It seems so simple: there’s a housing shortage—not just in Bend, but nationally—so we just need to build more houses, right?

There was a time, just before the financial crisis in 2008, when home building was keeping up with demand nationally. In 2004 and 2005, there were about two million housing starts each year, and that is the number that economists now say would alleviate the current shortage across the country going forward. But there were only 1.3 million housing starts in 2025.

What’s a housing start? Basically, it’s when the shovel hits the dirt at a new construction homesite. Before breaking ground, however, there is a process that includes obtaining a Single Family Residence (SFR) permit. 

In 2005, there were 1,948 SFR permits issued in Bend, an average of 162 per month. In the early part of 2006, SFR permits were keeping pace, but by July, were dropping. There were 1,349 SFR permits issued that year. In 2007, there were only 676 SFR permits issued—an average of 56 per month.

In the 19 years since, the home construction industry has worked hard to overcome challenges facing their industry, but is still not on track to provide enough housing starts to ease shortages.

Last year—even with a spike of 78 SFR permits in April 2025—there were only 519 total issued in Bend, a monthly average of 43.

Nationally, housing starts were down 2.8% in January of this year compared to December. In Bend, SFR permits were up 13% in January, but the numbers this percentage is based on are small. There were 35 SFR permits obtained in January, up from 31 in December.

Although local, state and national politicians are increasingly talking about the housing shortage, and many for-profit and nonprofit organizations are spearheading initiatives, increasing the rate of home building faces multiple challenges in today’s climate. According to the National Association of Home Builders, there are five economic limitations to increasing home starts: 

• Labor
• Land
• Loans
• Lumber
• Legal

Labor

Skilled trade shortages are widespread nationally and locally. Because of demand for their services, trade workers earn higher wages, which adds to the cost of building a home. In Bend, there are collaborative initiatives to raise awareness of Career and Technology Education (CTE) pathways. Central Oregon Community College (COCC) works with local high schools and businesses to provide apprenticeships and training for future tradespeople.

Land

The median price of a lot for a single-family detached home is $152,000 on the West Coast. In Bend, the median sales price of a residential lot was $372,500 in 2025. When broken out by zip code, the median sales price of a lot varies. The median sales price of a lot in the 97701 zip was $115,000 last year; 97702 was $300,000; and 97703 was $402,900.

Loans

Because of increased caution among banks and lenders since the financial crisis, Interest rates are higher for home builders than home buyers, and builders are typically required to put at least 20% down for a loan. 

Lumber

Shortages of construction materials that began during the pandemic have continued to keep prices high and tariffs have made some of them even more costly.

Legal

About a quarter of the cost of a newly-built home goes to legal fees. Arcane permitting and zoning laws contribute to the high cost of legal fees. Regulatory fees for a single-family home are about $30,000 higher since 2011.

 

We Need More Houses. Why Aren’t More Being Built? New York Times, February 2026
Single-family housing construction is down. What’s hampering supply? Marketplace, March 2026