National Preservation Working Group
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Ann Lininger

Factual Context in Which Oregon's Affordable Housing Sector Operates

A.    Poverty in Oregon is Widespread, and Disproportionately High in Rural Areas.

Of Oregon's 3.4 million residents, 11% or 400,000 live in poverty; 14 % of families with children live in poverty.  Two-thirds of Oregon's impoverished residents live outside the Portland metropolitan area.  According to the federal poverty guidelines for 2004, a family of four lives in poverty if its income is $18,850 per year or less.  A single individual who earns $9,310 annually lives in poverty.   By comparison, the median household income in Oregon is about $57,000 per year.

Some Oregonians are particularly likely to live in poverty:  those who are disabled, elderly, young, people of color, or who live in rural Oregon.   

Rural Oregonians are disproportionately likely to live in poverty. While just over 20% of renters in Oregon are below the poverty level, 28% of renters in Coos County live in poverty.  Statistics from other rural counties show a similar increase over the state average.   Individuals who live in poverty are at high risk of becoming homeless; about one in ten of the extremely poor will become homeless.  

The high poverty rate in rural Oregon, where relatively low-wage agriculture, resource, and service jobs predominate, is likely to persist.  Although Oregon's unemployment rate is down from the same time last year, it remains troublesomely high, particularly in rural areas.  According to the Oregon Department of Employment, the unemployment rate in Oregon in June of 2004 is 6.8%.  In Coos County, the unemployment rate is 8.6 %.  In Douglas County the unemployment rate is 9.1 %.

B.      The Wages of Many Oregonians Are Low or Stagnant, While Housing Prices Are Increasing.

Nearly one-third of Oregonians who work for private employers in Oregon earn less than $10 per hour.   Even if a person works full time at this wage, his or her annual income would be only $20,800, just over the poverty line.  Across the country, workers' earnings are failing to keep pace with the rate of inflation.  On July 16, 2004, the Bureau of Labor Statistics reported that hourly earnings of production workers' non-management workers ranging from nurses and teachers to hamburger flippers and assembly-line workers' fell 1.1% in June alone, after accounting for inflation.  The June drop followed a .8 % fall in real hourly earnings in May.   At the same time, inflation rose 3.2 % from June of 2003.  

Even as wages are stagnating, monthly rents have increased significantly in the last decade.  Median monthly rent increased from $345 in 1990 to $475 in 1996, to $500 in 1998.   In 2004, median monthly rent in Oregon is $663.   The National Low-Income Housing Coalition estimated that a worker earning minimum wage in 2003 would have to work 79 hours per week in order to afford a two-bedroom unit at the fair market rent of the area.

Both the costs of the average home and the average rent payment have risen at rates in excess of the average Oregonian's income gains.   Nationally, during the period from 1990 to 2000, incomes increased an average of 24%, while rents increased 64% and home prices, 85.9%.  

Oregon's rapid population growth has contributed to increased housing costs.  Oregon's population growth is about twice the national average, and it has pushed housing costs to some of the highest in the nation.  Oregon ranked 13th among the states in the cost of existing homes and 17th in the cost of new homes according to the National Association of Realtors.  The waiting list for subsidized housing is years long.   There has been a dramatic 30% rise in the number of working families that spend more than half their income on housing.  Working a full-time job does not guarantee a family a decent place to live.

Rural Oregonians spend untenably large portions of their incomes on housing. Among rural Oregon families that earn 80% of area median income or less, nearly 60% pay more than 30% of their gross income for housing.  By comparison, in the Portland area only 20% of households earning 80% or less of area median income pay more than 30% of their gross income for rent.  

C.    Poor Housing Means Poor Health.

Recent research confirms that housing policy has an important impact on public health and that any effective public health agenda must include a housing component :

• Doubling up in someone else's home or moving two or more times while pregnant made women twice as likely to lose a child to death before one year of age as women who were stably housed. 
• Households with annual incomes below $30,000 are twice as likely as others to have lead hazards in their homes. 
• Inadequate ventilation increases the concentration of indoor air pollutants such as radon and carbon monoxide and exacerbates moisture and humidity problems.
• Moisture causes paint deterioration, which puts children at risk of exposure to leaded dust and paint chips.
• Moisture also encourages growth of mold, mildew, dust mites, and microbes, which contribute to asthma and other respiratory diseases. Asthma is an allergic reaction to certain exposures ("triggers") such as dust, mold, pests (cockroaches, rats, mice), cold air, and dry heat.
• Use of common pesticides to control infestations contaminates homes with known carcinogens.
• Children from low-income families are eight times as likely to be lead- poisoned as those from higher income families, and African American children are five times as likely as whites to be lead-poisoned. Rates of lead poisoning among children living in the highest risk neighborhoods can be more than 10 times the national average.
• In addition to the direct health effects of substandard housing, child health suffers when paying high housing costs to escape hazards leaves families without enough money for medical care, prescriptions, food, and sufficient heat.

D.    Poor Housing Means Poor Performance in School.

Very low-income children whose families lack affordable housing are less likely to succeed in school. A report by the Portland Auditor concludes that families that cannot afford housing move frequently.  In 1999, three-fourths of family moves from the Portland School District were due to housing issues.  When families move frequently, kids change schools too frequently, causing "school mobility" problems.  According to one study, each time a student changes school, the odds of dropping out increase by 30%.  Students who change schools 4 or more times by sixth grade are a year behind their peers.   When families move too often, children and schools suffer.  Reynolds School District Principal Dennis McCauley underscores that point: 

Mobility—by that I mean moving from school-to-school frequently—is the single biggest factor interfering with kids' success.  Mobility makes it very difficult to even assess the effectiveness of our programs.  Until we can solve the school mobility problem and create stability in kids' lives, at least at school, it will be difficult to address the myriad of social and educational problems that grow out of high mobility.  Affordable housing is part of the solution.

E.    There Is Not Enough Affordable Housing To Serve Needy Oregonians.

1.    Oregon Lacks Sufficient Affordable Housing, Particularly for Those Earning Less Than 30% of Area Median Income.

Very low-income people, those earning 50 % of area median income or less, generally need some type of subsidized housing if they are to secure decent, affordable housing.  "Affordable housing" means housing for which, including utilities, a household pays no more than 30% of gross income.
 
"Extremely low-income" pertains to people who earn less than 30% of area median income.  The state of Oregon's affordable housing sector is particularly bleak for this group, where the unmet affordable housing need is greatest.    The number of affordable housing units available to extremely low-income people in Oregon has decreased in the period from 1990 to 2000.

• For every 100 renters seeking units affordable at 30% of median income, there are 30 affordable, available units.  This number is down 4%. 
• For every 100 renters seeking units affordable at 50% of median income, there are 63 affordable, available units.  This number is down 11%. 
• For every 100 renters seeking units affordable at 80% of median income, there are 105 units.  This number is down 8 %.  

In Portland alone, there is a need for 40,000 housing units affordable to people who earn 30% of median income or less, but only 20,000 such units exist. The supply is expected to remain mostly flat over the next twelve years, but the demand is expected to grow to 80,000 units. 

2.    Rural Oregonians Lack Sufficient Affordable Housing.

Affordable housing is particularly scarce in rural Oregon, where incomes are lower and poverty rates are relatively high.  Of the 129,000 households with unmet housing needs in Oregon, 56% are outside the Portland metropolitan area.

What little affordable housing exists in rural Oregon is at imminent risk of being converted to market rents, eliminating the infusion of millions of dollars in project-based rental assistance that currently flows into rural Oregon.  This risk stems from the potential prepayment by private landlords of mortgage subsidies provided by the United States Department of Agriculture's Farmers Home Administration (known today as "Rural Development" or "RD") in the 1970s and 1980s.  This issue is discussed further in Part IV.D, below.

F.    The Emergency Shelter System In Oregon Fails To Keep Pace With Demand.

Oregon's emergency shelter system is unable to satisfy the demand for shelter beds.  The Oregon Department of Housing and Community Services serves approximately 8,000 individuals through its shelter program every night.   Oregon's Continuum of Care Plan shows a gap of 57% for bed nights needed for individuals and a 69% gap of bed nights for families with children needing shelter.

Emergency shelter services in rural Oregon are particularly limited. According to Oregon's Consolidated Plan for 2001-2005, many rural counties do not have emergency shelters.  All rural counties lack an adequate number of transitional units and affordable permanent housing. 

In Multnomah County alone, almost 8,000 people with special needs were homeless for all or part of the year.   Special needs individuals include people with severe and persistent mental illness, a substance abuse disability, a developmental disability, a serious physical disability, or a combination of those challenges. On any given night the Multnomah County shelter system cannot help approximately 17% of homeless people who seek assistance.  

People with disabilities also disproportionately comprise the chronically homeless.  Of those seeking emergency shelter on March 27, 2002, 29% reported that they were eligible for services for the psychiatrically disabled, developmentally disabled, substance abusing and dual-diagnosed populations.  55% of homeless households of every size, and 60 % of single homeless adults indicate a disability such as substance abuse, mental illness, or a medical problem, as the primary reason for their homelessness. 

G.    Low-Income Oregonians Rarely Can Afford to Buy Homes.

Recent low-interest rates have permitted many upwardly mobile individuals to become first-time homeowners.  Efforts by CDCs to provide prospective homeowners with education, down payment assistance, and innovative homeownership products (such as community land trusts and self-help housing) have helped make homeownership a possibility for low-income people.  But housing prices have increased dramatically, particularly in the first-time homebuyer segment of the housing sector. Reported median values of owner occupied homes increased from $69,000 in 1990 to $120,000 in 1996 and to $135,000 in 1998.  The median price for a home in Oregon in 2004 is $160,185.   As noted above, the wages earned by low-income people are generally stagnant or falling.  Accordingly, homeownership remains unattainable for many. The Oregon Consolidated Plan for 2001-2005 indicates that affordability of home ownership in Oregon is decreasing.