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BEND, Oregon — On a recent afternoon in the core of Bend, Oregon, Jim Long paused with his keys in the ignition to excuse any cursing in advance. A former Navy man, Long spent roughly the last 30 years in government jobs trying to help people with stretched paychecks survive expensive cities. Non-print friendly words can happen.

With that, Long began his routine tour through a scene not that different from Bozeman.

He drove past brick storefronts alternating between outdoor gear and chic home decor.

A coffee shop’s doors remained in motion as Patagonia-wearing customers tended to their caffeine needs. Many held mugs plastered with stickers naming the trails they love and carrying the outlines of the states they’ve left.

They’re there for the mountains that form the crest of the Cascades. And for the access to the Deschutes River that edges along the city, past Bend’s Old Mill District where three smokestacks serve as evidence of the community’s past. The shell of two mills now hold shops, galleries and restaurants.

Bend is growing. Fast. And many are struggling to keep the rug under their mountain-town refuge. It’s a scenario that would sound familiar to those who picked Bozeman for its attributes, not its jobs.

“They’re places people want to be,” Long said. And there’s a price for that.

Or as affordable housing advocate Tom Kemper said: “It’s the rule of three: People either have three jobs or three houses.”

Until his retirement this month, Long served as Bend’s affordable housing manager for 13 years, molding Bend’s response to the city’s housing crunch. That’s when Bend’s population tipped past 50,000 and qualified for some federal dollars to help keep it affordable.

Where the city was when Long arrived is where Bozeman’s projected to reach in a few years as it nears that 50,000 threshold. The mountain-destination city, nearly double Bozeman’s size, is a fair indicator of what Bozeman can expect.

City leaders are in the final stages of picking who will be Bozeman’s Jim Long — the first person charged with putting together the city’s affordable housing program. The role is supposed to connect the pieces between city officials, the nonprofits and those building, developing and looking for housing. No pressure.

City planners waiting for that person’s arrival say elected leaders and residents who speak up will be the ones who guide what that looks like. Bozeman still has to decide who the program is designed to support and where the tab lands.

Roughly 780 miles away, Bend’s next generation of affordable housing maestros are filtering into the city as its population moves toward 90,000.

Long took a steep turn leading to a peak that put his car nearly parallel to the city’s skyline. He briefly lifted his foot off the gas and pointed to a five-story building past the ledge.

“That’s affordable housing,” he said.

The corner lot wrapped around a parking structure. Stores served as the foundation to the 48-units set aside for people making roughly $35,000 or less.

“We helped construct that. We provided the land for it,” Long said. “It provides housing for your downtown workforce, your service-industry employees.”

He let his foot fall on the gas again and continued an hour-long tour of what affordable looks like in Bend — from below-market homes in the city’s priciest neighborhood to a 63-unit lodge for people with waning retirement funds.

“We’ve been able to punch above our weight — I’m an old Navy boxer so I can use that term,” Long said. “I don’t know if the city could have done much more.”

Bend still makes headlines for its affordable housing crisis. Its market price of homes for sale has ticked upwards by an average of nearly 14 percent a year since 2012.

But it’s also the second largest generator of affordable housing in Oregon. The city’s tools can’t just be copied and pasted, but they’re worth knowing.

From labor to boutique

Bend’s past is timber like Bozeman’s is cows.

“They were just kind of there, fine towns but not what they are now,” said Bryce Ward, an economist at the University of Montana Bureau of Business and Economic Research.

Ward is a Montana resident who once called Oregon home. He said in some places, it’s jobs first then people follow, like North Dakota’s Bakken oil fields. In the sister-like mountain cities, “It’s people first, jobs follow.”

Bend has always been prime grounds for outdoor enthusiasts. Skiing, mountain biking, kayaking and rock climbing come with its surroundings.

Through its growth, Bend’s added an arts and culture community along with more indoor places to play. A Google search for food pulls up a map cluttered with options from breweries to Thai cuisine — though beer stops may outnumber restaurants.

“Bozeman and Bend’s natural amenities are the same, the mountains are still there,” Ward said. “But I think they became like a cool club. The cool boutiques, the restaurants, it makes it so much easier for more people to get off the plane, look around, and say ‘sign me up.’”

The challenge is, some people get squeezed out.

Bend was hit hard in the 2008 recession. Tom Kemper, the director of Housing Works, central Oregon’s version of HRDC in Bozeman, said median home values dropped from $395,000 to $195,000. Very little was built over the next four or five years. Then as the economy began to recover, “Boom.”

“Now, people are budding up to get a place to live,” Kemper said.

Since the recession, incomes in Bend stagnated except at the highest end of the scale, according to the Bend 2030 report by ECONorthwest.

In 2015, the area’s median household income was $52,905 and the average detached home cost $355,499. In the same year, Bozeman’s median household income came in at $47,361 with homes on the market priced around $341,489.

In 2015, most Bend renters were paying $986 while Bozeman renters paid $963.

It’s a race cities are losing to try and stop those numbers from climbing.

A lot of renters’ incomes increased less than 5 percent since 2012, but rents jumped by 36 percent. While many homeowners’ pay grew by 8.3 percent, for-sale prices went up by roughly 42 percent.

People in Bend with daydream-worthy incomes are still the minority, but they’re the fastest growing slice of the population.

Between 2013 and 2015, households earning more than $150,000 a year increased by roughly 14 percent. In comparison, the share of households earning incomes between $40,000 to $90,000 grew by roughly 1 percent.

Like Bozemanites, those who don’t make it in that former category tend to have roommates or most of their money going to rent. And that’s OK for a while, Kemper said, because many people are waiting longer for the life of kids and a house with a yard.

But eventually, they might change their mind. And even the cool kid who once lived in a van or worked at the hostel in exchange for housing starts looking for a single-family home.

Throughout much of Bend’s history, mid-market housing was provided through what’s known as filtering, where homeowners upsize, opening up their depreciated places at doable price points.

But that’s not serving Bend’s market anymore.

To afford the median home for sale in Bend, a shopper would need to make $81,400 a year. The median household income is $59,400. Those who are building considerable wealth through home equity can’t cash that out without moving to a less popular city.

Ring any bells?

Kemper said that means city government, developers and locals who care need to work together.

He said when Bend’s downturn hit, the city could have done a few things. It could have bought more land while it was cheap to lower developers’ costs. But city hall didn’t have the budget for it. Going another step back, he said Bend could have built “a treasure chest” for affordable housing. But, then again, city leaders would have needed to bet on growth.

In other words, “It’s hard.”

“You’re always going to be behind the curve,” Kemper said. “Bend has done more than most in terms of grappling with their affordable housing issue. If [Bozeman is] like Bend, where it’s a really desirable place to live, it ain’t going to change.”

The question, he said, is whether there’s enough funding to plug the gaps people face when they consider creating affordable housing. Otherwise, the problem ripples out from the hot spots in town, past the wall of city limits.

Bending the curve

Of course there are differences between Bend and Bozeman. Bozeman has a university with an international airport down the road. Bend has a two-year college and quick access to major cities like Portland. The Oregon town also has strict land-use laws that protects green space and farmlands.

Ward said Bend and Bozeman have something weird in common: “They defy expectation.”

“They both build a lot and have experienced massive increases in housing prices,” he said.

In raw numbers, Bend ranks second in Oregon for building the state’s most affordable housing units in the past decade, just behind Portland, which has Bend’s population times seven. Their definition of affordable means people making $51,000 or less can live there and save some of their paycheck.

Bozeman places 10th for building the most new housing among the nation’s metro and micro areas. Ward said that’s pulled from a report based on Census numbers set to come out in the next month.

Bend’s affordable housing manager salary relies on federal dollars that came with being an entitlement city. And those funds are limited. When Long arrived around 2005, he needed to find another pool of money.

He did that through a fee-based program that relies on builders. The first of its kind in Oregon, it went into place in 2006. The city charges one-third of 1 percent of the value of every building permit issued. That’s whether it’s a new restaurant or a simple house addition.

“Doesn’t sound like a lot, but it adds up,” he said. “And then we can recycle that money.”

By recycle, he means offer short-term loans often at no interest. That becomes those “gap dollars” to finish projects by helping pay for a downpayment on land or covering building material.

Since it rolled into place, the fee program has collected $6.4 million. It’s loaned more than $14 million dollars (thanks to the recycling) leveraged nearly $78 million in state and federal funding and $28.4 million in private equity. All that led to the creation of 770 affordable units.

Long said it was a solution some builders and real estate agents didn’t appreciate. Soon after Bend rolled out its program, state lawmakers outlawed other places from following suit. They flipped that during Oregon’s last legislative session in a series of bills aiming to fix what lawmakers called a statewide affordable housing crisis.

Since then, Long has traveled across Oregon talking with mayors and councils about the program and other tactics he’s paired with it.

“If anybody ever comes to you and says they have a solution for affordable housing, kick them out of your office because there’s never just one,” Long said.

Long’s replacement, Lynne McConnell, once worked at a food bank. She watched the number of people coming in for the basics rise with the cost of housing.

“The unavailability of housing affects nearly everything else. Something has to give, and so it’s health care, it’s food, it’s education, it’s transportation,” she said. “If you’ve heard of death by 1,000 cuts, here we’re trying for recovery by 1,000 bandages.”

Here’s a sample of that list: Bend has an affordable housing developer incentive plan, expedited review and permitting, a low income rental property tax exemption, a cottage housing ordinance to encourage smaller homes on smaller lots and some exemptions for their version of impact fees.

McConnell said next she wants to find more ways to get the mom-and-pop builders in on the effort to convert a house and a few units here and there. She’s still trying to figure out how.

“We really feel like we’re never going to figure out the solution if we’re not trying to see what fits for our city,” McConnell said. “Bend’s solutions may or may not be Bozeman’s. I’m a believer that each community needs to create what works for them.”

Back to Bozeman

A lot of what Bend has tried in the last few years are things Bozeman’s already considered and in some instances already rolled into place, from a cottage ordinance to searching for underused land to create more housing.

Earlier this week, Terry Cunningham went over his bullet-point list of “Bozeman’s housing crisis situation.” The list is primarily Cunningham’s tweaked speeches and ideas used throughout his successful 2017 campaign to become Bozeman’s newest commissioner.

Bend was one of his main examples as a city to observe.

“I believe that nothing we are experiencing in Bozeman is unique to us, that there are similar cities and towns experiencing the same pressures when it comes to growth and housing,” he said.

The three-bedroom apartment on Michael Grove that he and his wife rented for $800 in 2000 is now $1,600 a month. He said the home they bought in 2001 for $289,500 and later sold is now valued at $762,000.

“I would not be able to save for a home or afford a home in Bozeman if I moved to town today,” Cunningham said.

Right now Bozeman relies on roughly $300,000 in homeowner taxes each year for affordable housing projects. Cunningham said that’s not enough to fund Bozeman’s need as more requests arrive at city hall to make housing projects pencil out.

“The creation of a fund similar to what Bend has is absolutely necessary,” Cunningham said. “How we finance the fund is actually less important to me than its creation.”

Community development director Marty Matsen said before that happens, Bozeman has some decisions to make.

“As much as everyone here wants to say affordable housing is a big issue, it’s another conversation to say, ‘What are you, Joe Homeowner, willing to contribute to take care of that?’” Matsen said.

He said if affordable housing has a future in Bozeman, it’s going to have to be subsidized in some way.

Bozeman doesn’t have consistent state funding for affordable housing and isn’t predicted to qualify for the federal pot available to Bend until 2020. So it falls to the city. Matsen said there are a few ways to respond.

Bozeman residents could agree to more property taxes.

The city could consider fees similar to what Bend’s done that put the cost on builders or developers. Matsen said that could seep back into more expensive homes at market value.

He said there’s also the option of Bozeman pulling money from the general fund, “but then they have to take that from somewhere else.”

Taking a step even further back, Matsen said Bozeman is still defining what affordable housing means.

This summer, Bozeman switched from an incentive-based housing program to mandating some homes in new developments meet specific price points. It was a move aimed toward wannabe homeowners. That typically means people with decent credit and a steady job, who can live on the west end of town and have a vehicle to get around.

“For the cashier at Walmart making a little above minimum wage and who doesn’t have a car or good enough credit to get a mortgage, our affordable housing ordinance does nothing for that person,” Matsen said. “This is what Bozeman has to define. Are we trying to get to the school teachers and nurses, the kids coming right out of college, or help homeless people?”

He said once that’s decided, his office and the city’s upcoming affordable housing manager can build policies and figure out what it would cost to achieve that goal.

“I don’t want people to have the feeling it’s a lost cause. It’s just more complicated than saying, ‘We want affordable housing,’” he said.

Ward said if he had to bet, Bend and Bozeman will continue to grow. He said Bozeman’s access to an airport paired with its university could someday push it ahead of Bend in the very far-off future.

When cities have to balance the cost of popularity, Ward offered a pick-your-poison kind of perspective: build a massive amount of homes in a short time (which can lead to disjointed cities) or find a way to adjust the economy so wages can keep up (which can leave some behind).

“Every place has a problem,” Ward said. “Bend and Bozeman, they’re not going anywhere. Cities can look at what they can do to mitigate the problem. But the main lesson is you’re unlikely to solve your affordable housing crisis until you make Bend not cool or Bozeman not cool.”

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Katheryn Houghton can be reached at khoughton@dailychronicle.com or at 406-582-2628. Follow her on Twitter @K_Hought.

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