NWCUF Grantee Spotlight: Mid Oregon Credit Union Shares Insights on How it is Addressing Workforce Housing Hurdles in Bend

Like so many regions across the Northwest, Bend, Oregon is experiencing inflated housing costs, which has driven the workforce further and further away from their places of employment. Mid Oregon Credit Union knew they had a role to play to address this urgent housing problem, and in June of 2019, the credit union partnered with the Northwest Credit Union Foundation and was awarded a $100,000 Workforce Housing Project grant, which supported the credit union Workforce Housing Loan Program. With the grant support, Mid Oregon was able to pilot a developer-based interest subsidy program to increase the number of units available to workers who fall within 60-140% of the area median income. The program allows developers to receive lower interest rates based on the affordability of their rental units, incentivizing them to provide more diverse housing for the community.  

Recently, the Foundation sat down with Kevin Cole, Executive Vice President of Mid Oregon, to hear his insights on the program and how credit unions can engage in the housing space.  

NWCUF: Why was Mid Oregon interested in launching the Workforce Housing Loan Program? What was happening in your community that inspired the idea?  

Kevin: When I moved to Bend in 2016 I learned the phrase “poverty with a view.” It was how the business community described life in Bend for many members of the workforce. The origin of the phrase was the combination of central Oregon’s lower wage base and higher housing costs than the Willamette Valley. Our local economic development agency promoted the wage differential as a selling point for businesses to relocate to central Oregon. In addition to the affordability crisis, central Oregon faces a shortage of workforce housing. There are many reasons for the shortage, but the key one is economic — due to the cost of development, most developers build higherpriced single-family homes or luxury type apartments. The resulting lack of suitable housing is preventing businesses from being able to hire the people they need to grow. For people who already lived in Bend, the rising cost was pushing more people to move to Redmond, Prineville, and La Pine.    

NWCUF: What makes credit unions uniquely positioned to address workforce housing hurdles, in your opinion?  

Kevin: Flexibility. As a portfolio lender we can make loans that other lenders will not make. I believe you have to solve the issue as an economic problem by providing the right incentives to fill the gaps in the market. I also believe credit unions are willing to try different approaches to solve problems. In central Oregon, everyone was talking about the problem, but very little action was occurring. Mid Oregon was able to act on this grant opportunity to launch a pilot program to see if an idea was viable. That requires a strong grant partner as well as an organization that is willing to fail forward. 

NWCUF: How has partnering with local organizations benefitted the program?  

Kevin: We did not end up receiving as much support from local governments as I had hoped with the program. It remains a work in progress. Our mortgage department was able to sell the program from inquiries they received. 

NWCUF: What are some of the short-term impacts you have seen as a result of this program? What are some of the long-term impacts you hope to see? 

Kevin: We were able to lock in 11 units at good rental rates for 5 years. It is a tiny fraction of what is needed in our markets. This was a pilot program and the results show that targeting the loan rate to lower rents is a viable strategy.   

NWCUF: How has receiving grant funds changed how your credit union approaches a new product or program? Will you look for other philanthropic opportunities in the future? 

Kevin: The grant process was better than I expected. I was a little hesitant to submit a proposal for a pilot program but pressed forward anyway. We plan to submit a CDFI grant proposal for an expanded version of this program. 

NWCUF: What is your advice to other credit unions that are interested in creating products or services to address housing hurdles in their communities?  

Kevin: Do not fear failure or having to pivot your program.  Look at the economics of the problem and build a program that addresses the economic interests that are driving the market failures. In our case, the target is not the end-user of workforce housing but rather the property owner. When we changed the economics for the owner we were able to make a tiny bit of progress on a solution. 

Since launching the Workforce Housing Initiative in 2018, NWCUF has awarded more than $685,000 in planning and project grants to credit unions across Idaho, Oregon, and Washington to support credit unions in piloting innovative solutions to address their communities’ unique housing needs. Learn more about NWCUF’s Workforce Housing Grant program online.