Just needs a little stimulus.As the housing slump widens and deepens, builders all over the country are in a world of hurt. Builders in Central Oregon are hurting too. But the builders here have come up with an idea to ease their pain: Interest-free loans from the taxpayers.
The loans would take the form of a break on SDCs – Systems Development Charges. These are fees builders pay to help cover the cost of new roads, sewers, water mains and other stuff made necessary by new construction. In the City of Bend, SDCs can run upwards of $13,000 on a new house.
As things stand, builders have to pay the SDCs up front, before they can get their building permits. But under the bright idea the Central Oregon Builders Association has put forward – an idea that, incredibly, has the support of the city’s Community Development Department – SDC payments would be deferred for nine months, interest-free.
At the end of nine months, supposedly, the builder will have sold the house and be able to pay off the city. Or if he isn’t, the city will have a lien on the house as security.
This scheme is screwed up in so many ways we’d have to write a book to describe them all, so we’ll try to just hit the high points.
One: Nobody seems to even know how much money the city would lose under this deal, much less how it would make up for it. At the very least, the city would lose nine months’ worth of interest on any SDC payments it didn’t get when it was supposed to.
Two: What if (as seems all too likely) the builder isn’t able to sell the house and pay the SDCs in nine months? Will the city give him another nine months? And another?
Three: COBA wants the SDC deferral to be in force for 12 months What if (as seems all too likely) the housing slump isn’t over in 12 months? Will COBA want another 12 months? And another?
Four: If a builder goes bankrupt (hey, it could happen) and can’t ever pay the SDCs, what then? The city ends up holding the title to a house in one of the most overbuilt and overpriced real estate markets in the country.
Five: How is this deal supposed to help Bend claw its way out of the housing slump? It isn’t SDCs that are driving the market down – it’s too many houses and too few buyers, as the result of (a) overbuilding during the boom and (b) the drying up of credit from lenders who are burdened with bad debt after making too many bad loans during the boom.
The city council has yet to approve COBA’s welfare scheme, and we hope it will join us in vigorously giving it THE BOOT.
Meanwhile, in recognition of a singular achievement in the field of chutzpah, we would like to confer an additional honor on COBA: a trophy in the form of two baseball-sized spheres made of solid brass.
This article appears in Jul 10-16, 2008.
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Man I love the Source, you are right on the money. Where is Z21 NEWS,The Bulletin and KOHD on this situation? Is COBA paying them off to not talk about how bad our market sucks.
NEWS FLASH… As Californias market goes so does Bends as we are dirrectly linked, most of our home buyers come from Cali. Californias market will bottom out next spring
Doesn’t the property tax accrual clock start when a new home’s foundation is poured? So, by defering the charges the City keeps increasing the tax base and their revenues. Could that be the real reason for their support?
The SDC’s the builder pays doesn’t really pay for all of the public infrastructure requirements as it now stands… asking for a further measure of taking it in the shorts is absurd. How about the entire SDC’s for any proposed development be paid upfront before any construction starts on a single unit?
I suspect it will be several years before the economic woes spawned by the oil rip-off process lightens up enough for the real estate market to recover…if ever…To solve the real estate crisis, in the long run, will probably mean solving the fuel crisis. Hydrogen is the way out of this mess but it takes a lot of electricity to produce it. One cubic mile of sea water would provide all of the energy needs of the ENTIRE planet for over twenty years…So, the solution? Build a gob of atomic reactors near the oceans… start making a bizillion cubic meters of hydrogen…now. The loss of ‘energy’ converting electricity to hydrogen is about 30% with current technology. A conventional piston engine will even run on hydrogen…and it emits only heavy inert carbon, which falls to the ground…and water.
Wake Up!
Right on! Nice to see some real coverage of what’s going on. The Bull would rather we don’t talk about all this corrupt BS going on and pretend the housing market is fine…
Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.
Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who
That it’s namin’.
For the loser now
Will be later to win
For the times they are a-changin’.
Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside
And it is ragin’.
It’ll soon shake your windows
And rattle your walls
For the times they are a-changin’.
Come mothers and fathers
Throughout the land
And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is
Rapidly agin’.
Please get out of the new one
If you can’t lend your hand
For the times they are a-changin’.
The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin’.
And the first one now
Will later be last
For the times they are a-changin’.
Won’t the neo-cons ever give up? Of course COBRA”S absurd, on how to fix the housing slump. What’s even more absurd is public officials actually entertaining the idea
Unbelievable, almost…They already have a market glut,local banks are in trouble, this only adds to the problem. Wish county government would defer my property taxes until I get it together and this economy turns around
So we are supposed to defer our city revenue to appease builders? Bullshit….they are the reason we are in this mess. It continues to get worsened by crooked real estate appraisers, criminal developers and banks that dole out cash to their good old boy buddies who are filing bankruptcy by the dozens.
We need to demand full payment from developers and builders as we are not a socialistic country as of yet unless you are an oil company or investment company like Enron or Bear Stearns.
This is the example of Orange County assholes who ruined this town
“This is the example of Orange County assholes who ruined this town”
With all due respect, it was not people from Orange County but our own locally grown GOBs (Good Old Boys) who did (and still do) most of the developing, building, appraising, lending and selling in this town.
Anybody want to cut and paste ‘Desolation Row?’
No, but how about this one instead?
I ain’t gonna work on Maggie’s farm no more.
No, I ain’t gonna work on Maggie’s farm no more.
Well, I wake in the morning,
Fold my hands and pray for rain.
I got a head full of ideas
That are drivin’ me insane.
It’s a shame the way she makes me scrub the floor.
I ain’t gonna work on Maggie’s farm no more.
I ain’t gonna work for Maggie’s brother no more.
No, I ain’t gonna work for Maggie’s brother no more.
Well, he hands you a nickel,
He hands you a dime,
He asks you with a grin
If you’re havin’ a good time,
Then he fines you every time you slam the door.
I ain’t gonna work for Maggie’s brother no more.
I ain’t gonna work for Maggie’s pa no more.
No, I ain’t gonna work for Maggie’s pa no more.
Well, he puts his cigar
Out in your face just for kicks.
His bedroom window
It is made out of bricks.
The National Guard stands around his door.
Ah, I ain’t gonna work for Maggie’s pa no more.
I ain’t gonna work for Maggie’s ma no more.
No, I ain’t gonna work for Maggie’s ma no more.
Well, she talks to all the servants
About man and God and law.
Everybody says
She’s the brains behind pa.
She’s sixty-eight, but she says she’s twenty-four.
I ain’t gonna work for Maggie’s ma no more.
I ain’t gonna work on Maggie’s farm no more.
No, I ain’t gonna work on Maggie’s farm no more.
Well, I try my best
To be just like I am,
But everybody wants you
To be just like them.
They sing while you slave and I just get bored.
I ain’t gonna work on Maggie’s farm no more.