The builders of this new house on N.E. Water Avenue were charged $13,657 in systems development fees. (Photo taken in March.)
In the interest of making houses more “affordable,” the Albany City Council seems inclined to lower systems development charges on small new single-family dwellings and raise them on big ones. But “affordable” is not a firm number, so whether the idea works is impossible to predict.
Council members spent about an hour Monday in a work session listening to a consultant, Deb Galardi, who laid out how systems development charges or SDCs on single-family houses might be changed while keeping overall city revenue from the fees the same.
There was no vote, but the consensus was that the city should go that route. The council heard from the staff that requirements in state law make setting impact fees complicated and time-consuming. A hearing to change the fees might be six months away.
At present, builders of all new single-family houses, regardless of size, pay $12,050 in development charges to offset the expected impact the buyers and future residents will have on the water, street and sewer systems. (There’s an additional charge for parks, but that already depends on square footage and number of bedrooms in each house being built.)
Under a plan laid out by the consultant, the impact fees would be scaled according to the square footage of houses being built. According to her, data support the idea that families living in bigger houses on average have a greater impact on the street, water and sewer systems.
One table shown the council would have builders of a 1,000-square-foot house pay $4,747 less than now in impact fees for these three systems. For a house of 3,200 square feet, a builder would be charged $3,054 more.
Park system development fees would be in addition. One new Albany house completed in March – three bedrooms and 1,298 square feet – was charged $1,607 in park fees.
The builders of that house, at 2120 Water Ave. N.E., paid about $13,600 total in systems development charges. In April, the house sold for $359,900.
Under the proposed system of scaled SDCs, the builders would have been charged about $4,000 less. If that had been reflected in the asking price, the house might have been listed at $355,000 instead of $359,000.
Questions for the council: What role did the impact fee play in pricing the house? Would a one percent price difference have made the house significantly more “affordable”? Enough more affordable to go through the steps required to make the change in fees? (hh)
First, let me say that Debbie Galardi is an amazing and talented consultant. I’ve worked with her several times and she always provided sound and flexible recommendations for the elected officials to choose from.
We all know that for most of us, the houses of today are a lot bigger than the houses our parents had when we were young. Recent changes enacted by the State of Oregon have required smaller and denser development.
Setting up “camps” for the homeless using micro-housing seems to be the best available strategy for a quick fix. But quick fixes rarely stand the test of time.
Concentrating the poor has always failed. Having a variety of housing seems to be what worked best in times past. What about new neighborhoods that consists of homes mostly in the1400 to 2000 sq foot range on lots of 4,000 sq ft, with some larger lots, and also “cottages” of three or four 1 bedroom 700 sq. ft. or so houses on single lots scattered through the larger development? A mix that could be more affordable overall?
Just some musing I’ve had in trying to look at a way out of the current housing crisis.
The 1% reduction will let every poor person buy a house! The question should be what bureaucrat hired the consultant? They should be fired for wasting taxpayer monies. Right Bob. Perhaps coach K will offer us some bureaucratic advice.
By design, this session was to be “revenue neutral.” Scaling the SDCs accomplishes that. Whether or not that has any impact for a developer to create the more needed smaller homes is still open for discussion….
Who defines “affordable” housing? Not Albany. Not Oregon.
So this local “solution” is nibbling at the margin.
No matter how much tax the city council collects the problem of “affordable” housing will continue as long as land-use is dominated by feudalism (private ownership rights without development rights).
Which means the most likely “solution” to “affordable” housing will be a federal one – more “free” money to every household that doesn’t make enough money in a particular housing market with kickbacks to housing providers willing to play the game.
It just happened at the FCC for internet service (Affordable Connectivity Program).
So, city council, stop wasting time on this local non-issue and call the overlord of HUD (Madam Secretary Fudge). She has the real power.
Mr. Shadle seems to be onto something when he proffers: “Which means the most likely “solution” to “affordable” housing will be a federal one – more “free” money to every household that doesn’t make enough money in a particular housing market with kickbacks to housing providers willing to play the game.”
With the vast bulk of wealth in America controlled by a paltry minority, Shadle’s suggestion to “spread the wealth” sounds workable. If you are worth a few hundred-million, giving up a few more millions to aid in improving the lot of society hardly seems an imposition. Share the wealth, bro! Musk already can waste millions flying a crappy Tesla around the sun. Certainly he can afford a few 10s-of-millions to alleviate housing inequities.
The Leftist logic you seem to espouse:
It’s “greed” and a “waste” for a person to keep and spend their own money.
It’s “generosity” and achieves the “common good” for government to take and spend other people’s money.
Good luck selling this to the average taxpayer.
Instead of focusing on new suburban construction, the City Council would need to think on upzoning.
There are streets like Queen, 34th, Hill, Geary, Waverly, or 1st Ave that would be great mixed-zoning boulevards, with apartment buildings 3 stories high, no setbacks, no parking lots in front, look for example at this street in Strasbourg, France: https://goo.gl/maps/BaMnQdCPS9GQgwLbA
These streets house more people, pay more taxes without increasing expenditure on pavement and services, reduce car dependance, and more importantly, house people that not necessarily want or need a single-family home, but are forced to get one because there are the only product in the housing market.
We need to stop the suburban growth Ponzi scheme: https://www.strongtowns.org/the-growth-ponzi-scheme
For another example, let’s look at Stalin’s Magnitogorsk. It represents most efficient and woke allocation of living space. As our state already “requires” us to live a certain way, Stalin’s horror is not that far away.
I agree in part with what you are after however whenever apartments are built then people complain that the rents are too expensive (see Hasso’s post about those going in near the river). The real issue isn’t the development fees. The issue is that everything costs more. Developers are in the business of making money after it’s all said and done regardless of some “moral plea” for affordable housing. People won’t work for free thus the costs keep going up. The joys of capitalism vs a socialist state.
“The issue is that everything costs more.”
Yes, everything costs more today. Look for cause and effect.
When Biden set foot in the Oval Office inflation was 1.4 percent. Within 16 months it jumped to 8.5 percent.
The first variable (Biden) clearly brought the second (inflation) into existence.
“The real issue isn’t the development fees.” True, up to a point. SDC’s clearly have some, but probably negligible, effect on rents.
The “joys of capitalism”? “People won’t work for free thus the costs keep going up”?
Two BS statements in terms of causation.
“Elections have consequences”, said ex-President Obama. Very true. Remember this when you write your next rent check and during the next election.
(The last sentence applies to most places in the USA except Oregon. A monkey could run as a Democrat and Oregonians would still vote for it.)
Enjoy those high rents, soul-crushing taxes, soul-destroying food prices, and record high gas prices. You have no one to blame but yourself.
Give it a rest Gordon. Your ignoring COVID, lockdowns, supply chains disrupted, China locking down industries like shutting down Elon’s Tesla plants, along with every other industry in China, the biggest supplier of goods world-wide.
What’s the results of too many people clamoring for too few goods? Prices skyrocket. ECON 100.
You know as much about economics as you know about quantum physics. Zilch.
This country is being torn apart because of hateful demigods like you spreading half-truth intertwined in outright lies, to score political points.
Budget Deficits in the US:
https://datalab.usaspending.gov/americas-finance-guide/deficit/trends/
With Obama ‘s last year in 2016 the Federal Deficit was a little over 590 Billion.
With your man Trump’s last year in 2020 the Federal Deficit was over 3.1 Trillion
At Bidens end of his first year in 2021 the Federal Deficit was down to about 2.8 Trillion
Inflation is going to continue no matter what ANYONE does.
China is still shut down. Putin is waging war on a democratic country pushing the rest of the free world to refuse to buy Russian oil and gas, which means the Saudi’s and rest of the oil producing world can increase prices and profits by keeping supplies low.
So Gordon, we can cut the cost of oil which is driving a large chunk of the inflation by stabbing the Ukrainians in the back and capitulating to Putin.
Where do you stand Gordon?
I RARELY agree with Gordon, but his comment about a monkey is dead on!