Building Hope for Oregon’s ‘Missing Middle’

Home builders see relief on the horizon for housing projects designed for middle-income Oregonians.

Building a home that a teacher or construction worker can actually afford requires everything to fall perfectly into place.

So, when Eliza Wilson's nonprofit built seven modest cottages in Redmond at the attainable price of just under $400K, she felt something unusual: hope.

Most government housing subsidies support affordable housing for low-income households. Wilson and other home builders say it’s nearly impossible to find low-cost financing for homes designed for buyers known as the “missing middle.” 

The need is vast. “For middle-income homeownership — that 80% to 120% area median income range — there's really not any support to subsidize those projects and it's still very much needed,”  said Wilson, Executive Director of Rooted Homes, a Bend-based nonprofit community land trust.

And the need is closer to home than most people realize. “When I joined Rooted Homes, I was actually shocked that most people fall within the affordable housing range in Central Oregon,”  Wilson said. “People don't realize that the folks who would live in these homes are their neighbors.” 

The grant that supported the project, called Rooted at Antler, came from Deschutes County. It was a one-time opportunity. Wilson saw no new source of financing to keep costs that low again anytime soon.

Building Hope Fund seeded with $100 million to jump-start projects

In May, Oregon Community Foundation announced the Building Hope Fund with $100 million in seed funding to provide flexible loans to home builders across Oregon. The goal is to jump-start projects aimed at middle-income Oregonians, with a target of financing 10,000 new housing units over the next decade.

OCF has since heard from dozens of home builders across the state with projects ready to move forward, and media coverage has followed. OCF President and CEO Lisa Mensah discussed the fund on OPB's Think Out Loud, where she laid out the case for why philanthropy needs to step into this gap.

“Housing is a cornerstone of stability and economic vitality,”  Mensah said. “Grant makers typically get involved at the toughest part of that — affordable housing, shelter. And we're proud of that work, but we think we need to do more.” 

The Building Hope Fund is designed not just to lend, but to attract banks, other foundations and philanthropic partners to multiply its impact statewide. 

Building costs are climbing

In Eastern Oregon, Union County homebuilder Gust Tsiatsos has watched financing costs make middle-income projects nearly impossible. Construction costs have tripled — from around $125 a square foot eight years ago to over $400 today — and borrowing rates have followed.

“It really boils down to how much risk developers like me want to absorb,”  Tsiatsos said. “If we can find a way to get financing that's affordable, it gets us off the bubble.” 

Tsiatsos has projects in La Grande, Baker City, and Ontario that could produce 67 homes — land secured, infrastructure in place — waiting only for financing that makes the numbers work.

Rooted at Antler

Back in Central Oregon, Wilson sees the same potential. The community land trust model, in which Rooted Homes retains permanent ownership of the land and sells only the homes, keeps prices affordable in perpetuity. But it still requires subsidized financing to get projects off the ground.

Without a flexible source of financing like the Building Hope Fund, middle-income housing can only be a small fraction of what Rooted Homes builds. With it, Wilson envisions mixed-income neighborhoods — with roughly 25% middle-income homes — becoming a standard feature of every Rooted Homes development.

“A percentage rate can make or break a pro forma and whether or not we can bring housing on board,” Wilson said. “I hear that across the board, whether they're for-profit or nonprofit.” 

The Building Hope Fund is still in its early stages, and OCF is seeking partners to grow it. For donors, Mensah offers a straightforward case: this is philanthropy with a visible, tangible return.

“There will be families getting keys. There will be builders celebrating. There will be ribbons to cut,” she said. "I think we'll count the houses, we'll count the joy of building hope family by family.” 

Donors can contribute directly or contact an OCF Donor Relations Officer or Philanthropic Advisor to explore other pathways to support the Building Hope Fund.

The seven homes in Redmond, about to welcome their first owners, demonstrate that access to financing makes a big difference. The Building Hope Fund is a bet that it can work in every corner of Oregon.