Subdivisions, Developments, and Absentee Vacation Rentals: The Future of Newberg Housing?

Reported By: Sophia Lumsdaine

Photo From: realtor.com

According to Newberg City Council Member Robyn Wheatley, there are “32 new cottage clusters currently being built off Crater Lane and Myrtlewood Road” in northwest Newberg. The company Polisch Homes is presently building another large housing development in the Mountainview area on the southeast side of town, and JT Smith Construction has been working with the Willcutts Realty Company to build another development at Crestview Crossing off  Highway 99. In the past four years, Willcutts Realty Company has facilitated the creation of three new housing developments in Newberg: Crestview Crossing, River Run, and King’s Landing. 

Right now the council is in the process of applying through the state of Oregon for the third or fourth time to expand the urban growth boundary for Newberg. The City Council is in charge of zoning different types of land within Newberg city boundaries, while the Newberg Community Planning Department of the city government oversees the creation of land use plans that dictate development in Newberg.

For a subdivision to be made, the city must first zone the land and make sure the development aligns with zoning, while the Planning Department oversees the unfolding process. If the development aligns with city zoning, the Planning, Engineering, and Building Departments will monitor the construction to make sure that building code standards are upheld.

As seen in the case of Willcut’s recent three housing developments, a number of parties are involved in actually building the development–the City Council, the city Planning Department, the construction company, and the realty company.

The Newberg housing market is becoming increasingly tight and expensive. “I bought my first house [in the realty business] eight or nine years ago for $150,000,” said Chris Peterson, a realtor at Willcutts Realty Company. Now, the average house in Newberg is selling for approximately $400,000. Entering the housing market right now is “super hard for a lower-income family or first-time buyers,” Peterson said.

Part of the reason for this is an expanding population in Newberg, but the housing crisis also has to do with interest rates. When homeowners bought their houses a decade or so ago interest rates hovered around 4%. Now, interest rates are up to 7%, making the prospect of selling a house and then rebuying at a higher interest rate an unappealing prospect for current homeowners. As a result, housing supply on the market is low, and demand is high, which only exacerbates the problem by driving up prices.

According to council member Molly Olson, purchased houses being used as vacation homes and absentee rentals are also a huge point of contention in the Newberg housing market. Olson stated that Newberg citizens are concerned about empty neighborhoods filled with absentee rentals and the potential for vacation rentals to drive up housing prices, leaving local residents outpriced, as has happened to an extreme degree in tourist towns such as Seaside, Ore.

Some Newberg residents have also voiced concerns over the recent subdivisions and large-scale housing developments popping up around the city. Complaints include traffic concerns, issues over noise, compromise of neighborhood integrity, visual dislike for the new developments, and concerns about disruptions of natural environments. 

While the housing predicament in Newberg persists, the city council is working to allocate funds towards affordable housing. Affordable housing is a very specific term that refers to subsidized housing where occupants pay no more than 30 percent of their income on housing costs, including utilities. Occupants must have an income of less than 80% of the average median income in Oregon.

The council is currently working on funding affordable housing through an Affordable Housing Trust Fund and a Construction Excise Tax, but efforts are slow-moving and funds are lacking. Counselor Olson said that she believed the council had little ability to substantially make progress on affordable housing at the current time.

“I have reached out to the Willcutts to invite them to apply for CET money available for affordable housing and got no response,” said Counselor Wheatley in an email. Willcutts Realty Company’s goal in its housing and subdivision projects is to “add inventory” to the market, stated Broker Peterson, but also to “price competitively.”

“There’s not a lot of homes on the market, so we need to add inventory, and [building these developments] is the most efficient way to do it,” Peterson said.