Item A: Envision Eugene - Housing Mix and Industrial Lands

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Eugene needed housing density and mix ECONorthwest Page Department of Housing and Urban Development’s (HUD) affordability guidelines. About one-fifth of Eugene households could not afford a studio o apartment at HUD’s fair market rent level of $495, and one-third of households could not afford a two-bedroom apartment at HUD’s fair market rent level of $760. A household earning median family income ($55,500) could afford a o home valued up to about $138,750. The implications from the preceding analysis are, in our opinion, unequivocal: the needed housing density and mix for new housing is different than the actual housing density and mix. In short, the affordability gap described above (e.g., cost burden for renters or owners, as well as the affordability gap for households making 50% less than the median income) implies that Eugene needs to shift towards higher densities and more multifamily housing types, which are typically more affordable because land costs are lower and service costs for multifamily arespread out over multiple units. While the City will not be able to fill the housing affordability solely through land use policy, the residential land use strategy will need to create opportunities for development additional affordable housing. The implications of Eugene’s housing affordability gap on needed housing density and mix are: The City will need to provide opportunities for additional affordable housing; this will require planning for more multifamily dwellings of any type. The City can, to some degree, influence housing costs by requiring higher housing density, which will reduce the amount of land needed per dwelling. 4 The City can affect single-family housing costs by developing policies that allow or require building single-family units on smaller lots. 5 Table 1 shows Eugene’s needed density and mix for needed new housing between 2011 and 2031 based on these factors. Table 1 shows the following changes between the needed density and mix and the ECLA Baseline: There are limits to the amount that increasing housing density can increase housing affordability. Housing that 4 requires less land is generally more affordable. The affordability of multifamily housing depends, in part, on the construction techniques and materials used to build the structure. For example, multifamily structures that are less than four or five stories tall are generally wood-framed structures and are generally less costly than multifamily housing taller than four or five stories, which are generally steel-framed structures. With respect to single-family housing, land accounts for a higher percentage of the overall cost, but does not 5 account for the majority of costs. For example, a lot valued at $50,000 might have a home worth $250,000; the land accounts for 20% of the total value of the dwelling. A recent study by the Lincoln Institute of Land Policy indicates that land accounted for 26.8% of total home value in Oregon during the first quarter of 2010 (http://www.lincolninst.edu/subcenters/land-values/metro-area-land-prices.asp) PC AIS, p11