The affordable housing situation in the United States is serious. Communities and social service agencies are experiencing increasing difficulty in providing housing for low-income households. For example, in 1993, the number of low-rent units fell to 6.5 million, while the number of low-income renters rose to 11.2 million resulting in a shortage of 4.7 million units. In addition, between 1973 and 1993, the median income of renters dropped 19 percent, while the average rent increased 12 percent.

In 1996, an adult working full-time at minimum wage earned about $823 a month before taxes. The average market-rate rent in the United States is $428 for a one-bedroom apartment. According to a recent study by the U.S. Department of Housing and Urban Development, 5.3 million households spend more than half their income on rent or are living in seriously substandard housing.

Affordable housing is not just a national problem. Oregon faces many of the same difficulties as other regions of the Country. Oregon's 1992 Comprehensive Housing Affordability Strategy (chas) indicated that 56,000 Oregon households (about 4 percent) are currently paying more than 30 percent of their income on housing. An estimated 20,000 homeless persons in Oregon also need housing and other assistance. While the number of housing units considered affordable is declining, the number of households in poverty is increasing.

These trends are the result of changes in the traditional economic base of communities, population increases, changes in the number of units in the housing stock, and the rising costs of new construction. Like many areas in the United States and Oregon, the residents of Josephine County have also been affected by these trends.

Josephine County is located in southern Oregon. The county had a 1995 population of approximately 71,100, and has experienced high unemployment rates and increasing housing values. In addition, the County is attracting considerable numbers of retirees—over 20 percent of Josephine County residents were over age 65 in 1995. These, and other factors, are decreasing the availability of affordable housing in the County, and residents’ ability to pay for housing.

The purpose of this report is to identify and quantify housing needs in Josephine County. This report analyzes the availability and affordability of housing in Josephine County, indicators that describe present and future housing needs of Josephine County residents, and barriers to affordable housing in Josephine County. The CDC contracted with the University of Oregon’s Community Planning Workshop (CPW) to complete this study.

Following is a summary of the Josephine County Housing Needs Assessment. This section includes demographic characteristics, housing condition, housing cost and household income, development patterns, and housing needs.

• Our medium or "best" estimates indicate that Josephine County will need to plan for over 4,700 additional single-family housing units between 1995 and 2015. This amounts to about 226 units per year. However, population growth has exceeded PSU forecasts and may cause our projection to underestimate the actual number of housing units needed in the County.
  
• A total of 390 units lacked complete kitchen facilities, while 455 units lacked compete plumbing facilities. Twenty-four households indicated in the 1990 Census they had no source of heat in their housing.
  
• The 1990 Census found about 7.0 percent of Josephine County households experienced crowded conditions. About 18.9 percent of survey respondents experienced crowded conditions in 1996.

Josephine County is growing. Between 1970 and 1980, Josephine County experienced a population increase of 65 percent, compared to 27 percent for the state of Oregon. However, between 1980 and 1990 this trend reversed. Between 1980 and 1990, the county experienced an overall population increase of 7 percent, or an average annual increase of 0.6 percent. This was significantly lower than the statewide increase of 14 percent. The County grew from 62,649 to 71,100 between 1990 and 1995—an increase of over 13 percent.

Josephine County is projected to grow at faster rates well into the 21st century. According to Portland State University’s projections, Josephine County will have a population of 72,102 by the year 2000, and 82,200 by the year 2010. However, these projections may understate actual population growth in the County. In 1993, PSU projected that the 1995 Josephine County population would be 67,324. The 1995 PSU estimate placed the County’s population at 71,100.

Population growth will drive the housing market in Josephine County. New residents will create demand for housing. The County will need to plan for as many as 4,700 additional housing units between 1995 and 2015. This equates to about 266 new housing units annually during this period. Because these estimates are based on PSU projections which we have stated may underestimate actual population growth, housing needs may actually be higher than 4,700 units.

Recent economic trends in Josephine County have contributed to households’ inability to afford housing. Structural shifts in Josephine County’s economy have had an impact on residents’ ability to afford housing. The county has experienced severe declines in the forestry industries.

Josephine County consistently has unemployment rates higher than the State. Between 1985 and 1995, the number of persons in the labor force grew by 18 percent, to 28,660 in 1995. Over this same period, the unemployment rate fluctuated from 10.3 percent in 1985, to lows of 7.1 percent in 1988 and 1990, to 8.0 percent in 1995.

The structure of the County’s economy suggests that affordable housing will always be an issue in Josephine County. Outside pressures on the housing market (i.e. in-migration and interest rates) are causing housing prices to grow faster than income, further exacerbating this problem.

Rapid increases in housing costs are creating an imbalance between households’ income and housing affordability. A comparison of key variables indicates that housing costs are growing at rates that far exceed growth in population, employment and income (see Table S-1). According to MLS data, the average sales price of homes in Josephine County increased 32.4 percent between 1990 and 1995..

While per capita income increased 23 percent during this same period, the reader should keep in mind that Josephine County ranked 31st out of 36 Oregon Counties with respect to per capita income in 1994. Income in Josephine County has historically been lower than state or national levels. In 1994, per capita income was about 81 percent of the state average and 76 percent of national levels.

Population and employment growth, coupled with attractive interest rates will only further exacerbate the gap between income and housing costs. The data presented in Table S-1 only addresses the home ownership issue—rental costs are increasing at rates comparable or in excess of sales prices.

The implications of this rapid increase in housing costs are that housing is quickly becoming less affordable in Josephine County.

Affordable housing is difficult to provide in rural areas. Many factors affect housing costs in rural areas. A key factor is statewide land use policies. The Oregon Land Use Planning Act of 1973 places restrictions on the use of agricultural and forest lands in rural areas. The Act generally requires large lot zoning (40 or more acres) on "primary" agricultural and forest lands. Even lands for which "exceptions" to agricultural and forest goals have been granted generally have zoning designations that require minimum lot sizes of one to five acres. Thus the cost of land provides a barrier in rural areas. Site preparation and construction costs are often higher than in urban areas. Finally, provision of water and sewer service adds additional cost.

Beyond statewide planning goals, living in rural areas compounds many key problems low-income households face. The distance from urban areas makes transportation an issue. In 1995, more than 70 percent of Josephine County residents lived in rural areas. Between 1990 and 1995, population in rural areas increased by more than 6,000 persons—an increase of nearly 14 percent. Significantly, population in rural areas is growing at rates that exceed those in urban communities.

The provision of social services is also an issue for households living in rural areas. Many households with financial need also have a wide range of social service needs. It is simply too inefficient and costly for these organizations to deliver services to many rural areas, thus social service organizations are typically located in urban areas.

The additional costs of living in rural areas imply that rural living is a preference rather than a need. Although housing needs in rural areas of Josephine County are as significant as those in urban areas, the additional costs and administrative burden of providing services in rural areas is a issue given the limited resources the County has to devote to housing.

The rapid increase in senior citizens and retirees has important implications for housing and social services in Josephine County. The median age in Josephine County in 1990 was 40.0 years—an increase of more than six years compared to median of 33.7 years in 1980. By comparison, the 1990 median age for Oregon was 34.5 years. Forty-two percent of Josephine County households in 1990 had one or more members age 60 or over. Further, 20 percent of Josephine County residents were 65 years old or older, compared to 13.8 percent statewide in 1990. Between 1990 and 1994, the population over age 70 increased by 1,600 persons—a rate of nearly 16 percent.

This rapid aging of the County’s population is shifting demand for housing and social services. Much of this shift is due to in-migration of retirees. According to realtors we interviewed, many aging households are purchasing property in Josephine County with the intent of retiring here. Housing demand from outside Josephine County is clearly a contributing factor in the rapid increase in housing costs in the County. Aging citizens have different housing preferences than other households. According to the 21st Annual Consumer Survey conducted by Professional Builder magazine in 1995, one-third of retirees say their present home is adequate, but their job or family needs have changed. Another 28 percent say their present home requires too much maintenance, while 24 percent need a better location. Forty-three percent of retirees said they preferred to live in rural locations—a figure higher than other groups.

Financial needs are the most pervasive housing need in Josephine County. Financial needs are measured through a variety of indicators: the number of individuals below the poverty level, the number of households considered low- and very low-income, and the number of households experiencing cost burden. No matter which indicator is used, the financial housing need is overwhelming.

The 1996 Josephine County Housing Needs Assessment survey indicated a majority of respondents (more than 60 percent) experienced cost burden (paying more than 30 percent of household income for housing) in 1996. Renters are far more likely to experience cost burden than owners. In fact, over 80 percent of renters experienced cost burden, compared to about 42 percent of owners.

Table S-2 shows a comparison of income and housing affordability in Josephine County. The data indicate that the County has a deficit of about 6,350 units affordable to low-income households in Josephine County. This problem is compounded by the fact that households that are not considered low-income compete with low-income households for affordable units.

Source: Community Planning Workshop.

Move-in costs are a major barrier to low-income residents. Table S-3 provides a summary of estimated move-in costs for Josephine County rental units in January of 1997. The data indicate that total move-in costs are rarely below $1,000 and are well above $2,000 for larger units.

Crowding and substandard housing conditions are comparatively minor housing problems in Josephine County. Although crowding and substandard housing conditions are key issues, the percentage of Josephine County households living in crowded situations or in substandard housing is generally low.

A dwelling unit is considered "overcrowded" if the household has more than one person per room in the household. About 7.0 percent of Josephine County households experienced crowded conditions in 1990. The 1996 Josephine County Housing Needs Assessment Survey indicated that about 18 percent of respondents lived in crowded conditions. However, this figure is probably biased by the AFS sample component and grossly overestimates crowding in Josephine County.

In 1990, 390 units lacked complete kitchen facilities, while 455 units lacked compete plumbing facilities. Thirty-one households indicated in the 1990 Census they had no source of heat in their housing. All of these figures are less than 2 percent of the total number of households in Josephine County.

Below we present recommendations designed to address both short and long-term housing needs in Josephine County. We have divided our specific recommendations into two categories: general recommendations to address housing need at the county level; and recommendations that specify actions that the CDC and its community partners can take to address housing needs in Josephine County.

Improving the housing conditions of low-income residents requires more than just providing federal dollars to individuals and families that meet government need criteria. An initial step in leading impoverished community members to eventual homeownership should be to stabilize and improve the economic condition of the community through efforts to create jobs. Once this foundation is established, a number of programs are recommended which can aid the low-income resident through the building of assets and increasing choices. The elements of the final phase promote and encourage homeownership.

General Recommendations:

The following recommendations are primarily targeted toward Josephine County and its communities. Many of these issues can be addressed during the periodic review process of comprehensive land-use plans. Communities are required to address housing needs through Statewide Planning Goal 10. Although most comprehensive plans we have reviewed contain policies that support affordable housing and housing needs of special populations, few communities have made substantial long-term progress towards these goals. This is not due to a lack of commitment on the community’s part, but is probably a function of the lack of resources and appropriate means to implement housing policies geared towards low-income residents. Following are approaches that local jurisdictions can use to address housing needs.

• Local agencies and organizations should continue proactive efforts to address housing needs.
  
• Communities should work with developers and citizens in determining design of low-income housing.
  
• Communities should take innovative approaches for funding and developing infrastructure for low-income housing.
  
• Communities should consider policies that reduce or eliminate permit fees for low-income housing.
  
• Communities should provide incentives for home improvements.
  
• Communities should develop partnerships with other organizations and agencies to address housing needs.
  
• Communities should create an incentive program for developers to provide low- income housing.
  
• Communities should evaluate their existing supplies of developable land not subject to environmental restrictions or topographic constraints.
  
• Communities should examine programs such as Mortgage Credit Certificate Programs or Community Land Trusts.
  
• Communities should review zoning regulations and other barriers to affordable housing, particularly in the area of accessory dwelling units.

Recommendations for the Community Development Corporation (CDC) of Josephine County and its Community Partners: