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Tearing Down the Affordable Housing Fee 

Scrapping or capping the affordable housing fee won’t do anything to revive Bend’s moribund building industry, but it will hamstring the city’s present and future efforts to ensure that people who work here will be able to live here.

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Five years ago, in the midst of one of the craziest real estate booms in the country, Bend slapped a fee on new construction projects to raise money to help create more affordable housing.

The fee, the only one of its kind in Oregon, has been successful in achieving that objective. So far it has generated more than $2.7 million, and it's leveraged many times that amount in federal matching funds.

But the Central Oregon Builders Association has never met a fee it likes, and now that the affordable housing fee is coming up before the city council for renewal, COBA is doing its best to kill it - or at least put it in the intensive care unit.

If COBA can't talk the council into just letting the fee expire, it hopes to persuade it to adopt a series of revisions. One of them is to cap the fee at $1,500 for any single-family residential project and $5,000 for any other type of project.

The argument for killing or capping the fee is the same one COBA habitually uses to attack Systems Development Charges or any other fee: It (supposedly) discourages building and development, and right now Bend needs all it can get.

The argument's a weak one. According to city figures, last year there were only five projects that exceeded the thresholds COBA proposes. They paid a combined total of $119,000 in affordable housing fees. If the caps had been in place they would have paid only $25,000. That's a difference of $94,000 - an average of $18,800 per project. It's hard to believe somebody planning to build a multimillion-dollar house or a $100 million office complex would walk away because of a few thousand extra dollars.

Another argument for weakening or killing the fee is that the real estate market has imploded and housing costs in Bend aren't as sky-high as they were in 2006. That's true; back then the median home price was around $350,000, and it's now hovering below $200,000.

But $200,000 is still out of the reach of many of the people of this community, especially with financing hard to come by. Besides, there's the chance (remote though it seems now) that prices will rise again, and if the affordable housing fee is scrapped or cut it will be a virtual political impossibility to reinstate it.

We've said this before and we're going to keep saying it until it sinks in: The Bend real estate market - and the Bend economy - is not in the crapper because of the affordable housing fee or SDCs or any other city fee. It's in that lamentable condition because there are too many buildings and not enough people with the resources and/or the inclination to buy them.

Scrapping or capping the affordable housing fee won't do anything to revive Bend's moribund building industry, but it will hamstring the city's present and future efforts to ensure that people who work here will be able to live here. The city council should join us in giving this idea THE BOOT.


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