Battered Bend Builders Beg Bend for a Band-Aid

Builders in Bend want the city to kick-start their stalled industry by giving them a break on Systems Development Charges.

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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?

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