Search
Username

Wednesday, March 4, 2009

Money, Money, Who Gave the Money? (Cont.)

On Feb. 20 The Eye reported that Orestar, the Oregon state campaign finance database, showed that The Bulletin had given a $4,000 in-kind contribution to

Posted By on Wed, Mar 4, 2009 at 7:25 AM

On Feb. 20 The Eye reported that Orestar, the Oregon state campaign finance database, showed that The Bulletin had given a $4,000 in-kind contribution to the Bend Business PAC, the political arm of the Chamber of Commerce, before the last election.


But now an official with the Secretary of State's Office says it was just an honest mistake on the part of the Chamber's PAC.

Prodded by local blogger Bruce Ewert, Nancy E. Ferry of the Secretary of State's office contacted Chamber of Commerce Board Member Troy Reinhart and Jennifer High, the person who entered the contribution. High's story was that the $4,000 really was contributed by the Iverson Group, a Prineville ad agency, to buy Bulletin advertising. Iverson should have been listed as the contributor, not The Bulletin, High said. "Jennifer assured me that they were not trying to hide anything, they just didn't understand how to report it," Ferry e-mailed Ewert.

Based on High's and Reinhart's word, Ferry was willing to let High amend the filing to indicate that the Iverson Group, not The Bulletin, made the contribution.

Asked whether she had any documents or other evidence to corroborate High's and Reinhart's story, Ferry told The Eye yesterday: "Well, I believe it was an honest mistake based on talking to them. ... No, I don't have any documents that actually show that. We don't go out and create investigations. If you were to file a formal complaint we would investigate."

  • Pin It
  • Email
  • Favorite

Saturday, February 28, 2009

California Dreamin' and Bend Reality

In a way, you have to admire the indestructible optimism of Bend realtors. If you could take an extract from their brains and turn it

Posted By on Sat, Feb 28, 2009 at 12:00 PM

In a way, you have to admire the indestructible optimism of Bend realtors. If you could take an extract from their brains and turn it into a pill it would be better than Prozac.


In a post on his blog two days ago, Jim Johnsontook a look at an Associated Press story reporting an uptick in home sales in California last month and saw it as a harbinger of better times soon for Bend.

"Home sales in the Western U.S. surged in January as first-time home buyers, real estate investors and others seized on bargain-priced foreclosed homes in California, Nevada and Arizona, according to two reports released Wednesday," The AP said.

"A total of 74,000 existing homes and condos were sold in January in the 13-state region. Sales were up 32.1 percent from the same month in 2008, without adjusting for seasonal factors, according to the National Association of Realtors."

Based on this rough sketch, Johnson painted a rosy scenario:

"California home sales are a leading indicator of Bend, Oregon home sales. This tells me our real estate market may see the bottom this spring or summer. I showed property last weekend to two different cash buyers and they both wrote offers on bank foreclosures in Bend."

Some observations by The Eye:

  • A total of 74,000 homes and condos sold in a 13-state region is not an impressive number, especially if that region includes California.
  • Johnson's two, count 'em, two offers on foreclosed Bend properties is not an impressive number either.
  • As the AP story says, the surge in California sales was propelled mainly by investors (read "speculators") coming into the market to snap up bargains on foreclosed properties.
  • Median home prices in the West dropped 26% in January from the previous year to $220,000, the realtors' association said. (The same pattern, incidentally, holds true in Florida, where January sales were 24% higher than in the same month last year - but the median sale price for existing homes has plummeted 33% in a year, to $139,500 from $206,900.) If the market really had turned around shouldn't we see prices rising, or at least holding steady?

Believe it or not, The Eye really would LIKE to see the Bend housing market bounce back (though not to the insanity of 2004-2006). After all, we live here and own property here too.

But continuing to spin gossamer dreams out of every thin thread of semi-encouraging news is not going to make it bounce back any sooner. Our guess is that no matter what happens in California, we won't see any real turnaround here until our excess housing inventory has been drained off and prices drop to affordable levels.

  • Pin It
  • Email
  • Favorite

Friday, February 27, 2009

Trimming the Tourist Industry's Juicy Cut

A move's afoot in the state Legislature to change the formula under which the tourist industry gets the lion's share of room tax revenue, and

Posted By on Fri, Feb 27, 2009 at 2:03 PM

A move's afoot in the state Legislature to change the formula under which the tourist industry gets the lion's share of room tax revenue, and the industry is squealing.


Under present state law, 70% of the funds generated by taxes on hotel rooms and other visitor accommodations must go to tourism promotion and facilities. That's a huge windfall for organizations like the Central Oregon Visitors Association (which, according to Director Alana Audette, got nearly half of its $2 million operating budget from transient room taxes) and its counterparts throughout the state.

So they're not at all happy about Senate Bill 440, which would uncouple the room tax from tourism and allow the money to be used for anything the city or county that collects it sees fit.

According to KCBY-TV in the coastal town of North Bend, Katherine Hoppe, director of promotions and conventions, told the city council Tuesday night: "Right now because tourism generates lodging tax, which the majority of which the cities keep already, we feel like when you invest back into tourism, you're already investing back into the cities because you're creating a larger tax base the more visitors you bring in."

If you can figure out the logic in that George W. Bushian statement you probably should be a professor of philosophy at Oxford.

The more coherent arguments The Eye has heard for spending 70% of room tax revenue on tourism promotion are (A) that tourists bring in money and create jobs and (B) that tourism encourages businesses to locate here because their executives visit the place, fall in love with it and decide to move their businesses here.

As for Argument A: Tourists undeniably do bring in money, and the tourist industry does create jobs. But they're mostly low-wage, no-benefits, often part-time service jobs. And at the first downturn in business those jobs are gone. Tourism is a nice adjunct to the local economy, but it'll never be a solid foundation for it.

Argument B is even shakier. We've been promoting the hell out of Central Oregon as a tourist destination for decades, and very few big private-sector companies that pay living-wage jobs have been lured in. A CEO might visit Bend, like it and buy a vacation home in Broken Top or Pronghorn, but that doesn't mean he's going to move his company here; decisions like that have to be based on more hard-headed calculations.

The City of Bend took in more than $3.4 million from its 9% transient room tax in the 2007-2008 fiscal year. Suppose we devote one-third of that to tourism promotion instead of 70%. That would put almost $1.4 million more a year in the city's treasury.

Without even trying, The Eye can think of a half-dozen better things than tourism promotion to spend it on - like plowing the streets, fixing potholes and keeping cops on the force.

  • Pin It
  • Email
  • Favorite

Thursday, February 26, 2009

Getting By on Looks and Charm

Forbes magazine columnist Joel Kotkin, whose comments about the economic ills of our state and city The Eye focused on recently, was on OPB's "Morning

Posted By on Thu, Feb 26, 2009 at 11:06 AM

Forbes magazine columnist Joel Kotkin, whose comments about the economic ills of our state and city The Eye focused on recently, was on OPB's "Morning Edition" today offering more of the same -- along with some encouragement.


Kotkin's main point was that it no longer works (if it ever did) to try to build an economy solely on the basis of a place's niceness. Oregon and California have coasted along on their looks, he said - "It's sort of like a really nice-looking male or female at a bar; they don't have to work very hard because they're gonna get attention" - but the competition from other states is too tough for them to get away with it anymore.

The Eye doesn't buy Kotkin's argument that "doctrinaire" environmental regulation has driven businesses out of the state, but we couldn't agree more with his statement that "you have to build an economy that's based on something other than people moving from somewhere else because it's nicer" - a lesson that Bend, as well as Oregon, needs to learn ASAP.

Kotkin ended on an upbeat note, offering some reasons to hope for an Oregon comeback:

"Oregon has all the right things. It's a nice place to live, it has a decent education system, it has a base of technology, much of it coming from California; it has the international trade component, it has an agricultural component - it has many, many things going for it. So whereas it's sometimes difficult to sit down and say, 'Well, how does Michigan come back?' I think you can figure out how Oregon can come back."

  • Pin It
  • Email
  • Favorite

Wednesday, February 25, 2009

Metolius Development Rights, and Wrongs

State officials have come up with a plan that would keep destination resorts away from the Metolius, and the pro-resort forces are, predictably, fuming and

Posted By on Wed, Feb 25, 2009 at 1:06 PM

State officials have come up with a plan that would keep destination resorts away from the Metolius, and the pro-resort forces are, predictably, fuming and sputtering.


The rules now being backed by the state Land Conservation and Development Commission would block both a 640-acre "eco-resort" that Dutch Pacific Resources LLC wants to build within the Metolius Basin and a 2,500-unit monstrosity that Ponderosa Land & Cattle Co. proposed to build on the fringe of the basin.

As a sort of consolation prize the DLCD is offering to let the developers build resorts on land near Round Butte, although they'd have to be a lot smaller than the ones they've proposed - 650 units for Ponderosa's and 350 for Dutch Pacific's. This offer apparently also is meant to appease Jefferson County, which presently has no destination resorts and would dearly love some.

The Bulletin editorial page - which has written five editorials on the Metolius issue already this year, among other things comparing Gov. Ted Kulongoksi to Josef Stalin - was in its usual fine form this morning, claiming Kulongoski was dealing from the bottom of the deck:

"The resort developers would be offered first dibs on land for destination resorts they may not even want near Round Butte, east of Lake Billy Chinook. The resorts would have to be smaller than what might have been allowed in or near the Metolius basin. ...

"Some people will agree with Kulongoski that the Metolius basin deserves better protection. And perhaps they're right. But if the state is going to slash development rights, it shouldn't attempt to weasel out of its moral obligation to compensate affected landowners fairly."

It's that last sentence that The Eye mostly takes issue with. What "rights," exactly, are the resort developers being deprived of? What should they be "compensated" for?

Here's the situation: Dutch Pacific and Ponderosa own forest land near the Metolius. They want to put destinations resorts on it and, hopefully, make a barrel of money. The Jefferson County Commission has obliged by designating the area encompassing their property for destination resort development. But that designation is still under appeal in the courts.

If Dutch Pacific and Ponderosa are not allowed to build their proposed resorts they'll still own the land and still be free to use it for the purpose it's zoned for - growing timber. They won't have "lost" anything except the purely speculative barrel of money they MIGHT have made IF they had been able to build the resorts and IF the resorts had been successful.

If the state has a moral obligation to compensate developers for that, The Eye thinks it also should compensate us for the $80 million we would have won in the Powerball lottery if we had bought a ticket and our numbers had come up.

  • Pin It
  • Email
  • Favorite

Monday, February 23, 2009

How Green Was My Golf Course

"Drop in groundwater perplexes scientists," reads the headline on the top story in today's edition of Bend's Only Daily Newspaper.

Posted By on Mon, Feb 23, 2009 at 4:24 PM

"Drop in groundwater perplexes scientists," reads the headline on the top story in today's edition of Bend's Only Daily Newspaper.


Seems those scientists have discovered a "mysterious" drop in the underground water table in the area bounded by Redmond, Prineville and Powell Butte. "One mile south of Redmond, for instance, they've seen water levels underground decline nearly 20 feet in the last 15 years," says the story.

It goes on to explain that the US Geological Survey speculated in 2008 that the decline could be partly due to decreasing rainfall since the 1950s. But that isn't enough to explain it all, the USGS said: Wells "in the more developed parts of the basin appear to show declines larger than what would be expected due to climate alone."

If the water table continues to fall, said Kimberley Priestley of the conservation group Water Watch of Oregon, it could lead to - gasp! - restrictions on development. "I would think it would be of interest not only to the state but to developers," she told The Bulletin. "If we're seeing declines [in the water table], then that could bring a whole new layer of management."

The scientists may be "perplexed" (or at least The Bulletin says they are) but the explanation seems pretty obvious to The Eye: All those new lawns and golf courses that have been created in the past 10 or 15 years take a lot of water, and they mostly suck it out of the ground.

We're hoping some kind of management plan can be developed and enforced for the Central Oregon aquifer before it meets the fate of the Ogallala Aquifer, the vast underground reservoir in the High Plains states that's being pumped dry at an annual rate equivalent to the flow of 18 Colorado Rivers.

We're also hoping (without much hope) that the results of the USGS study give pause to those who are screaming "Full speed ahead!" for destination resorts that would pump water out of the Metolius Basin.

Congratulations to The Bulletin for having the integrity to report this story and play it at the top of its front page. We hope its editorial board will have the integrity to draw the logical conclusions.

Gosh 'n' gollies - when you pump more water out of the ground than nature puts back in, the water table goes down! Who'd a thunk it?

  • Pin It
  • Email
  • Favorite

Friday, February 20, 2009

The Money Trail Leads to Some Strange Places

The Juniper Ridge Info blog did a fine job of getting the skinny on who got how much from whom in the last Bend City

Posted By on Fri, Feb 20, 2009 at 11:31 AM

The Juniper Ridge Info blog did a fine job of getting the skinny on who got how much from whom in the last Bend City Council campaign, and the results are intriguing - and in one respect rather surprising.


According to records on file at ORESTAR, the state's campaign database, Mayor Kathy Eckman raised a total of almost $38,500, of which nearly $17,700 - about 46% -- came from Central Oregonians for Affordable Housing (the political arm of the Central Oregon Builders Association) and the Central Oregon Association of Realtors.

Tom Greene (who happens to be the president of COAR) took in more than $27,700, of which about $16,300 came from COAH and COAR - nearly 59%. Jeff Eager got roughly $40,400, with about $20,700 coming from COAH and COAR. That's 51%.

Adding it all together, of the total of $106,600 raised by the three members of the builder/realtor slate, more than half came from just two organizations.

And that's not counting contributions from individuals involved in the building, real estate and development industry. For instance, Eager received $3,000 from various members of the Ward family - major Bend landowners and developers. Eckman got $200 from realtor Steve Scott, $250 from hotelier and developer Wayne Purcell and $250 from Justin Ward. Greene got $1,250 total from Justin and Kim Ward.

If you think those councilors won't remember who paid to put them in office I have a real nice oceanfront property in Burns to show you.

Probably the most intriguing discovery made by the blog, however, is that The Bulletin is on record as giving $4,000 in in-kind contributions (presumably advertising space and/or printing?) to the Bend Business PAC, which is the political arm of the Bend Chamber of Commerce. That's by far the biggest contribution made to BB-PAC in the last election cycle.

Wait, it gets even better: The candidates' contribution reports show that the same PAC gave $1,625 each in in-kind contributions to Eckman, Eager and Greene and another $1,625 to candidate Don Leonard, who was unsuccessful in his bid to unseat Jim Clinton.

We'll let the blog's concluding comment speak for itself:

"It is interesting to see our only local daily paper, the Bend Bulletin, has decided to fund some candidates in the City Council race as well as reporting on them. This would seem to be a major ethical violation by the elephant of local journalism. That's an interesting and somewhat troubling juxtaposition - our only daily newspaper funds a local political PAC that backs several candidates, editorializes for electing all but one of them before the election, and then editorializes for the last of the four [Leonard] to be appointed to fill the vacancy after the election. ...

"And this was done without any acknowledgement of the Bulletin's financial interest in the election.

"That's our Bulletin. And these are facts that need much wider knowledge in our currently financially challenged little city."

PS: If you want to see BB-PAC's report to the Secretary of State's office on The Bulletin's $4,000 in-kind contribution, here it is. 

UPDATE: An official with the Secretary of State's office now says she believes the report showing The Bulletin as the contributor was an honest mistake by the Bend Business PAC and has allowed the PAC to amend the filing to indicate that the Iverson Group, a Prineville ad agency, was the contributor instead of The Bulletin. Read about it here.

  • Pin It
  • Email
  • Favorite

How the Web Was Captured by Sauron

In a post delightfully headlined "Death by Moron," blogger Mark Morford of the San Francisco Chronicle rips into the trolls, orcs, goblins and other repugnant

Posted By on Fri, Feb 20, 2009 at 7:57 AM

In a post delightfully headlined "Death by Moron," blogger Mark Morford of the San Francisco Chronicle rips into the trolls, orcs, goblins and other repugnant Tolkienesque life forms that infest Internet forums.


"Here is my strange confession: I miss my hate mail," he begins. "It's an odd thing to admit, but in a perverse sort of way, I actually miss the wretched river, the rancid flow of puerile, nasty, sickeningly homophobic email I used to receive on a regular basis from the ultra-right and the Christian right and the Mormon right and the Bush-impaired whenever I would post a friendly, pointed column full of tangy liberal attitude. Which is, of course, all of them."

Where did the hate mail go? It turned into hateful commentary on websites, of course. And it's more wretched, rancid, nasty and sickening than ever.

"I was, for years, an enthusiastic advocate of the egalitarian, free-for-all, let's-level-the-playing field aspect of the Web," Morford writes. "More voices! More feedback! More participation! Bring it on!

"Not anymore. As I've mentioned before, I now tend to agree with 'West Wing' creator Aaron Sorkin, who said, 'Nothing has done more to make us dumber or meaner than the anonymity of the Internet.' Hyperbole? Not by much."

He goes on to observe, as The Eye also has, that the anonymity of the Web "tends to bring out the absolute worst in people, the meanest and nastiest and least considerate. Something about not having to reveal who you really are caters to the basest, most unkind instincts of the human animal. Go figure.

"Thoughtful discourse? Humorous insight? Sometimes. But mostly it's a tactless spectator sport. It's about being seen, about out-snarking the previous poster, about trying to top one another in the quest for ... I'm not sure what. A tiny shot of notoriety? The feeling of being 'published' on a major media site? Or is it the thrill that can only come from hurling a verbal Molotov at the Great Satan of "corporate media," and then running away like a snorting 8-year-old? All of the above?"

Bend, despite its rep as a nice, friendly small town, is far from immune to this sort of thing, as even five minutes spent randomly reading the comments on the BendBubble2 blog will demonstrate.

One of the most disheartening side effects of the troll infestation is that a sort of Gresham's Law applies to Web discussions: Bad comments drive out good comments. The trolls drive away participants who have something worthwhile to say.

As Morford puts it, "the coherent voices are, by and large, increasingly drowned out by the nasty, the puerile, the inane, to the point where, unless you're in the mood to have your positive mood ruined and your belief in the inherent goodness of humanity stomped like a rainbow flag in the Mormon church, there's almost no point in trying to sift through it anymore. The relentless nastiness is, quite literally, sickening."

The solution, Morford says, is easy: Don't allow anonymous posting. Require everybody who wants to participate in on-line discussions to identify him- or herself.

But that'll never happen, he concedes, because those anonymous posters generate website traffic, and heavy traffic is what the advertisers want to see. They don't care about quality, only quantity.

The only hope Morford holds out is the slim one that the novelty of anonymous posting will wear off "relatively soon." The Eye, alas, cannot share his hope. The human capacity for nastiness has no limits.

  • Pin It
  • Email
  • Favorite

Thursday, February 19, 2009

Alley's First Out of the Gate in Governor Race

Allen Alley, the Republican who lost to Democrat Ben Westlund in the battle for the secretary of state's office last year, is taking a shot

Posted By on Thu, Feb 19, 2009 at 10:53 AM

Allen Alley, the Republican who lost to Democrat Ben Westlund in the battle for the secretary of state's office last year, is taking a shot at the governorship.


Oregonian blogger Jeff Mapes reports that Alley, 54, is the first person of either party to announce his candidacy to succeed Gov. Ted Kulongoski, who's term-limited out after 2010.

"Alley brings an unusual set of experiences to the governor's race," Mapes writes. "He is a former automotive and aerospace engineer who came to Oregon in 1992 and helped found Tualatin-based Pixelworks, which provides chips to the display industry.

"He became active in a number of civic and business groups and worked as a deputy chief of staff for Democrat Kulongoski before leaving in 2008 to run for treasurer. Although defeated by ... Westlund, Alley said he was encouraged that he came as close as he did - he lost by about six percentage points - in his maiden political race in a tough political year for Republicans in Oregon.

"'I just think this office fits my background,' said Alley, arguing that his experience in business and with the governor gives him a good perspective on how to boost the state's economy."

Alley's record at Pixelworks might not be the strongest point in his resume: The company has been struggling for several years although it finally showed a profit in 2008.

Another question is whether Alley is sufficiently far right to win a Republican primary. Mapes noted in a post he wrote early this month that "in a race for governor, voters would be delving much deeper into Alley's philosophy. For example, he essentially dodged the abortion issue in the treasurer's race, saying it didn't have anything to do with the job. If he runs for something else, he acknowledged, 'I have to have a public position on' abortion."

One thing that seems certain is that, based on how Alley ran for state treasurer, we can expect a hard-hitting and energetic gubernatorial campaign from him no matter who his opponent is.

  • Pin It
  • Email
  • Favorite

Wednesday, February 18, 2009

Connecting Some Dots on the Metolius

Carla Axtman of the Blue Oregon blog takes a look at the lobbying going on in favor of the proposed Metolius destination resorts and raises

Posted By on Wed, Feb 18, 2009 at 8:04 AM

Carla Axtman of the Blue Oregon blog takes a look at the lobbying going on in favor of the proposed Metolius destination resorts and raises some intriguing questions. For instance: Why is Rep. Gene Whisnant, whose southern Deschutes County district is nowhere near the Metolius, getting contributions from resort developers?

Since the end of the 2007 legislative session, Axtman notes, Dutch Pacific Resources - which wants to build a 647-acre "eco-resort" within the Metolius Basin - has given about $20,000 in campaign donations to Oregon legislators and candidates and PACs, including both Democrats and Republicans.

Also, she continues, William Colson of Ponderosa Land & Cattle Co. "heaped a generous $15k to the campaign of State Senate Minority Leader Ted Ferrioli (R-John Day) in 2006. Ferrioli wasn't up for reelection until 2008, where he essentially ran unopposed. Color me cynical, but I'm going to guess that Ferrioli redistributed generous portions of that contribution among his GOP member candidates. There's no way to definitively track that money trail, but that's my educated guess."

Since the end of the 2007 session, Axtman reports, Ponderosa has given more than $32,000 to legislative candidates and PACs, most of it to Republicans. "Two of the benefactors, Ferrioli and Representative Gene Whisnant (R-Sunriver), have gone out of their way to shill for the development. There is some possible justification for Ferrioli's work on this, as the proposals are within his district. But Whisnant? This is outside his constituency. So the only explanation for his involvement are the cash contributions to his campaign."

Of course that explanation isn't the only possible one; Whisnant could be supporting the destination resort because he just likes destination resorts, or because he's a strong property-rights guy, or both.

Axtman also takes a swing at Bend's Only Daily Newspaper, which she says "has consistently shilled for the developers and supporters of the resorts as well, virtually ignoring the uptick in support by locals for banning resorts at the Metolius. With the exception of a Nick Budnick piece this week on the Oregon Water Resources Department's second thoughts on giving water rights to the Ponderosa developers, The Bulletin appears to be the lapdog for those who flog these resorts. And from what I've seen, the PR departments of these interests have taken full advantage."

  • Pin It
  • Email
  • Favorite

Tuesday, February 17, 2009

Report from the Eye of the Hurricane

Forbes magazine columnist Joel Kotkin took a peek this week at the outlook for the Oregon economy in general and Bend's in particular, and what

Posted By on Tue, Feb 17, 2009 at 12:00 PM

Forbes magazine columnist Joel Kotkin took a peek this week at the outlook for the Oregon economy in general and Bend's in particular, and what he saw ain't pretty.


"A year ago, things seemed very different," he writes. "Sunbelt boom states like California, Arizona and Nevada were already heading into deep recession, but green Oregon seemed oddly golden. Both its small cites and one big town, Portland, were outperforming the national norms. Oregonians saw their state as better--not only in terms of green and good, but also in terms of basic job growth.

"But since last winter, Oregon's unemployment rate has soared from barely 5.5% to well over 8%, the sixth worst in the nation. Indeed, according to a recent projection by the University of California at Santa Barbara (UCSB), Oregon's jobless rate could reach close to 10% by the end of the year."

Kotkin blames Oregon's "greens" and liberals for driving the semiconductor industry and business in general away (this IS Forbes, after all): "Always a political bellwether state, Oregon has moved inexorably left, increasingly dominated by both its public sector and the particularly strong green movement. Semiconductor expansion soon started to go south - or in this case, further east (to Idaho) or across the Pacific to Asia.

"Only one thing remained to drive the economy: housing," he goes on. "A torrent of Californians were heading north - cashing out of the overpriced Bay Area, Sacramento and Los Angeles - and buying new homes in Oregon. Some sophistos sashayed their way into trendy places like Portland's Pearl District, but many others looked to the charming smaller towns of the Willamette Valley and central Oregon. ...

"This dependence turned into a debilitating addiction. When in 2007, the great California housing bubble collapsed, the inflow of people and dollars dropped off. Meanwhile, the remnants of lumber industry fell victim to the housing bust."

And then our own little Paradise in the Cascades gets its lumps:

"Nowhere are the effects of this clearer than in Bend, a spectacular town of 75,000 located amid volcanic peaks in the center of the state. Californians had considered Bend a favorite spot for second homes and relocation. About a year ago, notes real estate appraiser Steve Pistole, prices were rising 2% a month, while those in Portland were "only" rising 8% a year.

"But to visit Bend now is to be in the eye of housing hurricane, with nearly deserted housing tracts, woefully empty hotels and residential second-home developments. Unemployment in the housing arena, according to the UCSB, could reach 15% next year."

Kotkin wraps up with a few quotes from Michael Taus, 38, a recent California émigré who sees young entrepreneurs like himself as the foundation of a reborn Oregon economy:

"A recent arrival from Los Angeles, Taus made it big as one of the founders of Rent.com, which was sold to eBay in 2005. He's only lived in Bend for a few months, but he has already launched his own start-up and consults for several other local firms.

"Taus believes others of his generation will want to establish businesses in Oregon, lured by both its lifestyle and affordability."

Now where have we heard THAT before?

  • Pin It
  • Email
  • Favorite

Sunday, February 15, 2009

Through the Looking Glass With John and Bill

In his Sunday column, Bulletin Editor John Costa talks to three of Bend's biggest movers and shakers to find out why the Bend real estate

Posted By on Sun, Feb 15, 2009 at 10:52 AM

In his Sunday column, Bulletin Editor John Costa talks to three of Bend's biggest movers and shakers to find out why the Bend real estate market went belly-up and how to keep it from happening again. They offer a number of ideas. Some of them make sense; one is just crazy.


Developer Mike Hollern blames the Doctrine of Bend Exceptionalism - the peculiar notion that Bend is so special that it's immune to outside economic forces.

"We were overwhelmed by the amount of money pouring in," Hollern told Costa. "We thought that we were different from the rest of the country. It turned out that we are not so much [different]."

Hollern and attorney Neil Bryant said Bend didn't do enough to provide roads, sewers and other essential public services as growth rampaged ahead of their capacity. "There was overwhelming growth for sure, [but] city leadership didn't react forcefully enough on [things like] roads, transportation and sewer capacity," Bryant said.

(It would have been easier for City Hall to provide adequate infrastructure, of course, if builders and developers hadn't so stubbornly resisted any attempt to increase Systems Development Charges to a realistic level.)

Hollern and Bryant agreed Bend needs to spend more money to develop a first-rate education system, especially higher ed. They're right - good schools are a more important "quality of life" factor for most folks than bike trails and trout streams.

So much for the sensible ideas. Now comes the crazy one.

Old Mill District developer Bill Smith tells Costa the reason for the real estate bubble and subsequent bust was ... are you ready for it? ... we didn't build enough houses.

"Essentially, [Smith] said we were lulled into our own sense of superiority and did not address land use problems," Costa writes.

"We ended up, he said, critically short of residential and industrial land.

"Because the city government was so slow to bring more land into the urban growth boundary, the real estate bubble was magnified here.

"That makes sense.

"Lots of people want to move here.

"The land laws restrict access, thus creating exclusivity with home prices spiraling upward."

Unless Bill and John spent the last five years in a cave out near John Day, they should understand that what drove Bend home prices to insane levels was not that there weren't enough houses for the millions who were desperate to live in our precious "paradise"; it was a speculative frenzy, pure and simple.

People (from Bend, Portland, California and all over the map) were frantically buying properties in the hope of flipping them to make an overnight killing, aided and abetted by dishonest appraisers who were willing to inflate home values and banks that were eager to lend hundreds of thousands of dollars to anybody who had a pulse. It was a classic speculation-driven bubble, no different in its essentials from the Dutch tulip craze of the 1630s, the South Sea Bubble of 1720 or the dot.com mania of the 1990s.

If Smith's and Costa's Alice-in-Wonderland logic was correct, we would still have people flocking to Bend and snapping up houses at inflated prices instead of having thousands of unsold homes on the market despite plunging prices.

And if Oregon's and Bend's land use restrictions are to blame, how come the bubble-and-bust cycle was even worse in areas - such as South Florida - that have virtually no land use restrictions?

At the end of his column, Costa has a bullet-point list of things Bend needs to do to avoid another bubble and bust. Here's our list:

  • Invest in things that really protect and improve Bend's quality of life - schools, parks, police and fire protection, libraries, good public transit, good roads - instead of continuing to market this town on the basis of blue skies and bullshit.
  • Don't let growth outpace our ability to pay for the infrastructure that growth demands. (Raising SDCs would help.)
  • Take some of the buckets of money we spend to attract tourists and use it to attract businesses and industries that bring living-wage jobs.
  • Encourage developers and builders (maybe through some kind of SDC credit or deferral) to build realistically sized houses that ordinary people can afford, instead of 5,000-square-foot McMansions designed to sell for half a million dollars.
  • Pin It
  • Email
  • Favorite

Newsletter Signup

Cascades Reader Logo Cascades Reader

Get your daily dose of news for Central Oregon and beyond, delivered to your inbox five days a week. Powered by the Source Weekly.

Newsletter Signup

Cascades Reader Logo Cascades Reader

Get your daily dose of news for Central Oregon and beyond, delivered to your inbox five days a week. Powered by the Source Weekly.

© 2019 LAY IT OUT INC | 704 NW GEORGIA AVE, BEND, OREGON 97703  |   Privacy Policy

Website powered by Foundation