Saturday, July 3, 2010

Central Oregon foreclosures lead state

While Oregon is mired in third place in rate of foreclosures, the state is dragged downward by Central Oregon.

Check out this story in The Oregonian.

Foreclosures jumped 20 percent in Oregon during the first quarter of 2010. Leading the way are Crook County (Prineville) with 9.9 percent of homes in foreclosure, followed by Deschutes County (Bend, Redmond, Sisters, La Pine) with 9.5 percent of home in foreclosure and Jefferson County (Madras, Culver) with 8.5 percent.

Local governments in Central Oregon approved any and all developments during the mid-aughties. It was easy to see that a collapse in the local housing market was imminent because the main demand for all this housing was from speculators, many of whom were real estate agents.

In the wake of this catastrophe, the problems are numerous. Aside from all the vacant homes and subdivisions, which further depress the housing market, all the cities in Central Oregon are left with inadequate infrastructure from roads to water to sewer to storm drains to parks.

In Central Oregon's largest city, for example, Bend never adopted a single public facilities strategy during the boom years. The consequence is that we have public facilities in disrepair.

For the sixth year in a row, Bend jacked up its water and sewer rates (in the 6 percent range for each) that is triple the rate of inflation. Because the city requires so little from developers, the rest of the community must subsidize some of the richest people in town and, in the case of D.R. Horton, the country.

Bend, which like most governments is broke, needs about $200 million just to improve the city's roads to match all the development.

The city can't even provide sewer service to 50 percent of its residents.

Amid all these problems, Bend wants to expand its urban growth boundary by 40 percent.

Common sense has always been in short supply when cities are run by developers. In Bend, there isn't much sense at all, common or uncommon.

The daily newspaper, the chief cheerleader for unmanageable growth, has benefited from the foreclosure fiasco. Since only fools advertise in the daily's classified section because Craig's List provides a superior product for free, the daily's classifieds are new filled with foreclosure notices.

As they say, when someone loses, someone wins.

Right now, Central Oregon is losing, bigtime. The jobless rate is nearly 15 percent. Developers want more breaks from cities. The only winners are those who cashed out before the collapse.

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