

Like Loewen, she notes that Corvallis is in a kind of bubble that keeps prices high. Willamette Housing Network also does foreclosure counseling and reports that Benton County did not see near the volume of foreclosures as Linn County.

This shortage also impacted the availability of rentals in Corvallis. The city analysis found that “recent vacancy estimates suggest the rate is currently at a particularly low level of between 0.5% and 2.5%.”

Country-Vitamins_5.9 (1)Jim Moorefield, executive director of Willamette Neighborhood Housing Services, has a similar response to the question of greatest challenges for renters in Corvallis.

“Lack of supply. When demand is high (in our case, caused by the increase in the OSU student population), and supply is low (construction of new housing has not kept up with the population increase), there are few vacancies and it’s hard to find anything. This dynamic also causes rents to climb and for our market to be increasingly expensive.”

Housing: A Spectator Sport

Many of those looking for an affordable place to live in Corvallis are not students. These families, young professionals, and graduate students can be frustrated by the low availability of affordable rentals and the lack of affordable places to buy.

Marian Ladenburg and her husband, who is pursuing his graduate degree, moved to Corvallis expecting to find suitable housing. “Coming to Corvallis, I thought my husband and I would fare better than most other students. I could work full-time and my husband is fortunate enough to have his tuition paid for and a stipend,” she said.

But like many others, Ladenburg was frustrated by the lack of suitable housing and the high cost. They currently rent a home built in 1974 with large, single-paned windows that substantially increase their heating and cooling costs. Like the study shows about many Corvallis homes, it is not substandard—not falling apart or unsafe—but it is expensive. The couple is expecting their first child and wants a warmer home that would also allow them to also save money. After looking for a new rental since February, they have determined that they have to stay where they are.

“It is impossible for us to find a rental in Corvallis that works with our budget that is located in Corvallis, at least two bedrooms, somewhat energy efficient, and allows one cat,” she said.

Ladenburg is a renter who actively seeks out resources. She has contacted Loewen about several issues. He is sympathetic to those like her who live in rentals that are energy inefficient, but he says there is not much the city can do.

According to Loewen, the landlord is not responsible for installing energy-efficient windows. Those single-paned windows with water running down them are perfectly fine. One problem is that landlords do not get the same tax incentive for replacing windows as owner-occupied units would. Duerksen Property Management is one agency that found a tax incentive for owners to replace some windows. Most do not.

Ladenburg has been frustrated by property managers who will accept applications before even showing the available unit and charge additional rental fees for use of a washer/dryer. She contacted Loewen after her current landlord refused to help with their electricity bill after the washing machine caused water damage.

“We had contractors come and dry everything out and follow due diligence to prevent mold, etc., but they also cranked up the heat for a week [to 80 degrees] and ran industrial fans. I called my landlord to see how she could reimburse my utility bill for the large difference due to the need for this extra energy. She refused to pay, telling us that she was under a tight budget also.”

Her only recourse was small claims court.

Annie Farber moved here with her boyfriend as he worked towards his doctorate. She works full-time at OSU and has struggled to find a suitable place after their current rental was placed on the market.

“I would say one of the biggest struggles is how competitive it is because I don’t have time to browse and inquire about places all day,” she said. “Having a dog has been another big hurdle, because many places don’t allow dogs or charge a pet rent and/or an extra deposit, which adds to the total cost.”

petsidePerplexed Over Pet Rent

Loewen notes that no one is quite sure if pet rent is legal. “That would be a lawyer question,” he said. “Statutes are silent on that.” The statutes are very clear that no one can be turned away or charged for having a companion animal. Nor can landlords charge a non-refundable pet fee. The deposit must always be refundable, which may be how Corvallis came to have pet rent. The extra $25 a month or more on top of higher rents can push a borderline affordable unit out of reach.

Jerry and Dawn Duerksen and their firm manage about 800 units within the city and have a different take on pet rent. They see it as a guarantee that normal wear and tear from pets can be taken care of, which is somehow above and beyond what a $350 deposit can cover. When asked what pet rent allows property managers to do, Dawn Duerksen said, “I don’t know how to answer this.” Jerry Duerksen said that pets by their very nature cause wear and tear, “That’s why they [rental agencies] charge a little bit of a premium.”

A Dirty Job: Establishing Rent

Establishing the actual rent for a property, according to the Duerksens, means seeing what other property managers and landlords are charging per bedroom. According to Jerry Duerksen, “there’s no specific formula” for setting a rental unit’s price. Having the prices be dependent on what others are setting creates “a kind of circular type thing,” he claims. This cycle can drive up prices in a market that is stretched so tight.

Pet rent, deposits, and high rents for older properties all combine to make renting in Corvallis a frustrating experience. “By far the biggest hurdle has been trying to find something in our price range, as many of the places that would be a great fit are way too expensive,” said Farber.

But the landlords are frustrated, too. About half of those who rent in Corvallis are students, and many have never lived independently before. So many student renters can mean substantial damage to properties. Loewen and the city are working with the university on educational materials to help students understand how to care for their rentals. Cleaning, paying bills, and learning to use appliances are key areas that apparently need work and can result in damage beyond what the deposit covers.

OSU’s First Year Experience Policy states, “Fulltime, first-year students who enroll at OSU within one year of high school graduation regardless of class standing must live on campus, in a university-owned and operated residence, for the full academic year.”

Students enrolled in select INTO programs will also be required to live on campus for their first three consecutive academic terms.

Photo by Bridget Egan
Photo by Bridget Egan

Help Is Out There

O’Hare, Loewen, and Moorefield all work with clients to help them afford rentals or their own homes. The Willamette Neighborhood Housing Network has an affordable rental program with properties throughout Linn and Benton counties. Their goal is to provide safe, affordable housing that will support economic and social development.

O’Hare works with potential homeowners because she and the Willamette Neighborhood Housing Network also believe that home ownership is important “to sustain families” and the community itself, providing a stable tax base and a sense of pride.

Home ownership can also make economic sense. Owning a three-bedroom home, for example, “would probably be less [than rent] in that market for that type of house,” said O’Hare.

The Housing Network provides courses for home buyers that are also a prerequisite for the city’s down payment loan program, a great incentive that is sorely underused. The loan program allows low-income buyers to receive up to $15,000 to help with down payment and closing. There is no payment for the first five years and principal payments only for the nine years after that. Only six loans were made this year, but more than 30 loans were made in the years before the housing peak.

Perhaps buyers are shy with the sluggish market and tougher lending standards. Plus, a buyer still has to have that $5,000 down payment to receive the city’s loan. O’Hare admits that the down payment is one of the biggest hurdles.

“Being in the Benton County area, a lot of times that down payment can be the difference between affording a house and not affording a house,” she said.

They administer the VIDA savings program to help buyers to save money, and it comes with a match that can be up to three times what the buyer contributes.

Willamette Neighborhood Housing Network has also recently started presenting its homeowner classes in Spanish and it offers an online version. O’Hare and Loewen stressed that there are many programs out there to help those who need affordable housing. But the buyer needs to seek them out. Lack of access to housing-related information and assistance resources, particularly by the Hispanic/Latino community, is named an impediment in the analysis done by the city.

nocaption4Education Can Make All the Difference

Kym O’Hare’s goal is education. If a potential buyer knows what they can actually afford in a home, what they can expect, and how to navigate the process, she has done a good job.

“When a lender qualifies someone, they qualify them on their gross monthly income and that’s not their reality. We try to educate people on that and make sure they can afford that payment and are sustainable.

“If they have all their ducks in a row and ready to go that will be their ticket to buy something,” said O’Hare.

In Development

The Willamette Neighborhood Housing Network has also broken ground on a group of land trust homes in Seavey Meadows in northeast Corvallis. These three-bedroom homes will provide affordable housing, including one ADA-compliant home, and retain their affordability for future buyers.

Another positive development, according to Loewen, is the monthly meeting of property managers in town instigated by Duerksen and Associates. He has seen a decrease in complaint calls the past few years and credits this group with some of that. He thinks having all the landlords communicating and cooperating is critical. The group has invited the fire and police department and ASOSU to come educate the group.

“Business peers don’t always talk,” Loewen said. But he sees that landlords are learning from each other what is appropriate or better or more efficient. They are also sometimes learning that certain practices are not legal and learning to stop.

“Property managers in this town manage roughly 40% of the units in town,” he said. “Those who come to the meetings manage about 30%.”

Dawn Duerksen encourages renters, neighbors, and tenants to come to the meetings, too. She said that the meetings make things better for everyone: “We’re only going to be better managers.”

The other critical piece is the Draft Consolidated Plan and Action Plan that is currently available for public review and comment. This plan presents the strategic vision for housing in the City of Corvallis and is used to apply for the federal Community Development Block Grant.

“The goals, strategies, and projects outlined in the Consolidated Plan and accompanying Action Plan are based on priorities established by the Corvallis Housing and Community Development Commission and staff of the City’s Community Development Department/Housing Division through a combination of research and data analysis, agency and expert consultation, and citizen participation.”

The citizen participation piece is the key for any change to the strategies and vision—and to the equity of the local market. Renters, buyers, and neighbors can call their local representatives, communicate with property managers, and attend the public hearing on Monday, July 1 at 7:30 p.m. in the City Council Chambers, which is located in the downtown fire station, 400 NW Harrison Boulevard..

Loewen also stresses that he wants renters and landlords to call or email him with any issues or complains. “Share with the world how to find me,” he said.

Most who live here really love the amenities. But these very amenities are what draw new residents and can exacerbate the stress on the market. As university enrollment continues to increase, so, too, will the search for affordable housing.

Ladenburg succinctly expresses the thoughts of many home-seekers: “Everything about living in Corvallis is wonderful—except the housing.”

 

Local Resources for Buyers

NeighborWorks HomeOwnership Center:

http://w-nhs.org/home-ownership-center/

Saving and Managing Money for Homeownership:

http://w-nhs.org/saving-and-managing-money/

Corvallis Homebuyer Assistance Loans:

http://www.corvallisoregon.gov/index.aspx?page=350

Linn-Benton Housing Authority:

http://www.l-bha.org/programs_family.html

 

Local Resources for Renters

City of Corvallis Draft Consolidated Plan and Action Plan:

http://www.corvallisoregon.gov/index.aspx?page=348

City of Corvallis Rental Issues and Assistance:

http://www.corvallisoregon.gov/index.aspx?page=350

Willamette Neighborhood Housing Affordable Rentals:

http://w-nhs.org/affordable-rentals/our-rentals/

Tenant Rights and Protection in Oregon:

http://portal.hud.gov/hudportal/HUD?src=/states/oregon/renting/tenantrights

Oregon Rental Housing Association:

http://www.oregonrentalhousing.com/contacts/association/l-brha.html

 

By Bridget Egan

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