(NE Olney development | Rendering courtesy of Astral Development)
It’s likely no surprise to anyone in Central Oregon, but Bend has a problem with housing. Specifically, when it comes to workforce housing. While initiatives by the City of Bend and developers have helped ease the issue by advocating for dense housing and urbanization, there are still issues holding development back; issues that help contribute to businesses lacking workers to hire, and workers lacking places to live.
A key issue lies in getting housing projects approved financially while still keeping their rent low enough to actually accommodate working class Bendites. A creative solution has been offered by Roost Development and Astral Development called a master lease agreement. A master lease agreement is a contract that allows a tenant (typically an investor, business, or property manager) to lease an entire property and then sublease portions of it to others.
This solution is offered by Astral Development and Roost Development. The Astral team is based out of NYC but led by Oregonian David Mosey who has local ties to Bend, and has overseen the development and lease-up of thousands of units of affordable, workforce and market rate multi-family housing in New York, California and Hawaii. Developing and delivering publicly funded projects to the workforce population within regulatory frameworks is one of the core tenets of Astral Development. The “Joule” team is led in its affordable and workforce housing initiative by Mosey who has spent 11 years in the affordable housing development field. A nonprofit development partner, the P3 Foundation, will be brought in to help to coordinate the project and will ultimately own Joule for the term of the rent-regulatory agreement (35-40 years).
Peter Grube and Perry Brooks, the Roost team’s core group of two, will tap into their deep local experience in both the public and private realms to manage day-to-day coordination and construction processes.
“The opportunity exists for large nonprofits to master-lease as many of the project units as would suit their need with the intent being that it could be a boon for recruitment of new talent or a way to retain valuable existing employees,” said Mosey. “Being a mission-driven, nonprofit-owned project allows for flexibility that no other multi-family building has; Joule can actually set rents to accommodate a company’s employees. For example, if St. Charles seeks to hire 25 nurses, and those nurses earn 95% of the region’s AMI (as defined by HUD); the project can accommodate those employees by setting rents at this exact AMI tier.”
Continuing, Mosey said, “It gets better from there: because this is not a for-profit project, there are no equity partners who are expecting high returns, so year-over-year rent increases need only keep up with inflation. Thus, over a few years, the rent that those nurses pay actually goes down compared to the larger Bend market, the rents of which typically grow far faster than inflation.”
This solution is beneficial for workers and employers, as it provides a clear path to affordable housing for workers, and a clear path to maintaining a workforce, for the employer.
“This process saves employers tens or even hundreds of thousands of dollars from turnover costs,” said Grube. “This is a massive issue in Bend, as many businesses are unable to retain talent and are forced to continually train and retrain new hires.”
Currently, the development teams are working on a master lease housing project on NE Olney: five floors of residential space over one floor of parking, co-working space, community space, and outdoor sports equipment storage. The total square footage equals 110,305, including a 3,575-square-foot second story garden deck for the tenants. The building will contain 134 units, including 100 studios, 29 one-bedroom units and 5 two-bedroom units. The estimated completion date is December 1, 2027.
“With the federal government likely abandoning robust housing subsidies, and with tax-credit pricing likely to continue to fall (why would your for-profit corporation buy tax-credits if you know that the corporate tax rate, which is already low, is about to go lower?), communities must work together fast and efficiently if they’re to make a dent in the acute affordable and middle-income housing crisis,” said Mosey. “It is the responsibility of local government entities to help make connections between large employers (for profit and nonprofit) and mission driven developers like Astral and Roost Development so that designing pathways to permanently affordable housing for the community is streamlined. The developers and nonprofit owners in this town are happy to do all the work, we just need a couple of introductions. If we see a bit of light shining through the cracks, we know how to break down the wall.”
Speaking on the need for programs like this, Mosey mentioned that tariffs and general uncertainty surrounding the actions of the current presidential administration are not helping. “Tariffs certainly don’t help and neither does the uncertainty created by all the nonsense on Capitol Hill, both foreign and domestic. Uncertainty is an enemy of housing, and the future is uncertain at best. The need for communities to fast-track creative, meaningful measures to combat the greater forces is the best way to keep our communities from falling further behind. For our part, we are willing to meet the City, its communities, all interested parties, and the city’s large employers 95% of the way there.”
