A perspective from Oregon’s mid-Willamette Valley

It’s not taxes that fuel N.A. growth

Written July 15th, 2019 by Hasso Hering

On Saturday, orange netting surrounds one of two oaks the Pheasant Run developer is saving.

Contrary to persistent chatter on social media, it’s not the prospect of more tax money that is causing Albany officials to approve big subdivisions like the controversial Pheasant Run in North Albany.

New housing does add to the the city’s tax income, but as a rule the expense of public services grows faster than population growth, especially growth in single-family developments. No, what fuels the growth is a demand for housing combined with zoning and a development code that allows subdivisions that meet the rules.

Now that construction of the first phase of the (cynically named) 147-lot Pheasant Run subdivision has started, on the west side of Crocker Lane, there’s been an eruption of bitter criticism on a neighborhood online forum. The critics largely blame lust for tax income for the council’s appoval of housing that makes traffic congestion worse than previous subdivisions had already made it.

But consider some numbers. Assume that each of the 147 houses eventually to be built in Pheasant Run is valued on the tax rolls at $250,000. The city’s permanent tax rate plus public safety levy is about $7.55 per thousand. At that rate, the annual tax income to the city from the entire subdivision is about $277,000. It’s something, obviously, but compared to total tax receipts of about $27 million in the second year of the current biennum it’s a drop in the bucket.

Once each house it built, the city will also collect systems development charges for future street, park, water and sewer system expansions. Current SDCs total $7,863 per house, or under $1.2 million for the whole development. A nice sum, to be sure, but no game changer when it comes to the cost of expanding each of those systems as the population grows. (The partial rebuilding of North Albany Road alone cost more than $6 million a few years ago.)

If people want to blame somebody for the growth of traffic and loss of countryside in North Albany, they should blame all those (including me as an editorial writer) who pushed for the annexation of North Albany in 1991, and the voters who appoved it. The subsequent zoning of the territory for residential development — what else was a city going to zone it for? — sealed the fate of what had been a few scattered neighborhoods surrounded by farm fields and woods.(hh)

In the distance, a pile of logs that used to be a big oak at Pheasant Run on Saturday.

Posted in: Commentary

25 responses to “It’s not taxes that fuel N.A. growth”

  1. Ray Kopczynski says:

    Thank you for another very erudite commentary! (Not that folks on “social media” will ever pay any attention to it…)

  2. Pat says:

    No problem with the number crunching, but what attracted us and many others to NA was the large lot zoning. The city tied itself to requiring the approval of these smaller lot cookie cutter subdivision by the exceptions allowed to large lot zoning in their code. The new state requirements on housing will simply compound all of this.

  3. Jim Engel says:

    Still a damn sorry shame the City is allowing those long standing oaks to be cut down. Somebody isn’t trying too hard to work around the site to save a life sustaining entity!! It’s time to retire those meaningless “Tree City USA” signs in light of this butchery of nature!!!!!!!!

    • Tracy Traw says:

      I see those old oak trees fall over all the time, they aren’t great redwoods. They don’t have much of a root ball. With that being said I would rather see trees than houses.

      • Jim Engel says:

        Aw come on Tracy….. When did the last oak just fall over??!! Lame reason for allowing those guilty (8) to be cut down while in their prime!

  4. Mark Chambers says:

    Thank you again Hasso for the explanation … so often when we get “ours” and then see it changing we look for evil intents that do not exist

  5. Rolland says:

    And just wait for SB2001 to be fully implemented and triplexes and quads get built in single family zoned areas.

  6. Ann says:

    The developers have stated that they are building $350,000 “starter homes” in this development. I’ve never been able to get past the fact that developers think a first-time buyer could, or should, get a $350,000 loan. Glad to see the fencing around the oak. We couldn’t tell from our view if that had happened yet and it is a good sign that those two trees may actually survive the building process.

  7. Donald says:

    Nice work HH

  8. Bill says:

    It’s the amount of new construction throughout the area that has me wondering.
    Bob – “Lets build 5000 new dewellings for folks” Buford – ” For what folks – and where are they living now – and who will occupy the dwellings they’re leaving or do they all get demolished? They wouldn’t be pouring in from California would they? Not that there’s anything wrong with that. Califonia’s loss is our gain. But what are they gonna do for a living when they get here or are they all retired? Albany – It’s for old folks. – Maybe.

  9. John Marble says:

    An $8,000 development fee probably sounds like a lot of dough to a new homeowner or builder. But If, as you appear to imply, the System Development Charges (SDCs) are actually lower than the true cost of providing the service, I would propose that those low SDCs are actually providing a subsidy to development, and are themselves a driver of growth.

    Perhaps new dwellings should pay the true cost of extending services, plus purchase a percentage of the already-existing infrastructure. That is, unless the current residents actually like subsidizing growth.

  10. Steve Reynolds says:

    Just thinking this through…

    I believe North Albany is going to retain most of it’s original characteristics compared to Linn Albany. It appears the driving factor of all of this is migrating population increases, development costs, and supply restrictions caused by the urban growth boundaries (UGB), I don’t see the passage of HB 2001 affecting North Albany on a grand scale, other than bottlenecks at the bridge, it may align North Albany more with Corvallis as far as retail usage. I think you’re going to see a transformation more in the older parts of Linn Albany where property values are much less, it starts making economic sense to tear down old houses and replace them with four-plexes or converting older houses to four-plexes and not having to pay all the development costs as a result of using existing connections and such. North Albany is far too expensive to tear down houses and build small multi-family unit projects, plus at this time the market rents will not support this model, in addition most residents of North Albany don’t need the additional income from something like an ADU, so those seem unlikely. The apartments make sense in North Albany because you can stack so many more units on the same amount of land as a four-plex and amortize the additional costs but there’s just not that much land in North Albany available to develop this type of housing. You have to remember the median income in North Albany is $87K v. Linn Albany at $49K, the demand for single family residences will be even higher in North Albany with the passage of HB 2001, which will in turn drive up prices even more.

    As far as supply, there’s just not that much land left in North Albany to develop and as the development codes are relaxed, single family will be at a premium. Those with resources will migrate to the areas that have the least possibility of being developed into multi-family units. Also, the likelihood of adding more land from exclusive farm use to the UGB in North Albany is almost an impossible task, there’s no political will on either side to eliminate the UGB.

    I think the past North Albany annexation question is a double edged sword. North Albany is protected by the fact Albany has to fill in the rest of the UGB on the Linn county side before it can expand, plus you’re not in the Millersburg predicament where you’re trying to pay for everything with a small population and you’re at the mercy of Albany and whatever they want to charge for services you have to have. I think the big expansion and transformation of Albany will occur out by Knox Butte, there’s significant amounts of land that has yet to be developed inside the UGB, plus that’s where all the big retail exists and you have the close proximity to the freeway.

    The other edge of the annexation sword is, will Albany city use North Albany to subsidize what is occurring in Linn Albany? To some extent that is already happening. Tax revenue coming in from North Albany is diverted to other parts of the city, it’s fairly obvious North Albany doesn’t use nearly the resources that the tax revenue represents, if this was insurance North Albany would get better rates than Linn Albany because there’s far fewer claims. On the other hand, you have to remember North Albany is only 1/5 of the population of Albany so Linn Albany can always “vote” with a majority to take additional resources from North Albany. It’s the old saying, democracy is two foxes and a chicken deciding what’s for dinner.

    • Ray Kopczynski says:

      Well reasoned comment! However, it doesn’t pass the “15-second sound-bite” test, so it will probably not resonate with most folks…if they read it all… :-(

      • hj.anony1 says:

        Here it is in 5 sec….N. ALBANY TAX Payers foot the bill for more than they get in return!


  11. Becky says:

    I voted against being annexed into the City of Albany for just what many are now complaining about…………too many cars that the roads can’t support. I moved out here because if felt rural but we were still close to town. Still am close to town but it doesn’t have the same rural feeling it did 44 years ago.

  12. Becky Swanson says:

    For me it is all the cars on roads that weren’t built to handle that much traffic. When the round-about was at the corner of Springill and Quarry a few years back an estimated number of between 10,000 and 12,000 cars went by our house everyday. Our road was built as a farm road. The only time it was really quiet (no traffic) was between 2am – 3am and even then there was some traffic. And now more homes/apartments being built and no new roads…………..

  13. Dala Rouse says:

    When N. Albany was annexed to Albany it was because portions were declared a health hazard from leaking sewage. The people involved where going to have to pay for the extended sewer lines so got together to have more property annexed to help them pay the bill. The total UGB in N Albany was voted on to be annexed to the city. As far as N. Albany paying more than what they receive in services is not entirely true. Each year the city passes a Capital Improvement Project list of items in the city to be done. It seems that most of the water line repairs have been in N. Albany for several years as well as some sewer projects. Most of these projects come from water rates which the Linn side contributes the most.
    Many of the street problems you have in N.Albany are on Benton County roads. I would much rather take a drive in Linn County where the roads are well maintained.

    • Steve Reynolds says:

      Dala, I enjoy reading your commentary and listening to your take on things. I thought the argument you made regarding the developer trying to count the wetlands as build able property when calculating whether they could get an exemption from the development codes in order to create the smaller lots, was brilliant. Unfortunately the political winds are in the direction of high density housing, I fear even though this was a sound argument it would have fallen on deaf ears as it looks like it did.

      Interesting take on using the cost of water and sewer to offset the lack of return on property tax. I don’t know if I agree that capital projects for water and sewer can be counted as a “benefit” to the North Albany resident. For instance having to drill under the river to lay new lines to connect city services was expensive but not necessary for current North Albany residents. Wasn’t it more for the developers who need city services to build the high density housing that the state is promoting and North Albany residents are complaining about? Would N. Albany resident be fine with personal and community wells especially when it helps keep their acreage restrictions?.

      I’m not sure about the sewer situation. weren’t most in N.A. on septic along with some on the transfer station. Are you saying the current septic and station system could not have handled development even when it was based on the restricted acreage development code? When N.A. was annexed was something leaking and driving the bacteria levels up in the Willamette? I would be curious to read your take on that.

      Thanks for keeping us informed.

      • Dala Rouse says:

        Steve you are thinking in today’s terms not 1989. In the late 1980’s septic tanks in North Albany were failing partly because Benton County was allowing subdivisions in the county and everyone had a septic tank. The type of soil wasn’t letting them work properly. Sewage was coming up in peoples yards. They had some water systems like the Parker system so everyone didn’t all have wells which was probably a good thing.
        As far as your comment about the wetlands not being able to be developed it was also under the power lines that can’t be developed for housing. Cluster development is not what we intended when is was first discussed and written which is why some development has smaller lots than the RS-10.
        When the city talked about annexing North Albany they said that they would keep it rural but that isn’t happening is it?
        I try to do my homework and give people a fair decision.

        • Steve Reynolds says:

          It does seem certain promises have a limited shelf life, or some type of “out” written in.

          Thanks Dala


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