PENDLETON — When the Umatilla River floods hit Pendleton in 2020, hundreds of residents were rendered temporarily homeless.

The Oregon Legislature eventually stepped in to provide millions of dollars worth of rapid rehousing money to organizations like the Community Action Program of East Central Oregon to help displaced residents find a new place to live.

But the nonprofit struggled to find homes for the flood survivors in Pendleton’s existing housing market, according to CAPECO Chief Executive Officer Paula Hall. There were few housing options on the market, and even available homes were often unaffordable for the displaced residents, many of whom came from Riverview Mobile Home Estates. Kate Gonsalves, a senior communications coordinator with Oregon Housing & Community Services, said the rapid rehousing money was soon repurposed for a different Pendleton housing project.

Pendleton and communities across Eastern Oregon have been plagued with tight housing markets for years, but people in the local real estate industry are saying the COVID-19 pandemic has only increased the disparity between supply and demand at all levels of the market.

COVID-19 further tightens the marketThe real estate industry measures the health of a housing market by looking at the number of months it would take to sell all properties currently for sale at the average monthly pace, according to Texas A&M University.

Jef Farley, a longtime Pendleton real estate agent, said a balanced market is five months. At the end of 2020, Pendleton had less than a month’s worth of stock.

While home buying has been aided by low interest rates on home loans, Farley said the pandemic-induced rise in telecommuting has led to more people interested in living in Pendleton.

Pendleton has become an extreme seller’s market.

“We are at a crisis level,” Farley said.

Real estate agents aren’t the only ones noticing this trend.

At the beginning of the pandemic, Genna Banica, an escrow manager with Pioneer Title & Escrow in Pendleton, said she initially worried that work was going to slow down as people looked to stay in their current homes as the virus spread.

“We didn’t know it was going to be so busy,” she said.

Even as the coronavirus has begun to recede in 2021, Banica said coming into work early, staying late and skipping lunches is still the norm to deal with the high volume of work. Banica said she recently dealt with 24 requests for refinancing and new home purchases over four days, a workload that used to represent a month’s worth of activity.

Elaine Anderson, a sales manager for Guild Mortgage Co. in Pendleton, has also noticed a considerable uptick in business. Anderson said low interest rates on home loans has helped drive the increased demand on the housing market. The market is so competitive that Farley has encouraged his clients to be sure about their offers, because it may be their only chance.

Farley and others in the real estate industry said they don’t expect the market to slacken until Pendleton’s housing stock grows.

It’s a problem for both renters and homebuyers, even as Pendleton is showing signs of progress.

Progress on the horizon?

The city of Pendleton issued 77 housing permits last year, a 10-year high. Excluding manufactured homes, the housing units had a total value of $10.3 million, also a high mark. But Pendleton was seemingly on the cusp of adding hundreds of more units than that, and some of the large projects the city has been directly involved in have been slow to get off the ground.

The city reached a deal with I & E Construction of Wilsonville to build a 200-unit apartment complex on Westgate two years ago. Tim Simons, the city’s community development director, said the developer is still working on lining up financing for the project and could break ground this summer.

In early 2020, the city approved a tax abatement deal with the new owner of the old U.S. Forest Service building on Southwest Hailey Avenue. Simons said the project was delayed when the developer switched architects, but it’s still in progress.

The city is also involved in two affordable housing projects: an 80-unit complex off of Tutuilla Road and a 70-unit project on South Hill. The former is where some of the rehousing money was redirected and flood survivors will be given preference when rentals open up.

Large, single-family developments have been harder to come by, but Simons said he hears regularly from developers interested in some of the private tracts of land that could be used for subdivisions.

Despite the continuing need for new housing, Pendleton Mayor John Turner said he didn’t see a need to deviate from the city council’s housing goals, which has been set at 50 housing permits per year since 2017. Citing the various housing projects in development, he anticipates hundreds of new housing units will go on the market over the next two years.

Turner said Pendleton isn’t unique in its need for housing, an issue that’s felt nationally.

Banica, the manager at Pendleton Title, said she’s heard from title companies across the region that they’re seeing the same trend as Pendleton.

Hermiston defines its own approach to housing needs

When it comes to building new housing, Pendleton city officials have long pointed out the disadvantages their city has in contrast to its neighbor to the west. In comparison to Hermiston’s sandy soil and flat topography, Pendleton’s rocky ground and sloped surfaces makes building new homes more difficult.

Hermiston saw a housing boomlet of its own in 2020, issuing 101 housing permits last year. Unlike Pendleton, all of them were single-family dwellings.

Hermiston Assistant City Manager Mark Morgan said the city has honed its focus on how to make the process easier for developers. Morgan said initiatives like partnering with Umatilla County on building a new water tower and rezoning some industrial land put Hermiston in a position to attract development.

“Now, when you have a massive shift in mortgage rates, that has allowed the private sector to strike while the iron’s hot,” he said. “If we were just trying to scramble and work with developers to chase historically low interest rates, we would have missed had we been starting from scratch. All the work over the past several years has allowed the city to springboard off the historically low interest rates.”

Morgan said Hermiston is aware that the housing market is continuing to shrink across the country, but it’s hopeful its approach of providing public infrastructure to developers will continue to pay off.

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East Oregonian reporter Bryce Dole contributed to this report.