HOUSING IS A MATH PROBLEM
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SOLVING THE HOUSING EQUATION
At Partners for Affordable Housing, we’re committed to educating Oregonians about the factors that drive up housing costs and solutions to the puzzle that bring costs down.
Think of housing as a math problem. A string of variables that currently add up to high costs that are out of reach for most Oregonians.
But tinker with one variable here, one variable there and all of a sudden the end result becomes prices that pencil out.
The variables that add cost are things like land prices, labor and supplies, and fees. The variables that bring costs down are things like increased densities, removal of design standards and shorter approval times that reduce interest fees.
We have the power to change the equation on housing–we just need leaders ready to do the homework and put their name on bold solutions that transform the outcomes.
THE MATH IS SIMPLE: SUPPLY = AFFORDABILITY
Housing is a math problem—and the numbers in Oregon are just not penciling out. We don’t have enough homes for the people who live and work here. That’s why Partners for Affordable Housing supports Governor Kotek’s goal of building 36,000 new housing units each year for the next decade.
The problem is clear—demand keeps rising, but supply hasn’t kept pace. To fix this, we must take policy actions that add up to real results. Solving Oregon’s housing crisis isn’t just a policy goal—it’s basic math. If we want affordability, we need more homes. Our coalition is working together to support practical solutions for increasing housing production and lowering costs.
Affordable vs affordable
Let’s get clear on our terms. With hundreds of thousands homes needed in the next 10 years alone, we can’t subsidize our way out of this crisis. We have to stop focusing on Big A affordable and start solving for Little a affordable. Read on to learn the difference!
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Big "A" Affordable Housing refers to housing that is subsidized or regulated by government programs to ensure affordability for low- to moderate-income individuals and families. This type of housing typically includes income restrictions, rent caps, and eligibility requirements. Examples include public housing, Low-Income Housing Tax Credit (LIHTC) properties, and HUD Section 8 housing. This housing ensures all income earners are part of our communities even when market rates are high.
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Little "a" affordable housing refers to housing that is naturally affordable to diverse income earners in the private market, without government subsidy or regulation. This can include multifamily homes, apartments, ADUs, condos, and single family homes. More affordable prices occur when construction costs are more affordable. State and local governments can play a large role in lowering the cost of market rate homes through land-use regulations, fee structures, housing approval processes and innovative partnerships that help get homes built more affordably.
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Explore more affordable housing definitions in this glossary from Seattle-based Housing Development Consortium.
THE MATH EQUATION:
WHY PRICES ARE SO HIGH AND PRODUCTION IS SO LOW
Affordable housing is essential for healthy, inclusive communities—but building it is more complicated and expensive than it may appear. Below are some of the biggest challenges that developers, nonprofits, and municipalities face in keeping Central Oregon home prices low and housing production high.
Land
The rising cost and limited availability of land are significant barriers to affordable housing. In Bend and Central Oregon, land is often priced at a premium, making it difficult for developers to build homes that are affordable to low- and middle-income families. While there are available lots, related infrastructure costs, zoning, density guidelines, and land-use policies further limit where affordable housing can be developed. Additionally, there is concern that public lands that are currently open spaces could be reallocated for housing development instead of parks.
​Materials
Building materials have become increasingly expensive due to global supply chain disruptions, inflation, and trade tariffs. Essential components like lumber, steel, and concrete often fluctuate in price, creating uncertainty in project budgets and making it difficult to keep projects in budget. Tariffs on imported goods raise costs even further, particularly for developers relying on foreign-sourced materials to keep expenses low.
Labor
There is a nationwide shortage of skilled construction labor, and affordable housing projects are particularly vulnerable to its impacts. With fewer tradespeople available, developers must pay higher wages and face longer timelines. This shortage leads to increased overall costs, reduced efficiency, and, in some cases, delayed or canceled projects—all of which hinder the delivery of affordable homes.
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When the construction workforce is stretched thin, it results in longer timelines and higher costs. Developers may have to offer premium wages or face delays, which increase carrying costs such as loan interest and overhead. These added expenses are passed on to buyers or renters, making homes less affordable.
​Fees
Development fees imposed by local governments can add tens of thousands of dollars per unit to a housing project and make them less viable. These include:
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Infrastructure. Affordable housing developments often require significant investment in infrastructure such as roads, water lines, sewer systems, and power grids. These costs can be prohibitive, especially in areas where infrastructure is outdated or nonexistent. Without subsidies or government partnerships, developers may avoid projects altogether.
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Permitting fees. Permitting processes are not only time-consuming but also expensive. Every required permit—from environmental reviews to building inspections—comes with a price tag. These fees can delay projects and reduce the feasibility of affordable housing, especially for smaller developers with tighter margins.
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Tree code requirements. Municipal tree codes, while important for environmental preservation, can add complexity and cost to affordable housing developments. Requirements to preserve existing trees or plant new ones can limit buildable land area, require specialized site plans, and increase landscaping expenses. These rules, though well-intentioned, can inadvertently hinder housing affordability.​
​Cost of Capital
Securing financing for affordable housing projects is increasingly challenging. Interest rates, lender risk assessments, and equity requirements all impact the cost of capital. Higher borrowing costs reduce a developer’s ability to finance projects or force them to cut back on amenities, size, or units—compromising affordability.
​Profit
Affordable housing projects typically yield lower profit margins compared to market-rate developments. With high risks and complex requirements, many private developers are hesitant to invest without strong incentives. To make these projects viable, public-private partnerships and creative financing solutions are essential.