Coastal Gap -- "The numbers just don't pencil out at the coast"
A small rural county on the north Oregon Coast,
Tillamook faces the classic challenge of resort communities
everywhere: a gap between land prices and what the local workforce can afford to pay for housing. As the numbers on other pages show, we are a poor county and housing affordability for the people who live and work here is a critical issue.
Central to the very real gap is that Area Median Incomes (AMI) are lower in coastal resort communities than in urban areas or other rural areas, but cost of land and housing is higher (often significantly).
There are a number of reasons for lower coastal wages:
1. The low AMI is due to a predominance of service wages typical of a tourist-based economy.
People waiting on tables, serving coffee or working in a tourist shop, cleaning motel rooms and short term rentals, or tending gardens don’t make much money. Plus the work is mostly seasonal. We have a lot of those jobs – great for high school and college summer jobs (if you can live with your parents) but hard to make a living wage, even if you have a couple of them at once which is not uncommon.
2. In most inland rural counties the land values are lower and more closely correlate to lower median incomes.
Here second homeowners and wealthy retirees drive up land values – especially when there is a scarcity of land such as on an island or like in Tillamook County where the buildable land is squashed into a narrow strip along Hwy 101 between the ocean and the timber forests.
3. Federal funding formulas (which the State of Oregon must use) also discriminate against rural coastal areas. They are based on % of Area Median Income (AMI) for the whole state, with the assumption that living costs are equivalently less in rural areas with lower incomes. This is not true in urban-impacted rural areas such as the coast.
- Gasoline costs at least 20¢/gallon more on the Oregon Coast than in the cities.
- Land costs have quadrupled in last 4 years.
- An unbuilt lot here now costs more than the affordable price of an entire home.
- Areas within driving distance that used to house the workforce are equally out of reach pricewise for ordinary people and gas prices are already havinga major impact on commuting affordability.
- The result is an estimated $30,000/unit greater subsidy need, that cannot be met through federal funding.
- North County Buildable Lands Study data indicated that of 589 households, there was a shortage of affordable housing for 264 households, or 41% of the population. They had to pay more than 30% of income that is the standard measure.
- Actual sales data for the Urban Growth Boundaries in the 12 months from May 2006 to May 2007 shows average lot price for 18 lots sold as $258,000. Only two lots sold for prices affordable for incomes of $50,000 or less. Average home sale prices for 74 homes was $474,000. Only 12 homes sold for prices affordable for incomes of $75,000 or less (which represents 505 households or 85% of the residents). That meets only 16% of housing purchase needs for those households.
What it comes down to is that experienced housing experts in the state keep telling us that the numbers “just don’t pencil out at the Coast.”
A case in point: even in Clackamas County with Median income of $63,800, the Clackamas Community Land Trust needed a $70,000 subsidy per unit. In our community the amount of subsidy needed is much higher though we don’t yet know how much.
NeahCasa intends to keep at it one house at a time if we have to (and so does Habitat for Humanity) but there is a lot to be done. We’ll keep on truckin’.
Chart above is from Poverty,Wages & Income on the Oregon Coast from the Oregon Employment Office