Tuesday, April 14, 2009

Eugene bedroom community trys to stimulate new housing

From the Register Guard:

The City Council has voted to create an ordinance that would temporarily decrease systems development charges by 50 percent in an effort to stimulate building.

City staff will present the ordinance at the April 23 council meeting. The city proposes to reduce the SDC fees through July 31.

SDCs are charges imposed on new homes and other construction and are intended to pay for the demands placed on city infrastructure. Currently, Harrisburg’s SDCs for a single family home average are about $9,400, which means the new reduction would save a builder about $4,700 per home.

City recorder Michele Eldridge said the city collected more than $869,200 in SDCs in the last fiscal year. This year, the city estimates it will bring in more than $239,200.

I'm sure existing home owners love the idea of more housing supply in their town.

Eugene is a little different than most Oregon towns. The Urban Growth Boundary is a legitimate constraint on land because they never expanded it (probably never will). The result is bedroom communities, like Harrisburg, had a major housing boom because people can't afford/find a home in the city. With sales dropping off a cliff and buyers choosing closer-in areas Harrisburg doesn't have a leg to stand on.

Springfield offered a similar development incentive last year; it didn't work. Now look at their next great idea.