Pedro Fonseca was confused when his partner, Miriam De Padua, suggested they move to Bend.

It seemed like an island — a small town of 100,000 people separated by miles of forest and desert from any other population center.

Fonseca, 39, lived in San Antonio, Texas, a metro area with more than 2.5 million people.

De Padua, 44, lived in Guadalajara, Mexico, an equally massive urban center. The married couple of 15 years were both born and raised there.

It only took one visit to Bend for them to be convinced. There were many things they liked. Everyone was friendly. It was calm and safe. Nothing was farther than a 15-minute drive away. It had good air and water quality. They loved the snow.

The average home price was under $400,000, and buying a home one day seemed possible.

They went through the immigration process, and moved to De Padua’s brother’s house in Bend.

But by that time, a new reality had set in. Shortly after the move in July 2023, Bend’s median home price hit a record high of $800,000. That number has cooled slightly since then, now down to $714,000.

“I thought it was going to be mission impossible to have a house,” Fonseca said.

The couple was not alone in their appeal to Central Oregon, the fastest-growing region in the state. In the last two decades, Bend’s population jumped by more than 50,000 people.

It’s expected to grow by another 50,000 by 2045, to nearly 160,000.

Housing is an increasingly ominous — and common — concern for newcomers and people already living in Central Oregon. The scarcity of housing is apparent across the United States and Oregon. Owning or renting a home is increasingly out of reach even for people with average incomes. Compounded by national economic factors and a historic lack of home building, prices shot up as rampant population growth put unrelenting pressure on limited supply of homes.

Homelessness has risen, and most households are feeling the burden of higher housing costs.

Housing issues took center stage during city council, state and presidential races this election season, while local organizations and developers are working on creative solutions to the problem.

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“I think there’s now a different recognition at every level — local, state and federal — of how much of a challenge this is to the population,” said Lynne McConnell, outgoing director of the city of Bend’s housing department. “That to me looks like an opportunity. There are different people engaging in this discussion and paying attention differently. People recognize the effect that it has on our economic climate and our community’s ability, generally, to thrive.”

Good jobs can’t buy houses

Earning money in Bend hasn’t been a problem for Fonseca and De Padua. De Padua, who has a college degree in logistics, has been working for a year as a manager at Walmart. Fonseca has worked a variety of remote jobs in the tech industry.

According to the city’s urban renewal agency, only 16% of households in Bend can afford the average cost of $4,700 per month for a mortgage. A little more than half of households in Bend can afford market-rate rent, which requires an income of at least $72,000 a year. The average rent for a single-bedroom apartment is $1,800 per month.

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Finding an affordable home is often difficult in Central Oregon

City data shows many people are choosing to live in Bend anyway. Nearly two-thirds of the city’s renters are cost-burdened, meaning they pay more than 30% of their income on rent. By comparison, nearly half of all renters in the country are cost-burdened, according to the U.S. Census Bureau.

In Bend, about one-quarter of renters are “severely rent burdened,’ or paying more than half their income on rent.

“Those people are making choices about healthy food, transportation, childcare, health expenses, any number of other expenses, that’s all being balanced if you have to pay too much for rent or to stay in your home,” McConnell said.

“We’re all here for a reason,” she said. “A lot of folks stay here intentionally — sometimes for lower wages — because we love this place.”

According to the city’s housing department, the number of renters who are severely burdened by rent costs has slowly declined in recent years — not because the rental market has become cheaper, but because more wealthy people have moved to Bend, and others can no longer afford to stay.

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‘In a perfect world, we would never leave’: Bend’s young families balance future need with high housing costs

Despite the high costs, Deschutes County has a homeownership rate of 69%, which is above the state average.

“We live in a place where the nurses, the teachers, the restaurant managers, all these folks who were once making a decent living … they can’t buy a house here,” said Katy Brooks, CEO and president of the Bend Chamber of Commerce.

Can’t buy it? Build it

In 2000, with Bend about half the population as today, the city was still in a transition from a timber town to something else, Brooks said. The housing market was hot in the 1990s. Average home prices jumped from $108,000 in 1994 to $166,000 in 1999, according to The Bulletin archives. But that was still attainable to the middle class, Brooks said.

It took a big effort to diversify the economy beyond logging and make the region desirable to many different types of people, she said.

But home building wasn’t, and isn’t, moving fast enough with the booming economic growth. According to a draft of Oregon’s housing needs report set to be finalized in 2025, Central Oregon is short by 3,700 housing units. To close that gap, and to account for population growth, the region needs 55,000 new units in the next 20 years, including about 32,000 in the Bend urban growth boundary.

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High costs and low availability are hallmark’s of region’s housing shortage

One will be the Haskells’ new home. Ben Haskell was drawn to Bend by skiing and other outdoor pursuits from the East Coast about 10 years ago. The median home price in Deschutes County was under $300,000 then, less than half of what it is today. That didn’t matter as much to Haskell then. He was content renting houses packed with roommates to split the cost.

Then he met and married his partner, Danielle, and the couple — both teachers — started looking for a house to buy a few years ago. But owning a piece of the town they had grown to love was out of reach.

“It was not even a thought to be able to buy in Bend,” Ben Haskell said. “I missed the bus.”

Then his father had an idea — they could build one instead. The Haskells bought a 1-acre lot in La Pine, just south of the state park. Ben Haskell took a job at Sunriver Resort, Danielle Haskell at La Pine Middle School, and poured most spare moments into the project — hours and hours of hoisting beams, driving screws and painting.

They estimate the house — a two bed, two bath and a few thousand square feet — will cost $300,000 to $350,000, including the land. The median home value in La Pine is $440,000, according to Zillow.

The exterior is finished with white paint and black trim, but the inside still needs work. They’ve been living in a trailer on the property with their two dogs, Eddy and Maverick, for the last 18 months, growing restless for the day they can finally move into the home slowly rising nearby.

Wave of homes to the rescue?

Historic levels of housing are queued for Bend’s outward expansion areas. Because of the housing crisis, state lawmakers in the last few years have given wiggle room to cities, especially Bend, in the state’s 50-year-old land use planning system meant to preserve open space and reduce sprawl.

A 2021 law created specifically for Bend added 260 acres — enough land for 2,500 homes — to the urban growth boundary, bypassing the arduous planning process required for outward growth. In 2024, a bill set up a path for cities to quickly expand urban growth boundaries by 100 acres, for which Bend is in the midst of selecting a site to add 700-1,000 homes to the city.

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Developers propose hundreds of homes for Bend UGB expansion

But building on fresh ground takes years. About 750 units have been built on the land the city added during its last comprehensive growth boundary expansion eight years ago, with another 5,000 units on the way.

Thousands more are slated for Bend’s urban core, where the city hopes taller buildings in bikeable and walkable neighborhoods will play a key role in the city’s growth. The city council has attempted to incentivize denser housing by awarding tax breaks for some multiple-unit developments, requiring a certain percentage of housing attainable to people making less than the median income.

Housing leaders are hopeful the mass of new units will help flatten costs. But even with more supply, it will probably be a long time until housing becomes affordable for the middle class without intervention from government or other groups, Brooks said.

Bringing down costs

New tools are trickling in for developers of affordable and middle income housing to meet their bottom lines facing soaring construction costs, infrastructure costs and high interest rates.

The city of Bend has a handful of fee exemptions and financial incentives for builders. In 2006, it became the first city in Oregon to implement an affordable housing fee, which is a tax on residential building permits to help pay for affordable housing. Earlier this year, Deschutes County created a program to provide builders a $30,000 credit for homes sold as workforce housing. Hoping to provide housing for workers key to Central Oregon’s economy, the Bend Chamber of Commerce created a low-interest revolving loan program, which allows developers to borrow money at a lower cost and then charge less to sell the house.

All of that financial help is necessary for developers to be able to build attainable housing, said Jackie Keogh, chief executive officer at Rooted Homes . The nonprofit housing developer uses grants, financial incentives and other programs to build small family homes and sell them below market rate.

Keogh said it costs about $400,000 to build a one of their homes, but most working families can only afford a $250,000 home.

De Padua and Fonseca, the couple from Guadalajara, thought housing costs might push them out of Bend. But earlier this year they successfully applied to buy one of 40 houses under construction by Rooted Homes . They’ll pay under $2,000 a month for their mortgage.

Next summer, they’ll move into their new home on Simpson Avenue on Bend’s west side and will move in next summer. Their daughter plans to attend Oregon State University-Cascades just across the street.

Like Fonseca and De Padua, many others can’t buy a home in Bend’s market. More than 100 applied for the program, and hundreds more were interested — medical workers, daycare workers and restaurant employees.

“If we’re not going to be able to house them, everything that made Central Oregon attractive is at risk,” Keogh said.