Bend's growing pains

The city of Bend wants to expand its borders. It's got two problems, though. One, has the state asking, what the heck are you doing? The other is, can't you see the real estate market continues to fall all the way to China?

Default notices continue to pile up. Last month there were 326 notices in Deschutes County, which is down from January's tab of 402. There were slightly more than 3,500 notices of default last year and we're on pace to surpass that total this year. We have already smashed the entire total for 2007 of slightly less than 600.

Obviously, there is no sense or urgency to expand the city's boundary.

Amid this backdrop of a cratering economy, Bend has been trying for five years and spent $4 million trying to extend the urban growth boundary in accordance with the state's mandates.

Well, the state slapped down Bend's initial proposal last year. (See earlier post).

The city claims the state doesn't know what it's doing or is being unreasonable in demanding that the city grow up and not out. The local paper and development community, not to mention all those landowners salivating on the sidelines, all whine how the state is wrong.

It has escaped them all that Oregon is merely stating the obvious: Bend is the poster child in the state for pathetic planning and inadequate infrastructure. More than 50 percent of the city is not even hooked up to sewer. The state is telling the good folks in Bend to "grow up" in more ways than one. Also, they city squandered all that growth-related money and can't adequately pay for police or fire services.

The city claims it's been completely bamboozled by the state land-use process. But, Tom Hogue, economic development specialist with the Dept. of Land Conservation and Development, reviewed Bend's proposal forecasting its need for land to house offices, work spaces and industrial buildings, according to the local paper.

"I went through 10,000 pages of documents and wasn't able to makes sense of it," he told the paper.

That's what $4 million buys you. Gibberish.

Showing his ignorance of the current "defaulting" economy, Bend city councilor Jeff Eager told the paper, "I think the preference for greater density is ignorant of economics, because when you restrict the supply of something, the price goes up. So, to the extent that the DLCD prefers the UGB be smaller, then that further restricts the availability of land and drives up the cost of land."

Well, Eager should get out more often. The city hasn't expanded, it's still "restricted," and yet the median price of a home in Bend is less than half what it was in 2007. (See earlier post).

In fact, Bend is No. 1 again among metropolitan statistical areas in the nation for falling home prices. Four years ago, we were No. 1 for the most overvalued real estate in the country. There's obviously a correlation between the two. What goes up, driven by speculators, must come down.

The development community always trots out the canard that unless the city expands to Mars, we won't be able to provide "affordable housing."

No one has ever stopped developers from providing affordable housing. They just choose not to, because of, well, you know, "market forces." They're just selling at what the market will bear. It's always been like that and always will.

It's all about making money off the land. Since Bend's economy is no longer timber-based, it must extract from the resource of real estate.

Until the city can demonstrate that it can provide adequate roads, water, sewer and storm drains throughout the city, it shouldn't be allowed to expand and extend this mess.