1,500 new apartments on the way in Bend

New plans for apartment complexes in Bend submitted this year bring the total number of proposed units in a rental-starved market to more than 1,500.

However, most of those applications remain on the drawing board, or in some phase of plan review at the city Community Development Department. Two projects are under construction and a third, a public housing project, opened its doors to tenants this summer.

One project, filed by Monte Vista Homes, would erect a five-building apartment complex of 136 units on Empire Avenue. The developer, SGS Development, of Bend, in August applied for five building permits for the project, valued at nearly $17 million. A company representative did not return calls seeking comment.

Other projects have shown little progress beyond the first meeting with city planning staff and would-be neighbors.

“We still expect many of these (builders) to submit an application and move forward,” Aaron Henson, senior city planner, said Wednesday. “It doesn’t seem they’re moving forward as quickly as we expected to address the housing shortage.”

Applications to build apartment complexes rose from nearly nothing between 2004 and 2013 to about 1,000 units proposed in the past 1½ years, Henson said in June. Applications for more than 500 more have been filed in the last few months.

The surge in applications is still lagging behind the demand for new rental housing. The Central Oregon Rental Owners Association annual spring survey of rental vacancies and average rents in Central Oregon found an overall vacancy rate of 1.6 percent for large apartment complexes in Bend and 1.4 percent for those with five units or fewer.

The numbers still apply for units of about 1,000 square feet, said Kevin Restine, general manager of Plus Property Management and an association board member. Above that size, and above rents of $2,000 a month, the market has “gone quiet,” he said. Below that, demand is still urgent and rents have climbed, he said.

Properties that rent for more than $2,000 are less in demand for an obvious reason, Restine said: “Folks that can afford those things have probably moved into the purchase market.”

The average rent — the sum of all rents divided by the number of rental units — in spring ranged from $909 a month for a three-bedroom apartment to $682 for a studio, according to the association’s annual survey. A two-bedroom apartment in Bend could be rented for an average $793 to $847, depending on size and age of the unit, the survey found.

In September, Apartmentlist.com, a website that collects apartment vacancy notices from around the country, reported median rents for a one-bedroom apartment in Bend stood at $960, and for a two-bedroom, $1,200. Bend ranked below Portland but above Eugene and Salem in terms of monthly rents in Oregon.

Bend is a relative value compared to other areas outside the state, particularly in the West and Northwest. Cities on the coasts are the most expensive; the top 10 cities with highest rents are on the Eastern seaboard, California and the Pacific Northwest, wrote Andrew Woo, an Apartmentlist.com data scientist, in the firm’s September 2015 National Rental Price Monitor.

Restine agreed that rents in Bend are rising just as they are in cities cited by Apartmentlist.com such as Portland and San Diego . Landlords are raising rents to recoup investments they made in properties they bought just prior to the Great Recession, which left them underwater and renters harder to find.

“I don’t get a sense it’s motivated by greed at all,” he said Thursday.

The leasing slowdown in properties priced at $2,000 a month and more may indicate the start of an overall market slowdown, he said. Still, renters in the mid-range are feeling a pinch, he said, and some are looking for roommates to share costs. Bend, for many workers, is still a tough place, financially, and people keep coming, which drives further competition for affordable housing.

“In our properties, we normally have no vacancies,” said Julie Benson, project specialist for Housing Works, the public housing authority for Central Oregon. “It’s nowhere near a (normal) 6 or 7 percent vacancy rate. For one property in particular, our wait list is closed.”

Housing Works’ latest project, The Parks at Eastlake, a 40-unit addition to its Eastlake Village on NE Bellevue Drive, opened in early September, is already leased to capacity. Epic Property Management, which oversees the property, in June received more than 200 applications for the apartments, Benson said.

Another apartment project, Boulder Pointe, now under construction on NE Warner Place and Boyd Acres Road, could open for leasing by January, said Angie Graves, regional manager for J.K. Management, of Wilsonville. Plans there call for 96 units.

“We generally make affordable, basic (apartments), so they’re not going to be a luxury community,” Graves said. “We’re trying to stay mid-range, not top of the line, with granite countertops, but yet we are picking finishes and trying to stay with trends.”

She could not immediately estimate the rent for Boulder Pointe, but said the company typically offers month-to-month contracts and caps its rent increases at $50 a year. J.K. Management; the builder, Kohl Inc.; and the developer, KWDS LLC; are all one family, she said. The rent is based on rental surveys of the area and the cost to finance the building loan, Graves said. This is the first project for KWDS in Bend, she said.

In northwest Bend, nine apartments are going up on Debron Lane, near Central Oregon Community College, a job valued at about $1 million, according to a city building permit issued in June. The property owners, Sean and Crispin Fievet, expect to lease the units by May, Sean Fievet said.

“They’ll be a notch above the basic apartment finishes,” he said Thursday.

Students are the target market for the two-bedroom, townhouse-style units, Fievet said. Rents will run about $1 per square foot, or from $865 to just over $1,000, he said. The entire project measures just under 10,000 square feet, he said.

In southeast Bend, BPM Real Estate Group, of Portland, is developing nine apartment buildings, 228 units total, in two phases called Seasons at Farmington Reserve on Alstrup Road. Formerly known as Aspen Reserve, the project will cost an estimated $35.5 million to build, according to an email Friday from the company. Site preparation for the first phase, six buildings and a clubhouse, is underway and should be complete in 2016. Apartment leases are expected to range from $650 to $1,350 per month, according to BPM.

The remaining apartment projects in the development pipeline are in various stages. Building permit applications are under city review for a 208-unit project on NE Linnea Drive and a 153-unit project on Bellevue Drive. Developers of another nine proposed projects have not yet submitted formal plans, according to Henson.

— Reporter: 541-617-7815, jditzler@bendbulletin.com