It will not surprise anyone paying rent or a house payment in Washington County to hear that our area is less than affordable regarding housing. More and more households find themselves giving up a greater percentage of their monthly income to the cost of keeping a roof over their heads. We see it in the skyrocketing apartment and house rents. Also, we see housing prices that remain higher while the interest rates rise. This is not news.
Hearing that we rank among the least affordable places to have a home from an objective outside source like Money Geek Magazine and its research team should make us all take pause. In their list of the communities in the United States where the average family has been priced out of a home, we see 3 Oregon Counties in the Top 10- a distinction that means our livability is sliding and where we have a massive problem. Have a look at the Top Ten List:
| Rank | County | Metro area | Median household income | Median home price | Home price growth in the last 2 years |
| 1 | Placer County, CA | Sacramento–Roseville–Arden-Arcade, CA | $105,445 | $740,068 | 25.9% |
| 2 | Norfolk County, MA | Boston-Cambridge-Newton, MA-NH | $115,969 | $740,967 | 34.0% |
| 3 | Washoe County, NV | Reno, NV | $80,125 | $568,847 | 33.9% |
| 4 | San Joaquin County, CA | Stockton-Lodi, CA | $86,056 | $553,133 | 29.7% |
| 5 | Clackamas County, OR | Portland-Vancouver-Hillsboro, OR-WA | $97,419 | $639,349 | 33.4% |
| 6 | Solano County, CA | Vallejo-Fairfield, CA | $92,959 | $633,442 | 27.6% |
| 7 | Lane County, OR | Eugene, OR | $64,069 | $461,421 | 40.5% |
| 8 | Contra Costa County, CA | San Francisco-Oakland-Hayward, CA | $120,061 | $875,183 | 40.7% |
| 9 | Washington County, OR | Portland-Vancouver-Hillsboro, OR-WA | $98,906 | $598,213 | 25.8% |
| 10 | Essex County, MA | Boston-Cambridge-Newton, MA-NH | $92,413 | $650,959 | 30.2% |
You can read the entire report here with excellent graphics. https://www.moneygeek.com/mortgage/analysis/unaffordable-us-counties-for-homeownership/
The report is of Counties that have over 250,000 people. The list established that these Counties are “No Longer Affordable.” These are the Counties where Housing has become the most unaffordable in the past two years. In other words, these places on the list have, in the past 24 months, become the worst places to move in terms of total housing costs per household when established as a percentage of income.
On the list in the Top 10 in the Nation are Lane, Clackamas, and Washington Counties. Three of the least affordable places in the Country are right here, up and down the Oregon I-5 corridor. The report shows:
#5 Clackamas County Home Costs as a % of Household Income: 57.9%
#7 Lane County Home Costs as a % of Household Income: 63.7%
#9 Washington County Home Costs as a % of Household Income: 53.3%
So what is a healthy or affordable percentage of housing costs vs household income?
Here is one expert’s Opinion:
While the widely quoted “30% of gross income” rule is a good starting point for housing costs, it’s not a one-size-fits-all answer. Your ideal percentage depends on several factors like location, income level, family size, and financial goals.
Consideration is key. High cost-of-living areas might necessitate a higher chunk (maybe 40%), while living debt-free or saving aggressively might warrant a lower one (possibly 25%). Ultimately, strive for a balance that leaves room for other needs and financial aspirations without becoming “house poor.” Prioritize affordability and remember, flexibility is crucial in finding the housing percentage that truly fits your unique financial picture.
As a real estate broker of 43 years here in the valley, I can say that it has become more difficult. Our housing prices are staying high despite the interest rates more than doubling in the last two years. That means that the same home that could have been bought two years ago is now about 200% more per month to own/buy than it was. That is not sustainable. Yes, our homebuilders have provided incentives and some slight price negotiations. Existing home sales have sold, and sellers will negotiate some. We have seen about 5% price decreases in the past year or so, but that has not been enough to compensate for decreasing or slowing wages and rising inflation and interest rates.
Here is what FHA states are their criteria for making a home loan to home buyers:
Front-End Ratio (PITI Ratio): This compares your Principal, Interest, Taxes, and Mortgage Insurance (PITI) to your gross monthly income. The standard maximum for FHA loans is 31%. This means your PITI payment shouldn’t exceed 31% of your gross income.
In Washington County, the Money Geek report shows that a buyer now using some simple math may have to part with 53% of their household income to get a median-priced home. FHA says that the same buyer can not spend more than 31%. Some conventional lenders use a 40% number. But the report points out a simple fact that things have changed for the worse in the last two years here in Oregon in 3 key counties.
What Can Be Done?
Here are a few ideas:
- Interest Rates coming down will greatly correct this issue- which is driven by fiscal policy and bond sales. We hope for some relief there soon.
- Inflation is slowing- it costs a LOT to build homes, and our new homes lead our pricing higher and higher.
- Lowering Permit Costs– This is something we preach- they are very high here, which needs to change. $50,000 is not uncommon, and it has proven to be far too much.
- Land Development- In Oregon and in these 3 counties, I can testify 1st hand that it can take a minimum of 1 year and as long as two years to create lots for building upon. That is too long, and the systems we have in Oregon are broken. Many of us insiders believe they are now designed to slow housing production, and those in power are tone-deaf and uncaring about the process.
- Building Permits – Same thing. They take way too long to issue (4-6 Months) and are way too expensive, in my view.
- Urban Growth Boundaries– In Oregon, we heavily control where we can build and what. I am in favor of controls, but the intent of being thoughtful and careful about our surrounding areas has turned into a tight growth model that money interests have also perverted. The growth seems to go in the wrong places, and it is not enough. I do not know the solution, but I can tell you that we should make landowners bring creative and affordable proposals to the table as a precursor to getting into the growth boundary. As it is, every acre we bring sells for 700K to $1 Million per acre, which has doomed the process for anyone wanting a home.
- Increase Wages for all. This could fix that %, but making this happen takes time and jobs.
- Promote Infill options – Middle Housing, which could include backyard cottages and ADUs, easy land splits of oversized yards, and financial incentives to add units to existing properties, holds great promise. Cities like Hillsboro do not have policies in place to promote this important sector. In fact, there are very inequitable permit costs on the books in Hillsboro that charge the same for a 500 SF cottage as they do for a 5,000 SF home. These things must change and change now.
Governor Kotek threw down the gauntlet recently and stated that HOUSING was her #1 priority. She seems to care about this, and she better. Our Oregon and our lives depend on it. She may need to standardize rules that remove Cities from decisions that bias the outcome to weaker or more expensive homes, which seems to be driven by a NIMBY mindset. She needs to make housing as important to her and her constituents as the CHIPS Act was. If we are giving CHIP makers $300 Million for State money, then we need that much for a wide variety of housing incentives- not all of it can be got to house the homeless either because we need MORE UNITS, and we need them now! You can catch the next meeting at the Capital right here- https://www.oregon.gov/gov/policies/Documents/HPAC%20Agenda%2001.17.2024.pdf
What is your Experience? Are you struggling to have a home? How much of your income are you spending on housing? Weigh in below in the comments.
If you are lucky enough to have bought a home years ago and someone who has a 3%+_ mortgage, I am happy for you and think that is awesome. This discussion needs to focus on where we are now and where we are going as a community. These are BIG issues; we can not sit and hope they disappear. They will not.
I’m surprised that regulating/limiting Airbnbs and finding a way to descentivize house flippers isn’t on the list. As part of a couple who haslve been trying to get our first home, I have seen so many homes that were affordable in the past few years balloon in price because of those two issues. I am glad to see wage increases on the list tho, wages in the area have not kept up with surging costs of living.
You know what those things could be on the list. Hillsboro is trying to limit AirBNBs to one per person. They are illegal under most zoning. Instead of limiting them they should probably just be banned altogether except for homes in the commercial zones. Thanks for your input!!
As a state we seem to have a problem getting our priorities straight when it comes to housing. We can expand land use for industry (https://www.opb.org/article/2023/04/06/oregon-legislature-passes-bill-to-lure-semiconductor-investment/) but not for housing (https://www.kgw.com/article/news/local/the-story/kotek-legislature-land-use-affordable-housing-urban-growth/283-eaec74ee-2eed-4372-8cac-dae527f93274). We can recommend billions in new taxes (https://www.oregonlive.com/politics/2024/01/gov-tina-koteks-advisory-council-floats-possible-massive-tax-increases-to-meet-housing-production-goal.html) to support housing development and at the same time return billions to taxpayers (https://www.oregon.gov/dor/programs/individuals/pages/kicker.aspx#:~:text=For%20the%202021%2D23%20biennium,tax%20return%20filed%20in%202024) in the form of the kicker. We can say we need 36000 new housing units per year (https://www.oregonlive.com/politics/2024/01/gov-tina-koteks-advisory-council-floats-possible-massive-tax-increases-to-meet-housing-production-goal.html) but the state population has been decreasing (https://www.opb.org/article/2023/12/26/oregon-population-declined-for-second-year-in-row-according-to-census-data/#:~:text=Oregon's%20population%20went%20down%20by,%25%2C%20or%20about%2023%2C000%20people). I know we need to play catch up on affordable housing and I support that but 36K units per year in perpetuity when population is declining seems unrealistic.
I may be taking a simplistic view but it seems there’s a huge disconnect between what is said and what actually gets done.
Hillsboro just expanded the urban growth boundary by 1,400 acres for new housing in “South” HIllsboro. It is planned to include 8,000 new homes when finished with a mix of single family, townhouses, and apartments. We need both more housing and more industry and jobs to have a prosperous future in HIllsboro.
The kicker is one of the weirdest things I have ever heard of. We were pretty shocked when we moved to Oregon and the news started talking about the State giving tax refunds because they hadn’t guessed correctly what tax revenue would be over a 2 year budget.. It most definitely needs to go but I can’t see it happening. That would take a ballet initiative to change the state constitution and I doubt a majority of people will vote to not get money back every 2 years.
My Hillsboro housing experience:
In May 2014 my wife and I moved to Hillsboro because she took a job here. We sold our house in Helena, AL (exurb south of Birmingham)
The AL house sold for $150,000 and needed nothing. In the 7 years we owned it we replaced the roof, heat pump, all the floors, painted the exterior, remodeled the kitchen, and gutted / remodeled the master bath. Today that house is worth $270,000 according to Zillow or 80% more than when we sold it.
We rented here in Hillsboro for a year and then bought a house for $235,000. It was a fixer-upper with a 70’s vibe that needed a lot of updating / repairs. We spent $25,000 replacing the floors, furnace, hot water heater, exterior siding, and countertops / appliances in the kitchen. (We also spent MANY hours scraping that stupid popcorn texture off the ceilings – what were people thinking!) Zillow says our house is worth $428,000 today – or 82% more than when we purchased it. If you include the $25,000 we had to spend to fix the house it has increased 65%.
So it seems increased housing cost are more than a Washington County problem. Alabama does not have an urban growth boundary or any of the other things you mention. Building houses in Alabama is a free for all with almost no rules and developers buy plots of land at random and then just connect their new subdivision to the closest 2 lane road without any sort of urban planning. It is the classic case of uncontrolled urban sprawl.
Helena is a bedroom community for Birmingham. No industry, no real shopping or restaurants. 20,000 people leave town and return every work day on three 2-lane roads. Which is why it took my wife 45 minutes to commute 6 miles. Think North Plains but 6 times bigger and 5 miles from a 4 lane highway.
This is so horribly inaccurate. Affordable housing is a HUGE PROBLEM in Hillsboro and Washington County. The misleading words of this article leads to the lack of credibility of this publication. Shame on you
Debbie…
I am desperately trying to understand your comments. Did you even read the article? You seem to agree with the story and my reporting. So what gives? No…not shame on me. I report the truth and state the facts that are the reality we live in. Please give us the courtesy if an intelligent response. Thank you!
It’s Nike and Intel doing what Amazon did to Seattle.
When I graduated from HS in 2005 my now husband and I moved to Wilsonville. Our rent for a cute 2/1 apartment was only $525 a month. Free bus, nice library everything in walking distance nice middle low range starter houses and duplexes. Now with all the Gentrification the cheapest Apartments in Wilsonville are $1500+ and house prices are astronomical. Surrounding towns/cities are not any better. So in the next few years we will say goodbye to the Willamette Valley and move to Central Oregon.
What would help? Saturate the market with new, modest but well put together energy efficient apartment housing that a 1 bedroom can be paid for by a person working 30 hours a week at minimum wage without spending more than 30% of their income. Of the market is saturated then the price of housing will come down.
I live in Aloha, Washington County, and if my parents hadn’t bequeathed me the house I’m in, I’m pretty sure I’d be homeless. Just covering the utilities, property tax and insurance is hard enough on a fixed income.
My 27 yr old lives in a 1B/1b apt that’s closer to Hillsboro and hwy26 than I am and her rent is $1095. When she told me it blew my mind.
I’ve been looking at homes .com and zillow .com for a while now and I noticed the auto-filled-in percentage amount for mortgages went from 4.25% to 9.5%. That’s insanely high!
I don’t know how people manage to buy a home around nowadays, especially around here.
I agree with what the writer has observed and reported.
I am a retired 65 year old woman . I live on a fixed income quite a ways below the low income limit. I pay over half of my income to the rent of a small one bedroom apartment. Then they charge me separate for garbage sewer and water. Aside from that there is electricity which I am behind on Most of my food is off the food banks which makes it impossible to eat a balanced diet. All of my clothes are given to me from freinds or bought from the second hand stores which are now getting to expensive for me. What needs to happen is for the price of rent to come down and be locked in for the next several years. Let the wages catch up to the price of rent While us poor people struggle the property owners flourish The property owners do t even keep their properties up to quality for the renters money. Cabinets with peeling veneer in the kitchens and bathrooms are very common in rentals houses or apartments. Old warn carpeting is also very common. Flour trim made out of cardboard so when you go to clean it , it falls apart from the moisture wether Cleaner or water There should be a standard that property owners need to keep and the rent should be froze. That’s the only answer I see to bring the housing rent to affordable.
Thank you, Julie. Your response is a glinpse into the lives of many people in Washington County. A lot of peole live in great comfort here in our County, but just as many struggle like you do. We have children and grand children struggling and a godo portion of my income goes to help them. I hear from my friends and aquaintances all the time that they have similar struggles. I do not see anyway rents will be frozen- and I am so sorry your landlord has provided minimal care to your home. I wish I had a magic wand I could wave and make things all better. Hang in there…. Please.
It’s nice to see this experience articulated. Thank you! We were able to buy a home in South Hillsboro nearly three years ago when the interest was still quite good. In that sense, we were very lucky. As sellers, not so much. Last summer we attempted to buy our dream house but were unable to sell this one for the very reason you detailed so well in your article: the house that costs us $3,000 a month to live in today will cost a new buyer more than double that. Staggering, isn’t t it? And, as you also mentioned, wages aren’t keeping up with the high cost of living. Homeowners are buring the candle at both ends. Frankly, we are not sure whether losing the dream home was a blessing or a curse. In this economy, who knows what would have happened had we made that leap. So, dream deferred (hopefully not to dry up like a raisin in the sun). Making ends meet in this area is the current dream.
Kathi; Thank you! So I am Real Estate broker and housing expert full time. I have spent 43 years doing this work and am more involved in land use and housing than anything. So what are you doing? Keeping the home I assume? How do you view the future and what are your plans? I think you and many others- thousands of others, are now trapped in your homes. And sort of needing to not move up or out or down. This puts a hold on anyone else getting yoru home. This marekt we are in was built in terms of values by 3% money. Keeping the values where they are is hard- and having enough homes is hard- so very very hard! SO what is next for you? Your voice is an important one- so THANK YOU!
Gratefully;
Dirk Knudsen
The variety of housing is another problem. In general, the population of the U.S. is aging. What comes with aging: decreased mobility, specifically, the ability to climb stairs. But, most of the new housing built in this region is multi-story single-family homes, townhouses, and condos, making it nearly impossible to downsize from a larger home, even if one can afford it. Most multi-level condo buildings with “flats” don’t have elevators. The few single-story homes on small lots and condos available are sold for a premium. And, not all seniors want to live in an overpriced, institutionalized “retirement community” that takes your life savings at move-in.
I live in a single-story home (about 1300SF) on a nearly 1/4-acre lot in Hillsboro. I’m about 8 years away from retirement, and would like to downsize to a smaller single-level condo with an attached garage to eliminate the mortgage as well as the costs associated with maintaining a yard (especially the water bills!). Whenever one comes on the market, it is gone by the time it makes the RMLS listing! I realize there are more options in Portland, but who wants to move to Portland given the current state of that city (drugs, crime, vagrants, high taxes, and a dysfunctional government).