Bend has long been a town of single-family homes, the public-policy term for traditional houses, arranged in rows and separated by yards.

The city is now charged with planning for the number of such houses to be built by developers through 2028, while also making allowances for apartments and townhouses.

Such a “housing mix” was included in a 2010 proposal to expand the city’s urban growth boundary, the line beyond which the city is not allowed to develop. That proposal, which called for 65 percent of all new homes within the current and future boundary to be single-family, was rejected by the state and sent back to the city.

According to the Oregon Land Conservation and Development Commission, which reviews UGB proposals, the city failed to justify how such a housing mix would satisfy the need for more affordable options, a need the city itself had argued was driven by a lack of apartments.

The city and LCDC agree Bend needs 16,681 new residences by 2028, but now they must agree on what kinds of residences those will be.

Final say is up to the City Council, but city staff and a committee of volunteers working on the urban growth boundary process have proposed a new mix, cutting the number of new single-family homes down to 55 percent. The remainder is split into 10 percent for what’s called single-family attached housing, which often means townhouses, and 35 percent multifamily, which is commonly apartments.

“Getting to those numbers was a blend of art, science and, to be honest, politics,” said Brian Rankin, the city’s principal planner.

The art, Rankin said, lies in the inherent guesswork of predicting future needs, while the science comes from the way the guessing was informed by models based on a variety of factors. Some of the variables the city examined include past trends, demographic preferences and population projections. However, there is no single way to combine those factors, and the city was able to produce multiple projections for the needed housing mix.

The residential technical advisory committee, a group of volunteers studying the housing mix, initially supported backing a mix that called for 60 percent new single-family homes. That idea, however, encountered the political reality of Oregon’s land use laws.

At a residential committee meeting in late August, a representative of the state’s Department of Land Conservation and Development was asked if he thought the 60 percent or 55 percent option — known respectively as trend one and trend two — had a better chance of being approved by the state.

“Of the two presented, trend two is better,” Rankin recalled the DLCD representative saying.

Andy High, a vice president for the Central Oregon Builders Association and a member of the residential committee, said he believed trend one was the better option, but because of the dire need to expand the urban growth boundary, he backed trend two.

“There’s an extreme land shortage in Central Oregon,” High said last week. “If we don’t do anything, we’re just going to see land prices rise. The reason I supported trend two is because it will likely pass. I think the other way, the 60 percent way, would have better reflected what our community is actually like.”

The two trends

If trend one and trend two were both built out, it would be hard to tell which was which from a bird’s-eye view. If trend one became a reality, by 2028, the city would have 35,633 total single-family homes. With trend two, the number would be 34,799, a gap of 834. Even compared with the original proposal, which called for 65 percent single-family, trend two is only off by 1,668, while the number of multifamily units increases by 333 to 13,223.

Tom Kemper, the executive director of Housing Works, the region’s housing authority, and a member of the residential committee, said he didn’t feel there was enough evidence pointing toward either option.

“It felt like it was just, ‘Do you want door A or door B?’” Kemper said in October. “It’s all a matter of degree between the two, but the interesting thing about it is that it is a substantial departure from the historic trend, which makes a lot of people nervous. I think the speed with which we’re doing this makes me nervous.”

Sid Snyder, a retired software developer on the residential committee, said Friday he believed the city could have gone even further away from single-family homes.

“There’s this one view that we know what people want, because we have the historical data to show what people have bought,” Snyder said. “I don’t agree with that. What people bought can also simply be a reflection of what was available. If you need a roof over your head, you may not like it, but you have to take what’s available.”

Supporting the idea that future development should embrace more apartments and townhouses is the observation that younger generations prefer these housing styles over traditional homes with a fenced-in yard. There’s also the fact that Bend’s rental vacancy rate is less than 1 percent while many of those lucky enough to have an apartment have experienced rising rents.

It has also been argued that the risk of overestimating the need for apartments is less severe than for single-family homes. As Rankin pointed out, “A person who can afford a single-family home can also get an apartment, but the opposite is not always true.”

Nonetheless, Bend residents haven’t always welcomed multifamily developments. A recently proposed apartment complex off Southwest Summer Lake Place has led to residents organizing in opposition, claiming the development will create more traffic and change the feel of the neighborhood . On Northwest Steidl Road, a small street by the Portland Avenue bridge with single-family homes, neighbors fought the building of a triplex for five years, bringing the case to the Oregon Land Use Board of Appeals multiple times.

“We’re not changing this city into a bunch of tenements,” Snyder said. “That’s absurd, but that’s the way many folks have reacted to this. They just see these big, ugly apartment complexes. One, they don’t need to be big, and two, they don’t need to be ugly. They can be perfectly attractive, and they can be duplexes, triplexes, condominiums or townhouses.”

Rankin made the point that in Old Bend, one of the city’s more expensive neighborhoods, multifamily homes exist on streets dominated by large single-family homes.

“We’re not talking about anything new here,” he said. “In the city’s most historic neighborhood, you can see these buildings right across from some of the most valuable single-family homes in the city.”

Rankin pointed to a stretch of Northwest Broadway, where a series of lots have multiple units. And on Northwest Riverside, right across from Drake Park, what looks like a single-family home is actually divided into multiple apartments.

“Density can fit in these neighborhoods without affecting livability, you already see that across the city,” he said.

To help new development shift toward apartments and townhouses, the city is considering changes to its code. The ideas range from creating incentives for such developments with smaller fees to allowing more flexibility in how close a building can come to the sidewalk. The city could also set more strict requirements for density in areas across the city, making it impossible to build large single-family homes in places prime for redevelopment.

“The problem is, it’s up to the developer to actually build something,” Rankin said. “The city has little power to determine how developers work. They interpret demand and risk and the code and profit, and then decide what to do. We can change policies to help the market produce the needed housing, but we really can’t make anything happen. That’s why we need to make sure what we propose is supported by the market.”

Troy Field, the 0.8-acre playing field on NW Bond Street and one of the last pieces of ground left undeveloped in downtown Bend, is officially for sale.

Fratzke Commercial Real Estate listed the parcel, which belongs to Bend-La Pine Schools, at $2.62 million. Although zoned for limited commercial use, it comes overlaid with a public facilities designation, meaning it was meant as a site for some public use. That designation can be removed or incorporated into a future use by a new owner, said Brian Fratzke, whose firm is the school district’s real estate broker.

Eight public entities had the first chance to bid on the property: the city of Bend, Deschutes County, Bend Park & Recreation District, High Desert Education Service District, Deschutes Public Library, Central Oregon Community College, Oregon State University-Cascades and Central Oregon Intergovernmental Council.

“We have to give these folks two weeks … and they all came back and said, ‘Thanks, but we don’t want to buy it,’” Fratzke said Wednesday.

The firm priced the field based on comparable sales between 2004 and 2007, Fratzke said. For example, a 0.23-acre parking lot, about 11,000 square feet, at 527 NW Franklin Ave., adjacent to McMenamins Old St. Francis School, sold for $95 a square foot in August 2006, he said. Troy Field, about 35,000 square feet, is priced at about $75 a square foot.

The Bend-La Pine school board agreed in October to designate the lot south of McMenamins Old St. Francis School as surplus property, the first step in listing it for sale. The money from the sale could fund construction of another elementary school, board members have said. Deschutes County assessed the property’s market value at $1.2 million. By comparison, the city earlier this year agreed to sell a 3.2-acre property at Wall Street and Olney Avenue for $1.9 million.

Opponents of the sale urged that the Troy Field property remain a place for lacrosse, soccer and general play. In the past, it’s been a baseball field and, in wintertime from the 1920s to the 1950s, an ice skating rink. Its name derives from the Troy Laundry, which lay east of the field until destroyed by fire sometime after 1989, according to The Bulletin archives.

As property in a limited commercial, or CL, zone, the field may accommodate housing, retail shops and offices, with height restrictions, or open space, such as a park.

The school district fielded calls from several interested parties after its decision to sell the property, said Fratzke, who said he could not identify those callers.

Along with Troy Field, the school district also put up for sale 1.64 acres zoned for medium-density residential use on NE Full Moon Drive across from Ensworth Elementary School. Fratzke Commercial Real Estate lists that property at $285,000.

WASHINGTON — Fannie Mae and Freddie Mac have set terms for letting borrowers put down as little as 3 percent of a home’s cost to get mortgages, a step criticized by Republican lawmakers as a return to risky lending.

Starting Dec. 13, Fannie Mae will allow the lower down payments for first-time homebuyers and permit refinancing borrowers to reduce equity to 3 percent to cover closing costs, the company said Monday in a statement. Freddie Mac will begin a more limited program in March giving breaks to lower-income buyers and first-time borrowers who get housing counseling.

“These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices,” Melvin Watt, who oversees the two U.S.-owned companies as head of the Federal Housing Finance Agency, said in a statement.

Watt encouraged the move as part of a broader effort to spur lending to minorities, young adults and first-time buyers. Lenders have tightened standards after paying tens of billions of dollars to settle lawsuits over mortgage-underwriting flaws.

Fannie Mae and Freddie Mac, which buy more than half of new home loans and package them into bonds, allow down payments as low as 5 percent. Fannie Mae accepted 3 percent down as recently as November 2013 before increasing the requirement in a tightening of its underwriting standards.

The move to allow lower down payments has generated criticism from some Republicans and industry officials. Rep. Jeb Hensarling of Texas, the chairman of the House Financial Services Committee, has faulted the idea as a return to the policies that caused the housing crash.

Officials of Fannie Mae and Freddie Mac said rules banning risky loan features will ensure that the new low-down payment mortgages are safe. Only borrowers buying or refinancing a single-family primary residence will be eligible.

Editor’s note: The Bulletin has partnered with the University of Oregon’s College of Arts and Sciences and Department of Economics to produce the Central Oregon Business Index. The index provides a regular snapshot of the region’s economy using economic models consistent with national standards. The index, exclusive to The Bulletin, appears quarterly in the Sunday Business section.

In the third quarter of 2014, the Central Oregon Business Index showed continued economic growth so steady that it’s almost boring, said University of Oregon economist Tim Duy, who compiles the data for the index.

“It’s not particularly dramatic,” he said Wednesday. “Drama’s bad. We want consistent, solid, steady improvement, and that’s what we’re seeing.”

The third quarter index reached 125.2, compared to 124.3, a revised figure, in the preceding quarter. The index, which is pegged to a 1998 benchmark of 100, is up 4.3 percent over third-quarter 2013. Duy said he expects to see trends in job growth, home sales, tourism and other measures continue to improve in the coming year.

“The recovery in Central Oregon remains in place,” he wrote in a quarterly analysis. “Expect continued improvement on the back of ongoing growth in the national and state economies.”

Home sales rose to about 440 per month, the highest since the second quarter of 2006, and above the average 259 per month before the 1997-2001 real estate bubble. The continuing arrival of new residents should fuel demand for new housing, particularly single-family homes, Duy said. Talk of another real estate bubble is, so far, misplaced, he added.

“A good chunk of the rebound we’ve seen is a bounce off the bottom. Housing prices fell to a level far too low relative to long-term trends in the region,” Duy said. “What I think is going on right now is we’re still not getting a sufficient supply response” to the demand for new housing.

Elsewhere, tourism showed strong growth as measured by transient room taxes collected in Bend. Duy’s data showed a steady increase, in dollars adjusted for inflation, from $1.7 million in third-quarter 2013 to $2.2 million this year. Only a decline in the number of airline passengers through Redmond Airport darkened the tourism picture, a phenomenon that Duy attributed to the Sept. 1 end of United Express direct service between Portland and Redmond.

The labor market continued to gain strength during the third quarter, with employment up nearly 5 percent over the year, coming within 3,100 jobs of peak employment before the 2007-09 recession, Duy wrote. Employers other than farms added 400 jobs over the quarter.

The loss Tuesday of more than 200 jobs at Woodgrain Millwork, in Prineville, lies outside the trend in Central Oregon, Duy said Wednesday. The company attributed its decision to close a manufacturing line to equipment damaged when a roof collapsed Nov. 14 under the weight of snow.

“Even with a strong economy, there’s still going to be churn,” Duy said. “Just because the economy is improving doesn’t mean everybody’s business is improving equally.”

Overall, he said, the economy gives reason to be optimistic. The U.S. economy is showing strength, and that momentum will be difficult to change.

“Economic activity is gaining strength more broadly,” he said. “Lower unemployment rates nationally and a steady stream of job growth will translate to higher wage growth in the next year.”

— Reporter: 541-617-7815, jditzler@bendbulletin.com

A second phase of an affordable housing complex on Bend’s east side will provide 40 apartments to low-income people, with four units set aside for veterans and others transitioning out of homelessness, officials said Wednesday.

State and local officials, including Bend Mayor Jim Clinton and Margaret Van Vliet, director of Oregon Housing and Community Services, marked the start of construction of Eastlake Village phase 2 on NE Bellevue Drive.

Kenny LaPoint, executive director of Housing Works, the Central Oregon public housing authority, said R&H Construction may complete the apartments by spring. Oregon Housing and Community Services provided Housing Works with tax credits worth $7.5 million to build the complex.

The new housing will add to the 40 units in phase one and 720 others also managed by Housing Works in Central Oregon, LaPoint said.

The new Eastlake Village complex will feature eight one-bedroom, 16 two-bedroom and 16 three-bedroom apartments, he said. Half the units will be occupied by residents earning 50 percent or less of Deschutes County’s median income; the other half will go to residents earning 60 percent or less of median income, LaPoint said. This year, 50 percent of Deschutes County’s median income equaled $31,200 for a family of four.

Speakers at the event described the lack of affordable housing and dearth of rentals in Bend as a crisis. LaPoint said he believed the city’s rental vacancy rate had slipped below 0.5 percent.

Van Vliet said, “When hardworking families can’t afford a decent apartment, they are forced to stay with friends or pay so much for rent that there’s no money left over for clothing, medication, decent food, much less music lessons or soccer uniforms.”

— Reporter: 541-617-7815, jditzler@bendbulletin.com

Rick Brickner and his wife, Daria, were having dinner at a downtown Bend restaurant a couple of years ago when she asked him an interesting question: “Could you move here?”

The Brickners, respectively 61 and 58, passed through Bend a number of times as they traveled from their home in Boise, Idaho, to vacation on the Oregon Coast. They slowly fell in love with the city and eventually decided it was where they wanted to retire.

But one thing is standing in the way of this dream.

Even though they have a budget of almost $2,500 a month, the Brickners are having a hard time finding a nice 2,000- to 2,400-square-foot townhouse or condominium to rent that meets a few basic criteria and is within walking distance of a commercial district such as downtown Bend or the Old Mill District.

“I know it will be very difficult to find what we’re looking for,” said Brickner, who has given himself a 50-50 shot at finding the type of rental home he and his wife want before his moving truck arrives in Boise at the end of this month.

Recognizing predictions that Deschutes County’s senior population will more than double over the next 15 to 20 years, Bend planners reviewed the city’s housing inventory and found it does not have the type of housing units, or enough of them, that baby boomers will be looking for when they retire.

They’re including a call to build more of these units — a mixture of small, cottage-style single-family homes, duplexes, triplexes and condominium/townhouse complexes — as they move forward with a long-range plan that’s supposed to guide the city’s future development.

“We need to diversify,” Senior Planner Brian Rankin said as he talked about the city’s need to build more multifamily housing units and fewer traditional, detached single-family homes so it can be ready for this demographic trend. “Ultimately, it’s about creating more choices in the marketplace.”

The boomers

When they sent back Bend’s request to expand its urban growth boundary in 2011, officials with the Oregon Land Conservation and Development Commission ordered city planners to pay close attention to current demographic trends and figure out how or whether they will affect the city’s growth in the years to come.

One of these trends involves the country’s 76 million baby boomers.

Population projections from the Oregon Office of Economic Analysis predict that Deschutes County’s senior population will more than double over the next 10 to 15 years because of the sheer size of its current boomer population — the youngest member of this generation turns 65 in 2029 — and the fact more and more boomers are expected to move to the region in the future because they see it as a good place to retire (see “Population boom”).

Between one of every six and one of every seven Deschutes County residents (roughly 15 percent) are 65 or older; by 2029, residents age 65 and older will make up 25 percent of the population. That age demographic affects housing.

“More than 50 percent of older Americans have said their next house will be smaller than their current house,” Rankin said, citing surveys that show many boomers are thinking about downsizing as they get ready to retire. “At some point, they will be forced to, or choose to, live in a housing unit that has fewer needs.”

Brickner and his wife had this goal in mind when they started looking at houses in Bend on Tuesday afternoon.

While Brickner and his wife loved the 3,000-square-foot home they built in Boise 14 years ago, Brickner said that when he gets older, he does not want to continue doing the type of maintenance and yardwork that living on the property required.

Brickner said there’s also no guarantee the housing market will continue to improve, which affects a decision to invest their retirement savings in another piece of real estate. He said many people learned this lesson when the housing market crashed five years ago and are also leery about buying a new home.

“There’s a lot of baby boomers who now realize owning a home is not necessarily a moneymaking proposition,” Brickner said, explaining why he and his wife want to rent their next home.

Brickner said his ideal place would be a nice townhouse or condominium that’s located in a development where someone else is responsible for keeping up the property’s yard work and other routine maintenance tasks. He also wants it to be located in an area where it’s easy to walk to nearby parks, grocery stores, restaurants and other amenities.

Over the past year, Brickner said he’s seen a couple of these developments pop up with vacancies on real estate ads. But these units are often available only on a short-term or seasonal basis because they’re owned by a boomer who plans to live there full time when he or she is ready to retire.

“It’s always hard to find townhomes or condos in small cities,” Brickner said, accepting the fact he may have to settle on one or two of his wishes to find a place. “I don’t think you’re going to see (more of these units) in Bend anytime soon.”

The need

Rankin said Bend’s current housing mix is one of the reasons Brickner might be having such a hard time finding the type of home he wants. According to the city’s records, detached single-family homes made up about 71 percent of the city’s total housing units in 2008.

Rankin said that’s because detached single-family homes were favored over any other type of housing when most of the residential development inside the city and the area that Bend annexed during the 1990s took place.

“Generally, what we see now is a continuation of what we’ve seen in the past,” Rankin said, explaining that because this type of home continues to be so popular, it now makes up closer to 75 percent of the city’s housing inventory.

But while this trend is good for people who either have families or are looking to start a family, it doesn’t necessarily meet the needs of aging boomers who may be ready to downsize or reduce maintenance .

It also doesn’t work for millennials, many of whom are expected to forgo homeownership in part because they’re likely to be carrying around record amounts of student debt when they graduate from college.

Members of this generation — who were born between 1980 and 2000 — will make up about 24 percent of Deschutes County’s population in 2030, according to the state’s estimates.

“Mobility is kind of an issue as well,” Rankin said, giving another reason the millennials may forgo buying their first home. “Younger people just tend to bounce around as they look for good jobs and experiment with places to live.”

Rankin said a committee involved in the city’s long-term urban growth boundary expansion process recently approved a target housing mix for 2030 that would be 68 percent to 70 percent detached single-family homes. He said this goal could be met by providing incentives or using the city’s zoning process to encourage developers to build more multifamily units such as the ones the Brickners are looking for.

But here, too, is another problem, because like boomers, millennials have expressed a strong desire to live in a neighborhood or community where they can walk to stores, restaurants and other amenities. Rankin said meeting this goal could be difficult because there is a dearth of empty space around the city’s main commercial centers that could be used to build new townhomes, condominiums and other multifamily housing units.

He said if the city wants to move toward its goal of building more multifamily housing, it may need to consider putting housing units on top of existing businesses, such as the apartments above Jackson’s Corner on Bend’s west side, or building new developments on available land that include a mixture of commercial and dense residential property.

“We have to figure out how many and what kind of housing units we want to build,” Rankin said, explaining it will probably be another two years before the city has finished its current long-term development plan. “And then we have to figure out where we are going to put them.”

— Reporter: 541-617-7816, mmclean@bendbulletin.com