As the economy begins to rumble to life again to after COVID, employers all over the country are reporting they’re having difficulty hiring employees. But here on the Oregon Coast the worker shortage has been acute for much longer. The problem: affordable housing for workers.
On a sunny windswept Memorial Day in 2016, the little oceanside village of Manzanita, Oregon, took a gut punch which for many residents still lingers as an emblematic reminder that the lack of workforce housing has real consequences.
It was the day Marzano’s closed its indoor dining room. No longer would day-visitors, weekly renters, or the town’s lifelong homeowners be able to grab one of the eight tables and enjoy a steaming pizza mounted on a stainless-silver stand. Sure, the restaurant still offers takeout, but it’s not nearly the same.
“We couldn’t staff it any longer. We needed four people to run it, and we couldn’t find the workers,” explained Natalie Nelson, who along with her husband Kris have run the legendary pizza parlor for the past 20 years.“One of them had to move, and the weed store took another one.”
Sitting on black foldout chairs inside the empty restaurant on a rainy morning this April, the Nelsons elaborated on what the scarcity of housing has meant for their Oregon coast business and its young minimum-wage workers.
Marzano’s staff, which, during busy summer months, could surge to 12-15 workers, each started at a training salary of $12 an hour. The Nelson’s typically boosted wages to between $15 and $22, in addition to the splitting up tips in the tip jar.
“In the past, we’ve hired people living out of their cars,” recalled Kris. “We had one kid from somewhere in the Midwest who worked a deal at a motel so he could shower there, and then he’d sleep in his car.”
Brian Williams, who last fall, beset by the pandemic and constant labor shortages, decided to sell his beloved Big Wave restaurant in Manzanita, told this reporter several years ago that he’d resorted to placing ads on eBay to solicit cooks, dishwashers, and waitstaff. One arrived all the way from North Dakota.
Said Natalie Nelson: “Housing is the culprit, no doubt about it. So now we only hire high-school kids. But the trouble with that is that a lot of them can only work on weekends.”
Dan Haag, manager of the Manzanita Visitor’s Center, had few other options but to sling pizzas at Marzano’s when he moved here in 2001. “It was a big deal, closing that dining room. It really brought the issue to the forefront. Now, it’s on everyone’s mind,” Haag said. “With the lack of workforce housing, we are going to see the squeezing not only of restaurants, and motel and hotel cleaners, but every business. “Minimum-wage workers,” Haag stressed, “are the lifeblood of this community.”
As one worker, manning the cash register at Salt & Paper on Laneda Avenue, groused, “You can work in Manzanita. You just can’t live there.”
. . .
The lack of workforce housing is having a measurable impact on the quality of life for everyone in Tillamook County, Oregon, and throughout the Northwest – from Ocean Shores, Washington (which my friend and former colleague at the P-I, Neil Modie, used to call “Aurora by the Pacific”) to Long Beach.
Many businesses, up and down the coast, cannot find or retain employees due to a paucity of housing that workers can afford. Vacancy rates have plunged to near zero, while rental and housing prices have rocketed 40 percent between 2014 and 2019, a Tillamook County, Oregon housing report found. During the same time, median household income went up by only 21 percent.
Schools, meanwhile, cannot fill jobs for teachers, the report also revealed. “We have huge problems recruiting or keeping teachers here,” said Neah-Kah-Nie School District Superintendent Paul Erlebach. The hospital in the city of Tillamook and medical facilities throughout the county also have had difficulty recruiting help and keeping employees from leaving.
“I had a recent vacancy at the care center in Wheeler and was able to recruit a guy from Montana,” recalled Marc Johnson, board president of the Nehalem Bay Health District. “He spent several days looking for a place, and he couldn’t find one for his family – and so he left.”
Meanwhile, many service-oriented establishments have had to cut back on the hours they are open because they don’t have enough employees, the report noted. “Every industry in the county is impacted by a lack of workforce housing,” said Nan Devlin, executive director of the Tillamook Coast Visitor’s Association.
“What’s sad,” Devlin added, “is that some areas of the county (and she clearly meant touristy coastal enclaves like Rockaway Beach, Netarts, Neskowin, Pacific City, and Manzanita) don’t want that kind of housing in their backyard.”
As Jon Walsh, owner of Manzanita Fresh Foods – which today employs 28 workers who are paid an average of nearly $19 an hour – put it: “It’s a fool’s game, completely insane for a wage worker to even want to live in Manzanita. Most of our employees come here from Rockaway and south of there.”
According to the the US census, almost one in four of the 9,476 workers in Tillamook County commute more than 50 miles (100 miles roundtrip), which is double the average work-drive in Oregon. The Census also found that one in three local workers live outside the county. At the center of the crisis are low wages and an almost non-existent stock of affordable housing.
As the Tillamook Headlight Herald reported on March 16, 2020, “While those at the bottom and middle are most affected, the housing crunch hits every demographic. Land scarcity and other factors such as permitting processes encumbered by environmental regulations means an inadequate housing stock for the area.”
The county has two housing markets, the coastal market, which includes the wealthier Manzanita, rich with retirees and second-home owners. Then there is the interior market that is concentrated around Tillamook, and consists primarily of older, less expensive housing.
To put this in real terms, there were 2,266 workers engaged in retail and food services in Tillamook County, earning an average of approximately $20,000 per year in 2014. However, the number of rental units “that can be reasonably afforded” by a worker at that wage level ($500 per month) is nearly ten times smaller than the number of workers – with only 239 such units in 2014, according to the county’s housing task force report.
“Among households that earn up to $20,000, 92 percent pay more than 30 percent of their income on rent or mortgage payments,” the report stated. “The same is true for 70 percent of those earning between $20,000 and $34,999 – up from just 25 percent in 2000.”
Jake Davis was hired by Tillamook County last year as its Housing Coordinator. Since 2019, Davis, a recent graduate of Portland State University, said, “We need to enable more housing options across a bigger range of incomes to ensure people have a choice and mobility when it comes to where they live.’
Davis returned to Portland last month. Why? He couldn’t find a place to live in the county.
In hopes of putting a more human face on the problem, Tillamook County Commissioner Erin Skaar said the absence of a sufficient supply of workforce housing often means that “service workers in Manzanita are forced to live with roommates.
“There are a lot of cases that we see where six people are living in a two-bedroom apartment,” Skaar continued. “It also means maybe driving a car without insurance, or having to sacrifice childcare – you know, leaving their child with a friend – or going to food banks, or living in RV’s and having to move frequently from park to park.”
Or, as Marc Johnson observed, “It is ultimately a public health issue, and the cold, hard reality is that this is a borderline crisis.”
Over the past quarter of a century, Tillamook County — and most certainly, Manzanita – has seen a massive surge in the number of part-time seasonal residents. Indeed, we’ve been discovered, and it’s easy to quantify. Just take a stroll down bustling Laneda Avenue, almost any day of the week.
Just look how this village of almost 645 residents, according to 2019 Census data, has filled in. It seems like only yesterday when just a smattering of homes adorned the southerly slopes of Neahkahnie Mountain. There are now lines outside of Manzanita Coffee, even on weekdays. On summer weekends, you’re lucky to get a parking spot on Laneda.
Granted, the pandemic has drastically altered the dynamic of the village, but still, things are getting mighty crowded. It used to be that a couple a days after Labor Day we had Manzanita to ourselves. No longer.
“What’s evolved in the last few decades is that the county’s blue-collar workers in logging and dairy farming and fishing are more and more at odds with second-home owners, a lot of them wealthy, who are pouring in,” reflected Peter Starkey, executive director of CARE, Inc., an anti-poverty agency that was founded in 1991. “Now you have a kind of battle of the classes going on,” said Starkey, who moved to the county from New Hampshire in December and struggled to find a place to live, finally settling in Netarts.
“The transition began in the early 1990s, when you had people from Portland and Seattle and California coming here and getting hold of land that was cheap for them.
“Workforce housing,” said Manzanita Mayor Mike Scott in an interview in mid-February, “is more of a Tillamook County story. The new phenomenon of Airbnb has sucked the life out of everyone here. “Look, we’re a small little town,” he said. “We are fully supportive of workforce housing, but we can’t do it on our own.” The rental housing market in Manzanita and countywide has dried up.
“Right now, there is a total of one house for sale in all of Manzanita, the little house next to the San Dune Pub. [It’s priced at $750,000, two bedrooms and no closets.] You’re not going to get a developer to build [workforce housing] without massive subsidies,” Scott said. There are currently about 1,250 housing units in Manzanita and 258 of them – or roughly 17.5 percent, as is the rule – are short-term rentals.
[Tillamook County has more than 1,000 short-term rentals, and there is no cap or waiting list to get certified, as there is in Manzanita, where presently 15 homeowners are on the waiting list and can expect to wait close to a year to begin cashing in on their investment.]
Almost two-thirds of the village’s housing stock is not occupied for weeks or even months at a time, said Manzanita’s Councilor Jerry Spegman. The 2019 Census shows that 87 percent of the village’s homes are either seasonal or vacant for most of the year.
To illustrate just how reliant the town is on short-term rental taxes, consider Manzanita’s general fund revenues for fiscal year 2019-2020: Some $210,000 was collected in property taxes, while $540,000 was generated from short-term rentals. About 55 percent of the city’s general revenues are derived from short-term rental taxes.
“A second homeowner who comes here now and then, of course, is contributing [from the property taxes he or she pays] to the county as far as fire, schools, and so on, but contributes very little to the city of Manzanita.”
Erin Skaar, a Tillamook County Commissioner, is considered an affordable housing guru by almost everyone this reporter spoke with. Before her landslide election last November, she served as executive director of CARE.
“There is a sense that by adding density, meaning workforce housing, it is not a good thing,” Skaar said. “You know, apartments are bad. Houses are good.”
Marc Johnson, of the Nehalem Bay Health District, offered this sobering assessment: “There is a certain cultural stigma attached to workforce housing. It’s, ‘Not in My Backyard.’”
New housing production has not kept pace with the demand propelled by full-time and part-time home owners, which means, falling vacancy rates and spiraling home prices. Tillamook County has built up a vast, flourishing tourist industry, and, as a result, is increasingly dependent on low-wage workers to staff coffee shops, restaurants, shops, hotels and the like.
“Where it breaks down is there has not been an equal investment in housing for these workers,” said Skaar.
Skaar acknowledged that the cost to developers in building workforce housing is formidable, what with the money needed to buy property, pay permit fees, and then a sundry of service development charges such as fees to sewer and water hookup. Then, there is the scarcity of available and buildable land, problems that are exacerbated by environmental flood zone regulations and agricultural land use constraints.
In Manzanita, for example, there are only 96 acres of land left for residential development, according to the “Manzanita UGB (Urban Growth Boundary) Buildable Lands Inventory,” published October 19, 2019. Of that, about 94 percent of the land available falls under the category of high-density residential zoning, which allows more than eight units per acre, given a minimum lot size of 5,000 square feet per unit.
Said City Planning Commission member Hiltenbrand: “There is nothing in the city’s zoning laws that precludes building workforce housing.” So why doesn’t someone do it?
“My opinion,” Hiltenbrand replied, “is that builders can make a hell of lot more money building higher end single family residences than workforce housing.” Asked why the city doesn’t allow residents to add “Accessory Dwelling Units (ADU’s) to their homes, such as, say, building a small apartment above their garage and renting it out to a low-wage earner, Hiltenbrand said, “The topic has been broached.”
Said Jim Pentz: “Oh yeah, it has been broached for years and years.”
Here’s the deal: How much housing does Manzanita need to enable pizza and coffee and hotel and shop workers to be able to live here? The answer, according to the Tillamook County Housing Task Force report, is 649 units in Manzanita, but that includes all types of housing, not just workforce dwellings. The only city close to Manzanita is Rockaway, which, the report stated, needs 456 housing unit.
People like Dan Carroll are trying to come to the rescue. Dan grew up in Woodland Hills, California, then spent many years in Spokane, before moving to Portland and then Hillsboro, Oregon, in 2000, and not long later, to a nice house east of Nehalem.
Today, he owns 17 houses in Tillamook County. It was the closure of Marzano’s dining room that propelled him into this home-buying venture. “I came home that night and I told my wife, ‘I’m going to change this,’” recounted Carroll, who spent most of his career in the high-tech industry. “I said, ‘Why don’t we buy some inexpensive housing, renovate it, and then rent it out at a nominal amount.’”
It helps that Carroll, 56, possesses basic carpentry skills, an ability to paint well and lay floors. The rest he contracts out to electricians, plumbers and others. He rents out his homes to working-class families. There’s a two-bedroom Rockaway home he bought, three blocks from the roiling Pacific, for which he charges $600 a month.
To a family of five he rents a three-bedroom, two-bath house for $1,100 a month, also in Rockaway, where he owns six homes. To a single mom, who works in retail, he charges $1,550 a month for an 1,800 square-foot home on Miami-Foley Road. It is not unusual for Carroll, who posts his housing ads on Zillow, to get 40 requests over a 24-hour period, so feverish is the demand for long-term and modestly-priced rentals.
Carroll has also spent musc of the past five years as a substitute teacher in the Neahkahnie School District. His former students still affectionately call him “Dan The Man.”
During a recent interview at Nehalem Elementary School, where Carroll was learning the basics of online learning, he said: “The vast majority of houses we bought we’re weekend homes. So, we are reversing the trend,. We can solve these problems as a community.”