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Eugene Apartment Market as of February 2014
Between 1995 and 1999, 4,300 multi-family units were added to the housing inventory in Eugene, but with increased competition from the sales market after 2000, coupled with rising rental vacancy rates, multi-family housing construction in Eugene slowed in the following decade.
Multi-family development in the area ranges in age from new to 50 years old, and is primarily wood-frame, garden-court style, suburban apartment complexes. Building permit data indicates approximately 3,500 new apartment units have been constructed (or are permitted/under construction) in Eugene between 2000 and the current date (average of 255 units per year), with almost all of the newest construction in the University of Oregon campus area up until 2012.
The downturn in the local economy was notably stabilized throughout 2012 with increased sales and construction activity in 2013. Proposed construction activity increased for both campus and non-campus multi-family developments in various Eugene neighborhoods. This recent increase in development has been in response to the continual demand for multi-family housing in the area (low vacancy rates) and limited supply (lack of construction over the last decade).
University of Oregon Campus
Rent levels in the UO area are the highest in the Eugene/Springfield metropolitan area on a per-square-foot and per-bedroom basis. Typically, the newest units or those units closest to the campus rent for more than older units or units further from campus, all else equal.
The recent increases in enrollment have spurred a significant amount of campus housing development in the last 5+ years. Fifteen new multi-family complexes serving the UO student population were completed for the 2012-13 school year, providing 338 additional units (including LCC project) and 805 bedrooms (including LCC project). In addition, UO completed a new dormitory housing 450 students.
Over thirteen additional projects were comleted for 2013-14, which added 400± units and 1,800± bedrooms. Projects proposed or under construction for 2014-2015 will add an additional 300+/- units and 900+/- bedrooms. Some of the projects originally proposed for 2014-2015 were delayed due to concerns of an oversupply of student units (approximately 130 units and 2,000 bedrooms on hold).
2015-2016 could add an additional supply of up to 500 to 700 units and 2,500 to 5,000 bedrooms if all proposed units are constructed, with the currently proposed count being approximately 500 units and 2,500 bedrooms for 2015-2016 without considering any projects known to be on hold. Based on the number of projects under construction or proposed, contrasted with the enrollment trends at the University, supply and demand are in equilibrium this year.
Outside the UO campus area, the most recent multi-family projects include: Willakenzie Crossing (56 affordable units), Greenway Apartments (11 units), Chase Crossings Apartments (176 units), Goodpasture Island PUD (466 units) and Heritage Meadows – Drake Crossing (142 units). The Chase Crossings Apartments market to the student population, but is not located directly on campus.
These projects reflect a total new unit count of just under 900 units introduced to the market in the last year, with Goodpasture Island PUD still under construction. Some additional projects have been proposed totaling 50+ units outside of the campus area, but none of these projects have been permitted to-date.
In response to the analysis in the Eugene Comprehensive Lands Assessment (ECLA), the City of Eugene has projected that 8,682 new single-family homes and 6,301 new multi-family units will be needed to accommodate population growth in Eugene over the next 20 years, which equates to an average of 434 single-family homes per year and 315 new multi-family units per year. This projection was based on the estimated population growth rate of 0.88% per year. The projection supposes an estimate of 2.25 people per household and a housing mix of 61% single- family and 39% multi-family.
The average growth of single-family home development over the last 10 years has been approximately 420 homes per year. The average growth of multi-family unit development over the last 10 years has been approximately 255 units per year. Therefore, the recommended housing mix proposes an increase of multi-family development slightly above historic averages and single-family development slightly below historic averages.
The most recently introduced or under construction supply of units represents over a three year supply, excluding campus units. However, given that the majority of development over the last 5 to 10 years has been confined to the campus area, the influx of new non-campus units to the market should be met equally by demand.