Can housing ever be affordable in Sisters?

There is considerable conversation and consternation about the lack of affordable housing in Sisters. This was never more evident than three weeks ago when close to 200 citizens gathered at three overlapping meetings in town.

One, a Planning Commission public hearing, was somewhat vocal. Opposition was front and center toward a planned 13-acre housing development at Highway 242 known as Sunset Meadows that could have in excess of 200 dwelling units. A deputy sheriff was posted outside Council chambers as a precaution, the subject being that contentious.

Over at the fire station, in the Community Hall, much of the evening’s homeless forum included references to the lack of affordable housing contributing to a rising houseless problem. And at the high school, planners from Deschutes County held an open house to review their 2040 Vision Plan, with affordable housing in the mix of topics and breakout discussions.

For starters we need to have a common definition of “affordable housing.” Affordable housing is defined by the federal Department of Housing and Urban Development (HUD) as a dwelling that a family or household can obtain — whether through rent, purchase, or other means — that costs 30 percent or less of the household’s income. This metric looks at the cost of residing in the dwelling, including utilities.

Another metric often cited by housing advocates refers to any type of housing made affordable for low-income individuals or families through government subsidy or incentive.

The formula is bogus, housing experts say. If you’re making $200,000 a year, 30 percent is not an issue. If one’s income — individually or jointly — is $75,000, then you can’t make the 30 percent threshold and afford to live in Sisters.

Even if you could find a $300,000 home — even if you needed no dotwn payment — your monthly mortgage at today’s rates (7.08 percent) makes your payment $2,012 or $24,144 a year or 32.19 percent, putting you over lenders’ limits.

As of Sunday there were two traditional apartments for rent in Sisters, one on N. Brooks Camp Road: two bedrooms, one bath, 900 square feet for $1,350/month. And a one-bedroom, one-bath 572- square-foot unit for $1,175. The only other four rentals were all homes ranging from $2,550 to $6,000.

Somebody earning $20/hour, $41,600/year couldn’t qualify for the Brooks Camp unit, as 30 percent of their income would be equal to only $1,040/month. To qualify, they’d need $54,000 in income, $26/hour for a single wage earner.

One point on which all participants in the conversation seem to agree is that, in a city the size of Sisters with a smaller budget, there is no money for subsidizing any kind of housing. Nor does the City own any significant land holdings, the largest being its public parks, and nobody appears to be asking that they be rededicated as subsidized housing.

“Do people just forget the basic laws of supply and demand?” asks Mark Weldon, a small framing contractor in Bend who works mostly in Sisters.

“Sisters is landlocked,” says mortgage broker Tina Wilcox. “You’ve got less than two square miles and very few, almost no saleable lots left.”

Neal Wagner, an appraiser, said: “Why are people even talking about this in Sisters? I recently appraised a small lot in Sisters, just a little over a quarter acre for $237,500.”

His question is at the core of the problem: the price of land, “dirt” as it is called in the trade. In August, a lot in McKenzie Meadows Village sold for $255,000 — the lot, no house on it, in what is supposedly a more affordable neighborhood.

In July, a 7,405-square-foot lot on Timber Pine seemed like a bargain at $200,000.

Builders tell The Nugget that they can still build houses in Sisters for as little as $200 per square feet, maybe a tad under. That would be plain vanilla construction, few amenities, and lower-end fixtures. So a small home, say 1,100 square foot, could be built for $220,000 — on top of the cost of the “dirt.” A 900-square-foot bungalow would only take $180,000 plus the land, ballooning that $180 to at least $400,000. That, like it or not, is as affordable as it’s going to get.

The dynamics are the same for building out apartments. The “dirt” is the same or more. And the construction per square foot is often higher because of the added requirements for multi-family buildings, like sprinkler systems, EV chargers, bike racks, fenced trash areas, etc.

Sisters is expensive in other ways. The cost of living overall is 38.2 percent greater than the national average. And 24 points higher than Oregon overall. Transportation and utilities are less than both Oregon and nationally. Health care costs are nearly the same as at the state and national level. But housing?

Ouch.

The median home cost in the U.S. is $291,700. In Oregon it’s $438,100, and in Sisters, $681,400, all numbers according to widely available data.