Thursday, August 7, 2008

Bend Developers Float Idea of Handouts as Solution to Housing Bust

The Central Oregon Builders Association has a great idea of how to end the housing bust in Bend.

Give home builders more time to pay the city development charges.

Here are the details from The Source Weekly:

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.

Maybe the city can rent the homes until the market turns around.