No place to call home
Isabel Cortez has a full-time job, but she and her three children are squeezed into one bedroom of her parents' house because she cannot afford to rent an apartment.
After going through a divorce, the Amy's Kitchen food quality tester found landlords wanted at least $800 monthly for a two-bedroom apartment, plus a $1,000 deposit and the first and last month's rent up front. She can afford rent of $600 to $700.
"I had to move in with my parents," Cortez said. "I love my parents, but it's hard. We're all squished in."
Fortunately for Cortez, she was chosen to receive a Rogue Valley Habitat for Humanity house, which she will help build and then buy with a 30-year, no-interest mortgage. Monthly mortgage payments, including insurance and taxes, average $500 on Habitat for Humanity homes, according to the organization.
Cortez is among the thousands of Jackson County residents struggling to find rentals and houses they can afford.
The rental vacancy rate has plummeted to about 2 percent, and many landlords and property management companies are raising rates as demand outstrips supply.
Meanwhile, the median price for existing home sales has risen from $145,000 in 2011 to $221,500 as of February across Jackson County.
A family of four with a median household income of $55,875 in the Medford area can generally afford to buy a home that costs between $165,000 and $220,000, according to rules-of-thumb about housing affordability.
In 2011, only Ashland and Jacksonville — long known for their high housing prices — had median home sales prices above $220,000. All other cities in the county had prices below $200,000, according to statistics kept by the Rogue Valley Association of Realtors.
The lack of affordable housing has become widespread in the county.
In 2016, Phoenix, southwest Medford, east Medford and Eagle Point joined Ashland and Jacksonville in having median sale prices above $220,000.
Talent, northwest Medford, Central Point and the Shady Cove/Trail area entered the affordability risk zone, with median prices rising about $200,000.
Only west Medford, White City and the Gold Hill/Rogue River area remain in the solidly affordable zone below $200,000.
Like rentals, for-sale houses are in increasingly scarce supply.
Countywide, there are 19.6 percent fewer homes on the market than last year. Homes sold after an average of 48 days on the market, compared to 73 days last year, according to the Rogue Valley Association of Realtors.
Supply not meeting demand
Again and again, housing market experts pointed to a lack of supply as a main driver behind rising prices for rentals and houses.
"We have a housing under-production problem. We should be building 25,000 units statewide. We're building 15,000," said Oregon Home Builders Association Chief Executive Officer Jon Chandler. "We're under-building based on our demographics. It has been that way since the recession. We're still under-building based on what we need — and what we are building may not match the price range people can afford. It's not ideological. It's economic."
Before the 2007 recession, lending standards were loose, allowing home builders and buyers easy access to financing and mortgages. The recession, with its housing market crash and high unemployment numbers, brought down builders and pushed many homeowners into foreclosure.
"Builders can't get loans — not because they don't want to build, but because lenders are gun-shy," said Colin Mullane, spokesperson for the Rogue Valley Association of Realtors and a principal broker with Full Circle Real Estate in Ashland.
Builders are also having trouble finding enough skilled construction workers and subcontractors, including roofers, framers, welders and carpet and drywall installers, Chandler and Mullane said.
Skilled workers switched jobs locally, or took their construction skills to other parts of the country that recovered more quickly than Oregon. Others started new careers in the oil fields of energy-boom states, local experts said.
With cuts to education budgets, many middle schools, high schools and community colleges scaled back their trade programs, so fewer skilled construction workers entered the pipeline, Chandler said.
Chandler and Mullane also pointed to high land costs as an impediment to building more homes.
As a result of the recession, the rental vacancy rate for Jackson and Josephine counties hit a 20-year high of 9.4 percent in June 2009 as renters moved in with families to save money. Toward the end of 2015, the vacancy rate was 2.27 percent.
Before, "property owners had to give concessions to get people in units," said Dave Wright, president and owner of the property management company CPM Real Estate Services. "Now with the improving economy, supply hasn't caught up. There's not enough new construction."
Regarding the building of apartment complexes, he added, "Rents are increasing, but with the cost of construction, it still doesn't make sense to build multifamily housing."
The rental frenzy
The recession triggered a decline in homeownership.
Many buyers lost their homes to foreclosure. As those bank-owned homes sat empty, many fell into disrepair.
Burst pipes, leaky roofs, broken windows and other problems have caused major damage to vacant homes that could otherwise be part of the local housing stock, said city of Ashland Housing Program Specialist Linda Reid.
"Units have been sitting empty — some for years. A house that would have been affordable is now not livable. It sat empty or got vandalized," she said.
After suffering job losses or foreclosures, many former homeowners and would-be buyers are reluctant to buy houses, Reid said.
"There's been a shift. Before, even young people wanted to buy a house," she said. "Now people are saying, 'It's better to be flexible. It's better to be able to move and not be locked into a house.' The nation is moving more toward rental housing."
The shortage of rental units and large number of people searching for rentals has created a feeding frenzy.
"It's a zoo," Reid said.
When landlords and property management companies screen prospective tenants, people with dings in their credit history, past evictions and foreclosures are passed over, local housing experts said.
"Landlords have their pick of who they want to rent to," said Jennifer Jennings, housing choice voucher supervisor for the Housing Authority of Jackson County.
There is also stiff competition for rental assistance programs.
In Jackson County, 5,416 people are on a waiting list to receive rental assistance vouchers, which they can use on the open market to supplement the amount they are able to pay for rent, Jennings said.
"The wait list is three years," she said.
When people finally rise to the top of the list, they have 120 days to find a suitable rental. In the past, 95 percent of voucher holders were able to find rental housing, Jennings said.
These days, just 67 percent are able to find a suitable rental they can afford. For the 33 percent who can't find rental housing in time, they are sent to the bottom of the three-year waiting list and must start the process again. The rule gives the next people on the waiting list a chance to find rental housing, Jennings said.
"It's hard to find a landlord who will give them a chance," she said.
A retired, disabled teacher who wished to remain anonymous is in the midst of searching for a rental. She has a voucher worth $440 monthly and is able to pay $215 toward her rent, putting her in the $655 monthly range.
The former teacher says she is online two or three hours every day, checking out new rentals as they are posted. She then rushes out to see the rentals in her price range, trying to beat out other home-hunters.
But she said the rentals she has seen are in bad shape and are in unsafe neighborhoods. One home had discarded needles from drug users scattered in the driveway.
"They're renting out shacks that should be $300 or $400 for $600 or $700," she said. "You would have to be doing drugs to live in these areas. They are not safe. This is 'affordable housing' in Southern Oregon."
Working people in professional jobs also are having problems paying their rent.
An Ashland woman in a white-collar profession who asked not to be named said the rent for her two-bedroom townhouse she shares with her child went from $810 to $1,050 after the complex was bought by a new owner.
"They said they were bringing it up to market value," she said, noting previous annual rent increases had been about $20 — not $200. "This kind of jump is so inconsiderate and non-compassionate."
One senior citizen in the townhouse complex already has moved away to Talent, and a working single father in the complex is considering a move as well, she said.
"I absolutely have to move. I've literally been forced out," said the working mother, who is upset that her child may have to switch schools and leave friends behind. "Working people are now having issues with actual or potential homelessness. It's not just transient people, it's working people."