By Katy Brooks, CEO, Bend Chamber
This article originally appeared in The Bulletin on December 11, 2022.
We all know that the lack of available and affordable housing is one of the most significant challenges to Bend and Central Oregon. Left unresolved, our housing will continue to have profound impacts on individuals and families, but it also worsens our labor shortage and impacts everyone in our community.
Lack of attainable housing hits us from multiple perspectives. From an employer’s standpoint, lack of affordable housing has become a determining factor on whether their business thrives, stays stagnant or withers. Bendites are having difficulty finding an affordable place to live and see other consequences of high-priced housing from a growing deficit of teachers and health care workers who can’t afford to live here, to limited business hours due to lack of labor.
A recent survey by the Bend Chamber of Commerce and ECONorthwest, a research company, showed even deeper issues related to Bend and Central Oregon’s unaffordable housing and rising cost of living. An astounding 81% of regional employers in the survey said housing had the highest impact on hiring.
The survey also illuminated a larger problem — that it’s not just housing costs that is driving labor away. Like the rest of us, employers have seen the impacts of rising costs on those who live and work here. Employers said that 39% of their employees have difficulty paying for basic necessities, such as housing, transportation, food and child care. These necessities cost more in Bend than across Oregon as a whole. Together, these necessities cost 8% more in Bend than across Oregon as a whole.
The high cost of housing in the region has been a prominent culprit in impacting employers and employees alike, with 91% of regional employers surveyed saying that the high cost of housing limits their growth and strains their existing workforce.
In an effort to find solutions, 43% of employers indicated that they have considered subsidizing housing costs by offering land for residential development, buying rental units for their workforce, or offering mortgage and down payment assistance to ease the housing costs for their employees.
Even with these efforts, the gap between wages employers can afford, and their employees’ need to keep up with rising costs of housing and other necessities is often insurmountable for individual businesses.
Employers shared other methods of helping their employees and their families with higher costs. Eighty three percent of employers increased wages, and 76% have allowed for more flexible work schedules. Employers have allowed their employees to move to other states where the cost of living is cheaper, offered relocation bonuses for employees moving to the Bend area, allowed their employees to use company vehicles, and offered annual memberships to community agriculture food box subscriptions.
Even with these strategies and benefits, 89% of employers surveyed report that recruiting and hiring has been a significant challenge in the past 12 months. And without replenishing the ranks, existing employees pick up the slack.
Employers stated that their workforce had to take on a larger workload, leading to burnout. This resulted in nearly two-thirds of respondents saying their workforce has asked for increased wages or benefits to compensate for their increased workload.
When businesses can’t hire, the cascading effect is seen in our economy. Two-thirds of employers reported that the inability to hire decreased their revenues with 13% of employers saying the hiring shortage led to a 5% decrease in revenues, 28% said it led to a 5% to 10% decrease, and 24% said it led to a decrease of 11% or more.
Small businesses are hit the hardest, with the greater percentage experiencing decreased revenues at higher rates. Of the regional employers who experienced decreased revenues, 65% were businesses with revenues below $5 million per year.
Decreased revenue not only impacts businesses small and large, but also the revenue they generate for state funds. Something we hope the 2023 legislators consider in housing legislation next year.
There are strategies that can help alleviate the lack of affordable housing. A collaboration of Central Oregon private, public and nonprofit sectors are working together to form a 2023 legislative agenda that can help increase inventory and bring down housing costs. It includes reducing barriers to building, increasing housing supply to mid-to-lower incomes, enhancing funding streams and expanding existing housing programs that improve and sync state and local efforts. But the path to resolving our housing shortage is long — as is the path to resolving our labor shortage.