Housing prices across Oregon have skyrocketed in the past two years — and rural communities are not immune. Here’s how one town is adapting.
For Mandy Jarrell, bartender at the Bohemian Club — a wood-furnished, saloon-style tavern in the city of Sweet Home with nearly 100 years of history — the last two years have brought a lot of new faces.
Mandy Jarrell, bartender of the Bohemian Club. Photo by Jason E. Kaplan.
“We get a lot of retirement folks — people coming up from California who like the slower lifestyle and the smaller community,” says Jarrell, who attributed some of the bar’s recent financial success to the new arrivals.
“Things are definitely starting to pick back up from the COVID era.”
She gives me a wooden token, good for a free beer, for a promise that I would return to Sweet Home this summer for the Oregon Jamboree, the largest country-music festival in the state, which takes place annually in the city at the end of July. The Jamboree, which has always brought a friendly crowd of tourists in recreational vehicles, will feature two stages, with Trace Adkins and Miranda Lambert among the featured performers.
On February 8, Linn County commissioners auctioned off the 160-acre Weyerhaeuser and Willamette Industries lumber mill site to Sweet Home Real Estate Restorations LLC, a developer with plans to revamp the site into restaurants, breweries and a new venue for the Jamboree, which would let the city host music events year-round. The partially collapsed facility had been abandoned for more than 10 years, but recent economic activity has generated new interest in the site.
Former mill site slated for redevelopment. Photo by Jason E. Kaplan
In 1978, 81,400 Oregonians — 10.2% of the workforce — worked in lumber mills. By 2016 that number had fallen to 29,000 according to the Oregon Office of Economic Analysis — 1.9% of Oregon workers. In the early 1980s, the industry underwent an abrupt downturn whose effect on mill towns like Sweet Home was brutal. A 1982 New York Times story reported that the number of people employed in mills was 54,500. At that time, the unemployment rate in Sweet Home was 17.1%, compared to 10% in Portland, 11.4% in the state as a whole — and 8.5% in the U.S.
The problem, the Times reported then, was that a sluggish housing market reduced the demand for wood. The following decades saw further shifts in the timber industry, fueled by both globalization and tightened environmental regulations.
Now the housing market is white-hot, and the unemployment rate is far lower than it was during the 1980s slump. But residents of the former logging town aren’t necessarily out of the woods.
The median sales listing of a home in Sweet Home was $240,000 in January 2020, according to Realtor.com. In January of this year, it was $315,000 — a 31% jump in just two years. A statewide assessment from Zillow shows an overall home-value increase from $373,000 to $492,000 during the same period — also a 31% climb.
Sweet Home’s unemployment rate is now on pace with the rest of the state, but incomes are not. By December of last year, just 4% of people in Linn County, where Sweet Home is situated, were out of work — a hair lower than the state unemployment rate of 4.1%. The per-capita income in Sweet Home in 2019 was $20,048, compared to $33,673 in the state, according to U.S. Census data. Eleven percent of Oregonians live in poverty, relative to 20.7% of Sweet Home residents. So while median home prices in the city are still lower than the state median, they’re spiraling to a level well out of reach for the average resident.
Perhaps not surprisingly, the rate of homeownership in Linn County, 54%, is lower than that in the state as a whole (62%).
Rents in Sweet Home are also climbing to big-city levels: Median gross rent in Sweet Home was $934 in 2019, versus $1,110 in the state. The Oregon Emergency Rental Assistance Program, created to assist low-income renters affected by the pandemic, paid $282,492,184 in rent and utilities to households in 2021, including $7,093,001 to Linn County, where Sweet Home is located.
And Sweet Home is not unique in this regard. The housing crisis is no longer a problem limited to Oregon’s major cities, nor even to areas like the Coast or Central Oregon, where the proliferation of vacation rentals has created a housing crunch for long-term residents.
New development in Sweet Home including model house. Photo by Jason E. Kaplan
“Virtually every community is having a housing shortage to some degree,” says Claire Hall, a Lincoln County Commissioner and the chair of the Oregon Housing Stability Council.
“Tenants in rural Oregon are facing a true crisis, not unlike what’s going on in the rest of the United States — and we may not even be aware of exactly how bad it is,” says Kim McCarty, executive director of the Community Alliance of Tenants.
McCarty says official numbers may not show the full scope of the crisis facing rural Oregonians. Residential data do not always show how many people are doubled up in a single place of residence. Likewise, official court documents do not record tenants who leave their properties before officially getting evicted. Years of underemployment and loss of income make rural tenants increasingly vulnerable to housing-market shock, like the current one.
Data on the rate of homelessness in an area can come from a couple of different sources. Every two years, the Department of Housing and Urban Development requires cities or counties to conduct a point-in-time count of people sleeping on the streets or in shelters in order to receive certain types of funding. Schools also collect data and report it to the Department of Education. The latter can include situations like those McCarty described, as well as families who may be living in hotels or in vehicles. Oregon Housing and Community Services presents both data sets on its website. In Linn County, an estimated 1,332 people — or 6% of residents — are experiencing some form of homelessness, with 64% of children doubled up in a residence intended for one family. The rental vacancy rate is 4.8%, according to data compiled by the real estate information company CoStar and published by OHCS.
“Better data collection is certainly required, but we just need to open our eyes to see the housing just isn’t there for all the people,” says McCarty. “The needs of these people are various, and we need different, flexible kinds of funding streams that can respond quickly, so that we can meet the needs of these communities.”
Rural counties are also seeing the most new investment. According to a study by financial tech firm SmartAsset, Linn County saw $111 million in GDP growth in 2021, the fourth in the state, behind Deschutes, Crook and Marion counties. A 2021 report from the Oregon Center for Public Policy found wages, especially in rural communities, had been unable to keep pace, and that “household survival budgets for rural Oregon counties were 6 to 13 percent lower than the survival budget for the state as a whole.”
Blair Larsen, Sweet Home’s director of community and economic development. Photo by Jason E. Kaplan.
Blair Larsen, director of community and economic development for the city, says improving the quality of life for residents means easing the housing shortage by building new units. He’s not alone: A report prepared last year by ECONorthwest says the state has underbuilt housing in recent decades and now needs 110,000 more homes to keep up with demand.
In Sweet Home, that means building more apartment buildings, but also building out more utilities, like sidewalks and sewage systems, so new units can be built.
“It seems obvious, but the best way to ease the housing shortage is to get more housing built,” says Larsen. “We’re seeing more attention from builders now, as well as a wider variety of housing types than we used to.”
Larsen always enjoyed playing SimCity — a video game that lets players build cities from scratch — as a kid. He says he’s excited by all the new developments currently underway in the city. But, he adds, there are many more infrastructure projects in Sweet Home than the city currently has the manpower to handle.
Larsen has requested funds from the Infrastructure Investment and Jobs Act and the American Rescue Plan Act to add more high-speed internet options to the city, in a bid to attract more people.
The city is currently undertaking a housing-needs analysis project, a 20-year planning document intended to tell the city what it needs to do to meet the future demand for housing and to keep it affordable.
“Most cities use projects like this to support an urban growth area expansion, which Sweet Home doesn’t really need,” Larsen says. “We’re mainly interested in making sure we have the right mix of housing densities to meet demand and make housing more affordable.”
At the state level, addressing the housing crisis is “challenging, to say the least, but I think the momentum is there,” Hall says. ”I wouldn’t have said that, say, five years ago, but now it definitely is.”
In addition to distributing emergency housing funds, Hall says the state is close to meeting its five-year goal of building 18,000 new homes — both single-family and apartments — and has created more incentives for building low-income housing. In 2020 the state created the Local Innovation and Fast Track rental program, which provides funding for development of low-income rental housing and can be coupled with extant low-income housing tax credits. She is hopeful that it will spur further development in the state, particularly in rural areas, which developers have not found financially attractive in recent decades.
“I think we reached a point a long time ago when it was not economically feasible for developers to build low- and moderate-income housing without some kind of subsidy,” Hall tells Oregon Business.
For real estate agent and Sweet Home native Karla Hogan, the hot housing market is an opportunity to rebuild her community — and hopefully make it stronger and more vibrant than it was before.
Hogan drove me past a street with mobile homes on cinder blocks and single-story houses with mossy roofs and overgrown yards on the way to Canyon Creek Estates, a contemporary subdivision with new sidewalks, brick mailboxes and roomy two-story homes in muted colors. Hogan says she’s sold multiple units there to new homebuyers in recent months; a Zillow listing for one house in the neighborhood says it sold in July of last year for $380,900.
Hogan described Sweet Home as a former bedroom community now coming into its own, on account of an influx of new residents who can work from home.
“I get a lot of people calling and asking about Sweet Home just because they like the name,” she says. She’s smiling, but she’s not joking. (The origins of the town’s name are unclear. Author Lewis McArthur writes in Oregon Geographic Names that before the Sweet Home post office was established, the town was briefly called by the much less charming name “Buckhead.”)
We drove to a second site still under construction, where she showed me another planned housing development. She saw me looking at a cluster of rusty, run-down trailer homes sitting across the street from the development and was frank about the town’s housing challenges.
“Nobody should have to live like that,” she says, with frustration in her voice. “I wish this was something people would think about when they talk about building more low-income housing.”
Hogan says the 2008 financial crisis hit her business, and Sweet Home in general, particularly hard. A 2017 report from the Oregon Employment Department found rural parts of the state lagged significantly behind metro areas in terms of job recovery, particularly among high-income earners.
Hogan thinks of selling real estate not just as a job but a way of ensuring a bright economic future for her city, and for her daughter.
“I’m so afraid of things going backward,” says Hogan, as she takes me to meet Virgil, one of the two horses at her ranch-style home. I also met her donkeys Levi and Strauss, and Prada, her miniature cow.
Hogan notes that buyers looking to move to rural areas usually look at multiple different cities when deciding where to live, including denser Lebanon and Albany — so it’s her job to sell the city, not just the property.
Apart from the memorable name, she says Sweet Home’s selling points are the natural beauty of the area and easy access to outdoor activities like fishing and kayaking. The town currently has just two sit-down restaurants — there were more before the pandemic hit — and few other cultural amenities, save a movie theater. Hogan hopes the influx of new residents will revitalize the town and bring more amenities.
The new demand won’t last forever, but for now, it’s a good time to be a real estate agent in rural Oregon.
“When the COVID-19 pandemic started, I thought everyone was going to hunker down and things were going to cool off for a while. But it’s actually had the opposite effect,” Hogan says. “If a property has been on the market more than a few months, it’s because there’s something really wrong with it.”
Eric Lund, general manager at Axiom Engineering Group. Photo by Jason E. Kaplan.
Eric Lund, general manager at Axiom Engineering Group, is bullish on the city’s future. His company finished construction of the city’s first apartment complex in 30 years in August of 2021. Within two months of the building’s completion, the complex was 100% occupied.
In the early 2000s, Lund’s father began development for a housing project in Sweet Home. The deal stalled and the plan was abandoned. Lund eventually bought the property back and finished the units in 2019, which he describes as one of his greatest accomplishments.
“It was a really slow process because nobody believed in Sweet Home too much back then,” Lund says.
Now that the Sweet Home housing market is booming, Lund wants to strike while the iron is hot. He is currently developing land for self-storage units, a light-industrial building, and a park of RVs and boats all within Sweet Home’s limits.
Thomas Baham, owner of the Rio, Sweet Home’s only movie theater, sold his home during the pandemic to keep the cinema afloat. The seller’s market meant a strong sale, which, in conjunction with support from the community, helped the Sweet Home theater survive the pandemic.
Thomas Baham, owner of the Rio. Photo by Jason E. Kaplan.
Like Portland’s Living Room Theater and Eugene’s David Minor Theater, the Rio now allows guests to be served and eat dinner at their seat as they watch. The Rio doesn’t have a kitchen, so Baham has partnered with local restaurants to cater the dine-in events. He says they have sold out every time they are offered, in part because of the town’s new arrivals.
“I usually feel like a bartender because I know everyone in town, but this year has been unbelievable,” Baham says. “Now, on a busy weekend night, I would say half of the people who come are regulars and half are new faces.”
Some things in Sweet Home will never change. Despite the influx, the Bohemian Club still won’t serve hard alcohol, a tradition dating back to its days as a loggers’ bar.
“It keeps things nice and laid-back. We have lovely people and a friendly bar. We don’t have to deal with all the drama,” says bartender Mandy Jarrell, as she and other locals recall wistfully the town’s logging history.
“At one point there was a bar for every church in this town,” one bar patron tells me between drafts of beer. With the town’s new residents and new economic activity, I ask if he thinks it will ever be that way again.
“I don’t think so,” he says wryly. “We got a whole lot of churches.”
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