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- Subscribe - Contact Us - Rate Card - Place an Ad Archives Revels Classifieds Real Estate Local Scene Wedding Weather Subscribe Contact Us February 24, 2006 Crisis in ‘workforce housing’ at hand Regional groups gather in search of solutions for escalating housing prices By Vickie Aldous Ashland Daily Tidings MEDFORD — More than 200 developers, government officials, real estate agents, activists, bankers and representatives from nonprofit groups put their collective heads together to identify the most promising strategies for tackling Southern Oregon’s affordable housing crisis. The disparate groups gathered earlier this week at Medford’s Red Lion Inn for the Workforce Housing Summit. In Ashland, only two houses are on the market for less than $250,000 (one shown above). The median housing price hovers around $400,000 (middle). A three-bedroom, three-bath house in a treed setting with mountain views, decks and separate living space downstairs is on the market for $769,000. The event was organized in recognition of the fact that it’s no longer just low income residents who can’t afford housing. “Workforce housing” is intended to bridge the gap for low, middle and even higher income residents who earn too much to qualify for affordable housing subsidies but not enough to rent or buy a home, according to event coordinators. While Ashland and Jacksonville have long been recognized as having high housing prices in the Rogue Valley — with average house sales prices topping $450,000 in 2005 — prices have escalated in surrounding cities that serve as “bedroom communities” for workers, according to data presented at the summit. The average house sales price rose above $200,000 in White City — the Rogue Valley’s lowest priced market — in 2005, up from just over $100,000 in 2000. Talent’s average house sales price spiked above $375,000 in 2005, making it the third highest-priced market in Jackson County, the data reveals. Keynote speaker David Pearce Snyder, a nationally known futurist, said Americans need to consider a range of options for reducing the cost of housing. Those options include streamlining the land-use process, making the home-buying process less expensive by bypassing middlemen, clustering smaller scale homes like European villages and building multigenerational housing where grandparents live with families. “Some of our adaptations may be reinventing American suburbia,” he said. The money side Summit participants reviewed a number of methods for financing workforce housing and made their picks for what might work best. Many viewed a sales tax on home sales as a viable method for generating money for workforce housing projects. A 0.5 percent tax, for example, could be charged on the price of a home, with the first $200,000 of the cost exempt. The tax would generate $500 on a house that sold for $300,000. Talent City Councilor Wendy Siporen said the tax could help communities generate money off people who buy houses as investments and then sell them at a profit, driving up prices. But not everyone supported the real estate tax. “It seems to me it just adds to the price of a house,” said banker Wayne Thompson. Tax supporters would have to lobby the Oregon Legislature when it reconvenes in 2007 to lift a state ban on real estate sales taxes. Money could go into a regional housing trust fund. Some participants said such a fund should be set up as a 501(c)3 nonprofit so it could receive tax deductible donations as well. The employer side Employers and others worried about many workers’ inability to afford homes met in groups to discuss what they considered to be the most viable strategies for meeting those needs. Employers could create down payment and closing cost assistance programs, provide matches for workers who set up savings accounts to save for a home or negotiate for discounted group mortgage rates for employees. Some of the incentives could be tied to the worker staying with the company, which would help with retention. Employers also could be eligible for a state tax credit if they help employees buy a home. Participants emphasized the need for education for all parties. They advocated that employers work with nonprofits that are familiar with affordable housing issues, and that employees attend home buyer and finance classes. Public and private Community land trusts, like the Ashland Community Land Trust, received high marks for their ability to lower housing prices by retaining ownership of the land beneath sold homes. Nonprofits and government agencies also could offer subsidies to buyers, who could buy a home at a below-market price but then would be committed to only sell the home to another qualifying low-income person at a below-market rate. The agreements generally allow the house to appreciate a small percentage each year, with the original buyer also getting credit for any improvements he or she made to the property. Many developers said cities need to streamline their land-use rules. More affordable housing could be built if cities encouraged mixed-use development, with commercial and residential uses coexisting. Former industrial sites could be redeveloped for housing. However, some said communities could be resistant to using commercial and industrial land for homes because they also are working to attract businesses that provide jobs. Encouraging infill, or construction on vacant areas that are surrounded by development, boosts the availability of land for affordable housing. Cities need to be more flexible about odd-sized lots, according to some developers. Governments could consider mandating the construction of low- and moderate-income housing when market-rate subdivisions are built. Developers could be allowed to build more densely if they met that provision. Governments also could reduce property taxes for a set period of time when developers rehabilitate or construct buildings for workforce housing, many summit participants suggested. Overall, participants sifted through more than 70 methods for providing workforce housing to make their top picks. The Southern Oregon Center for Community Partnerships, founded in 2004, will advocate for the strategies favored by participants. Staff writer Vickie Aldous can be reached at 479-8199 or [email protected]. 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