What's behind the housing shortage?
The Oregon Office of Economic Analysis staff published some of its findings recently on why there is a housing shortage.
This report looked at home builders' confidence levels or appetites for risk; the construction labor supply; land supply and land use laws; the availability of "shovel ready" lots; and financing standards.
Economist Josh Lehner said in his blog that Oregon is not alone when it comes to a housing shortage.
Lehner said, "It is unlikely that the lack of builder confidence is what is really holding back the market."
He said the labor supply issue is felt across all sectors, not just the construction industry and is part of the current tight labor market.
Lehner said, "I do think land use laws impact overall prices here in Oregon. I just do not think they are a primary contributor to what has taken place in the past five years. Again, the fundamental housing problem is not Oregon-specific."
The report also looked at the supply of buildable lots, which appears to be in short supply nationwide.
Lehner said when it comes to the finance world, "Overall credit availability is a good news - bad news story. The bad news is that builder lending volume is considerably smaller today. It takes a lot of time, effort and money to take a piece of dirt, get entitlements, put in roads, utilities, and the like. The dearth of this activity during the bust, for some understandable reasons, has put a wrench in the development process of bringing new supply to the market. The good news is that the volume of lending has been increasing at double digit rates for the past three years. The flow of credit has returned. Our office's main housing advisor has been saying that we can expect to have a single family building cycle, that has just been delayed a long time."
To read more of Lehner's blog, click here.
WEA will also be leaning into the housing issue more during a special "WEA Housing Month" in June.