Concerned officials and community representatives met in Seaside earlier this fall for a conference on affordable housing, seeking local solutions to a national problem that's rapidly worsening in coastal communities.
The cost of renting, purchasing and building housing of all types is creeping inexorably upwards. Increasing expenses are leaving low income and even middle class wage earners with fewer housing options.
Second homebuyers from more prosperous economies elsewhere continue to purchase real estate around the region, driving up prices in the process.
The bottom line is that coastal counties need more housing that year-round residents can afford.
Tory Laughlin Taylor is vice president for the Pacific Northwest for Seattle developer AF Evans. The company has a long history of affordable housing development.
Taylor is pragmatic about what it takes to get an affordable project off the ground. It boils down to government subsidies that preserve the profit margin for developers.
"There's the federal low income housing tax credit," Taylor said. "It's been around since the late 1980s and essentially provides a tax subsidy to investors directly, in affordable apartments that limit themselves to people who earn 50 to 60 percent of median income."
Taylor said in the past, when land and construction prices were lower, AF Evans could build a tax credit project and make a reasonable profit. She said the availability of subsidies fostered a thriving sub industry of tax credit investors. But times have changed.
"Increasingly, costs have gone up faster than income," Taylor said. "Everything is out of whack, and the economics don't work. These days, there needs to be some other source of free equity."
Taylor said one possible option now is what's called inclusionary zoning, in which developers are required to integrate 15 to 20 percent of the units they build in a project as affordable.
To make it worthwhile for developers to participate, communities can employ "bonus zoning" that means municipalities bend regulations to make the project pencil out. It usually means allowing more units per project.
"If you commit to making 20 percent affordable, we'll allow you to build that much higher," Taylor said. "It's a way to give more value to the developer."
Taylor said AF Evans has had great success developing mixed use buildings in Seattle that have commercial space on the ground floor and a mix of apartments on the floors above: some affordable, and others more expensive.
"In our apartments you couldn't distinguish whether they are low income or not," she said.
Taylor said officials here on the coast who are just beginning to tackle the affordable housing problem, should engage employers early in the process.
"The whole business community can be part of the solution. It's going to hit you all," she said. "If you can't retain employees because people can't live nearby it's going to take everybody down."
Astoria developer Chester Trabucco lives in Seattle now, but grew up in the local area. He has a history of renovating historic buildings downtown, like the Elliott Hotel and the building that houses the Cannery Cafe. He's also involved in two upcoming waterfront condo projects; the Englund project at the bottom of 15th St. and RiverPark Landing, at 6th St.
Trabucco said Astoria builders are facing the same problems as developers in other areas.
"It's hard to build anything without a return and no subsidies," he said. "It doesn't cost that much more to build a luxury project than it does an affordable one."
Trabucco said it's the trim packages that make the difference between high end and affordable housing; basic construction involves the same elements, like plumbing, sheetrock and expense.
What makes a project a good bet for a developer is the promise of profit to justify the cost of building. Without some mechanism to recoup costs, an affordable housing project might not break even when all's said and done.
Trabucco said affordable housing projects tend to be more cost effective in big cities, where there is a large population of tenants. That means big buildings with many units, and a better return on investment.
He said one dilemma in Astoria is that residents want it all.
"We can't develop Astoria as a park and expect to have all the services available," he said. "The more we build it as a park, the more people will move here who are high end."
Trabucco said the only way out of the current housing debacle is through compromise.
"A plan that says to get this, we're going to give that," he said. "Somebody has to subsidize it. There have to be tradeoffs."
This could mean the city will likely see more requests for zoning variances as affordable housing projects come to the table for consideration.
Trabucco said the upcoming Astoria waterfront visioning process could be a good venue in which to also consider larger issues of affordable housing, in the context of financial realities.
"You can't ask developers to do this and take a loss on it," he said.
Resort communities seek solutions
As real estate values have shifted in recent years, Cannon Beach's resort economy has come to depend more and more on workers who don't make enough to live there.
Architect Jay Raskin is president of the city council. He said the average house there now sells for around $600,000, which puts home ownership beyond the financial scope of many year-round residents.
He said there are people across a wide economic range living in Cannon Beach, but many bought their homes years ago when they were more affordable.
Raskin said today residents are being driven away because they can't afford to stay in the community. And that's not just in the hospitality industry, where wages for seasonal workers are typically low.
"We're concerned about maintaining city staff. Our most recent city manager was among the last to be able to buy a home here," he said. "Our staff when we have an emergency, if they're not living in town how do they respond to it? If we have a natural disaster, it's even worse."
Raskin said the nearby beach community of Arch Cape faces a similar situation.
"The fire district didn't have enough people living there to be firemen," he said.
Cannon Beach is working with the Astoria-based Community Action Team, Inc., a non-profit that coordinates resources for the economically disadvantaged in Clatsop, Tillamook and Columbia counties.
"At this point we are leaning toward a shared equity scheme," he said, referring to a plan in which the city would own a share of the property.
Such an arrangement would result in lower home prices, with homebuyers being partial owners.
Buyers would be able to build equity on their part ownership and get some return on their investment when they sold the property. But a few caveats would keep homes affordable and available to the people they were intended for.
"It could be structured so they would not be able to sell to second homebuyer