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One-third of Forest Grove renters pay more than half of their income to their landlord.

PMG PHOTO: WADE EVANSON - Contracted crews collect materials for disposal from a homeless encampment off Highway 47 in 2021.A third of Forest Grove renters pay more than half of their income on rent, according to a sample of U.S. Census Bureau data from 2022.

State law defines a severe rent burden as when at least 25% of renters pay more than 50% of their income on housing costs. Forest Grove is well above that point, the data indicates.

"Land is expensive and construction costs are high. Housing production is also a primary factor. The private sector builds the vast majority of homes and those homes are priced at whatever the market will bear. Simply put, housing production does not meet demand. There has consistently been an underproduction, so we're constantly falling behind in terms of meeting demand for housing," Forest Grove senior planner Dan Riordan told the City Council on Nov. 14. "Also, real estate is considered to be an investment with the expectation that real estate values will continue to rise, and as real estate values continue to rise, the cost increases for renters."

Since Forest Grove started tracking the data in 2018, severe rent burden hit a low of 31.4% or 954 households in 2019 and a peak of 34.6% or 1,126 households in 2020.

Riordan added that incomes have not been keeping pace with rising housing costs. According to census data, the median household income in Forest Grove in 2020 was $69,513 compared to $86,626 across Washington County.

Over the summer, Forest Grove evicted homeless campers from a section of city land off B Street. Earlier this month, Washington County evicted a homeless camp off Highway 47 as temperatures dropped into the 30s overnight.

"The cause of homelessness is rental price and the cost of housing," said Shawn Cardwell, executive director of the Forest Grove Foundation, which has case managers working with Forest Grove's homeless residents. "In terms of that severe rent burden, Forest Grove has been one of the toughest places to live in the state. Those things are known and common."

Still, Cardwell added, "I'm optimistic because the city is able to have these statistics. Work can be done, but it's really dependent on developers and different funding sources. The city isn't a builder."

The city government estimates that over the next 20 years, 2,000 more owner-occupied homes and 1,400 more renter-occupied homes are needed to meet demand.

In Forest Grove over the past five years, 508 housing units have been constructed, most notably 196 units at the Reserve at Fern Hill and 192 units at Forest Place Apartments, according to city data.

Using funding from a Metro housing bond passed in 2018, 36 units of affordable units — typically 30% of renters' income — were built at The Valfre apartments, and another 113 units of affordable housing financed with that bond are going up in Cornelius. Executive director Nathan Teske of Bienestar, a nonprofit developer that focuses on affordable housing, said he hopes the project is finished within a year.

Teske added that Forest Grove and Tigard have the highest rates of severe rent burden in Washington County, and funding from that Metro bond has been allocated.

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