Builders in Bend want the city to kick-start their stalled industry by giving them a break on Systems Development Charges.
As reported by KTVZ, the Central Oregon Builders Association came before the city council last night with a proposal to defer SDCs on new home and business construction for nine months, interest-free, to help stimulate more building.
SDCs are supposed to help offset the infrastructure impacts of new construction by paying for things like sewer, water and road improvements. There was no word on how much SDC revenue the city would lose if it adopts COBA’s plan – which, unsurprisingly, is also supported by the Central Oregon Realtors Association (CORA).
“Bend City Manager Eric King says it’s an attractive proposal,” KTVZ reports, “but the city will be cautious in its decision, so it doesn’t end up with a financial burden.
“King also says officials will have to find other places to get money to pay for the SDCs, until the builders deferment period is up. That would [mean] stretching the budget in the near future, but possibly bring in more revenue down the road” if the SDC deferral results in more construction, which would mean more building permit fees and property taxes.
“If the stimulus package is adopted, it would be in place for the next 12 months, in hopes the market will pick back up by then,” KTVZ adds.
The Eye doesn’t claim to have any great economic expertise, but … isn’t the COBA/CORA proposal sorta like prescribing aspirin for somebody with bubonic plague?
The building industry here – and all over the country – is in the tank because developers aren’t building new houses. Developers have stopped building new houses because people have stopped buying them and there’s a huge glut of already-built houses on the market. People have stopped buying houses because lenders have stopped lending money. And lenders have stopped lending because they’re struggling under mountains of bad debt accumulated back in the days when it seemed home prices would keep rising at 25% a year forever and they were giving no-money-down mortgages to anybody who could fog a mirror.
The Eye doesn’t see how deferring SDC payments will change any of that. What The Eye does foresee is that if the housing market doesn’t turn around in a year, the builders and realtors will be back asking for another year – and the city’s budget, which already is stretched tighter than a size-32A brassiere on Pamela Anderson, will snap like a worn-out rubber band.
But The Eye could be wrong. Would anybody from COBA and/or CORA like to point out how?
This article appears in Jul 3-9, 2008.
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Nice gratuitous link to PA’s boobs down at the end… The real question is will this in any way allow the builders to back out of paying all or a portion of fees. For example, if in nine months things still suck, can they pressure the city to allow another nine months? Seems like the City would probably cave if they did.
I REALLY don’t see how this helps anyone, and it potentially puts the city in a bind, depending on how it plays out and how much revenue the city ends up foregoing while it plays out. I think the Eye is right that this is not a local problem, so a local fix probably won’t do much good. I think really this is just an excuse to put some flexibility in the builders’ pocketbooks and a chance to rail on SDCs which is a favorite past-time of theirs.
Also, if this City is going to go this route, this seems like a great opportunity to do something creative and, say, cut fees for infill development or projects that adhere to certain standards for smart growth, near transit, for affordable housing, and so forth, rather than as a blanket waiver. But nothing that progressive would ever happen here… not until this community actually starts to give a crap about these sorts of things.
its about time i wish more people would open there eyes
COBA, We dont feel sorry for you, most builders in COBA depend on politics and the COBA club of good ol boys to move up the COBA ladder. I know many COBA builders who dont even have the skill to build a dog house, they are called paper builders by thier subcontractors, they have never used a hammer. The real tradesmen and skilled craftsmen in this town dont need or respect COBA political builders who have raped our city with crazy housing prices and greed.
So now you want help from the city? The city is broke as well, are you stupid they cant even fix the roads, they are over budget as they have spent all permit money last year.
COBA members looks as though you need to learn to work harder,build homes for less and attract buyers with a nice home for a fair price as Bend is one of the most overpriced citys in the United States.
Time to sell your Hummer and that large home on the Butte…..oh sorry I forgot its overpriced by 200k and will sit FOREVER…. try a short sale.
I call BS, if they want to build make them pay….The fees are in place for a reason. If responsible building practices were taking place earlier and possibly smarter planning ahead and foreseeing future of business, like many other industries have had to do, they wounlnt be crying out for help. The slow down in building in this area is welcomed for time being. Lets get caught up with a stronger plan for schooling and infrastructure for the surrounding areas. Why give any breaks when its not these fees holding up building, its the housing market itself being flooded with un sold homes, foreclosures, short sales. The lending insdustry tightening up its act……I wish all the builders good luck in this saturated market, but please dont ask for a break from payments, as it is just a cost of business you pass on to the end buyer. You problem is that the buyer now has so many options and housing to choose from if a qualified buyer……..
Mr. W. Eye, you are correct! The members of COBA are in denial. Its time for them to stop the offensive and regroup. Hopefully, they saved some of the booty from when times were good to get them through the rough times ahead.
Bad idea Bend Council – Bad idea
COBA is wrong, Don’t fool with the fee’s. It’s the city planning commissions fault for letting them over build to many poor quality homes no one wants to buy anyway. Limit the amount of building and require much tougher standards of construction. Set this area apart in the sustainability of homes built in this area. Build homes that will last longer than the mortgages they have on them. Such as ICF, With spray in foam insulation in the attic. Mold, Wind, Fire, resistant. They consume half they energy to heat and cool. Etc..Etc… Come on Bend set yourself apart from the rest of the country and then sit back and enjoy the quality of the people you’d attract. It’s just a matter of education.
“Nice gratuitous link to PA’s boobs down at the end”
Thank you. We try.
Can anyone actually explain to me how this id going to help? Not the link to PA’s boobs, I mean, which is much appreciated, but the SDC deferment. Maybe the builders should hire PA to promote the local market? Then things might turn around. I think Dana Bratton missed a golden opportunity here.
This town is overbuilt and our market crashed due to investors, greed and a slowing economy. Bush and good ol Cheney knew going into the last 8 years that there was nothing really supporting our economy so they deregulated the lending and created a boom which they anticipated would crash as soon as a democrat got into office to be holding the bag and the blame. In the meanwhile Bush started a war and made sure his buddies could ship all of our jobs off shore and turn us all into Wal Mart shoppers, to be buying all of our products from behind the Great Wall where all of our jobs migrated to.
Dana Bratton is a crook and after her appraised the land where Tetherow is now for 5 grand an acre ( should have been 200K an acre minimum) in a land swap deal made by crooked developers and crooked real estate people, we now wonder why our economy is in the toilet? DOH.
Further the commercial on TV about some local builder building you a home with equity in it in this market is a joke. The only reason they can have a home with 20% equity in it is due to the use of criminal minded appraisers who should be in prison along the side of their good ol boy Larry, or it is Dave or Bob the builder….
just do not buy this baloney
The builder with a difference is right!!! We are having to build because our house burned down. We are paying the fees directly and I am not crying about it. One thing I would like to know is how can I find spray foam insulators in this area. I’ve tried whitepages, what a joke. Spoke with one local company and he tried to talk me out of it. Plus he did not sound like he knew what he was doing. I am interested in the soy product not the unhealthy stuff. Help anybody???