Wednesday, February 18, 2015

Don't end impact fees for 'affordable housing'

The biggest con job out there is the one that says if Bend pushed out its urban growth boundary then we would instantly have "affordable housing" for all those low-wage folks working in retail or in tourism in the city.

The other canard is that building impact fees or system development charges (SDCs) make housing unaffordable in Bend.

The real point is that affordable housing for many in Bend is gone, at least for the foreseeable future.

Paradoxically, the lack of affordable housing here is a sign of Bend's success as a desirable place to live.

The median price of a home in Bend is $298,400, according to Zillow.

Yes, more land and no SDCs could make some houses slightly less expensive, but they would not make homes more affordable. That's assuming, of course, that builders/developers would lower the price they charge. History has shown they would not. They would just increase their profit margin.

Currently in Bend, there are a number of subdivisions ready for new homes, but they aren't being built because the market won't allow for the kind of profits the builders want. No one is stopping a developer or builder from selling an "affordable" home. They would rather not, thank you.

The goal is to maximize profits, regardless of profession. Maximum profit in housing correlates directly to less affordability.

Adding more land at high prices by expanding the urban growth boundary will have little or no affect on the affordability of a home in Bend.

When home building took off in Bend in the 1990s and early 2000s, due in part to the availability of more land, housing prices soared.

As for SDCs, they're currently around $17,000 per home for the city ($11,000) and park district ($6,000). Take away that $17,000 from the median price of $298,400 and you get $281,400. Is that really affordable for people making the minimum wage of $9.25 an hour? Even with four people in a house making the minimum wage they still wouldn't be able to live a decent life with a home price of nearly $300,000. Actually, they probably wouldn't even qualify for a loan.

If there were no SDCs, the city would do even less than it does now for decent roads and other infrastructure. In essence, Bend would become less livable.

The park district, unlike the city, doesn't buy the argument that SDCs are impeding affordable housing construction. The park district knows that one of the reasons why Bend is considered "special" is because of its parks and recreation programs. With no SDCs for parks, Bend would become less livable and, ultimately, a less desirable place in which to live. Only when an economic collapse occurs or when a place becomes less desirable do housing prices decline.

Granted, in order to fully pay for their impact on city services, SDCs would need to be at least $50,000 per home. We'll never see that figure or anything close to it. But, that doesn't mean we should get rid of the $17,000 that is currently collected. It's better than nothing.

The only area where a reduction in SDCs make some sense is in the calculation for apartment buildings. They could be scaled downward per unit as the number of units increase.

Yet, the place where apartments are needed most, on Bend's west side near the proposed OSU-Cascades campus, there are no plans for any apartment buildings. Expanding the urban growth boundary or eliminating SDCs will not lead to any apartment construction on Bend's west side.

The only group working diligently to make housing affordable for low-income workers is Habitat for Humanity which has built 106 homes here since 1989. No other developer or builder can even come close to that number.

Obviously, 106 affordable homes are not enough.

The solution is to move to a more affordable place.

In Redmond, the median price for a home is $209,000. In Madras, it's $109,000. In Prineville, it's $170,000 and in La Pine, it's $161,800.

If you want affordable housing in Central Oregon, your best bets are moving to La Pine, Redmond, Madras or Prineville. Unfortunately, that is how "progress" works.

1 comment:

  1. Homes in the 200s and 300s become "affordable" if wages keep up -- but they're not. If you're making $70K than a house that's in the ~300K range is within reason.

    My concern would be jobs.