A rural city's aggressive push for more housing
- Written by Kim Moore
- Published in Real Estate
- 0 comments
In rural Oregon, a lack of new and good quality housing hampers economic development in communities that are desperate for investment.
High construction costs and low property values often discourage contractors from building in these areas.
The lack of new housing means rural communities miss out on valuable property taxes that could be used to provide many of the amenities enjoyed by urban residents.
In the small eastern Oregon city of John Day, government officials have a plan to reverse this trend by offering generous financial incentives for new home construction and remodels.
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John Day, pop. 1,674, currently has 170 acres of underdeveloped land that has almost no tax value. Only three site-built houses have been constructed in the past decade.
To attract developers, the city is offering to pay builders system development charges of $7,400, as well as a 7% cash rebate on new home construction. Property owners that remodel their homes can get a 15% cash rebate based on the increase in the property’s assessed value.
For the city to recover its investment, houses have to be located in the urban renewal area encompassing 20% of land scattered throughout the city. The area includes every buildable lot that is zoned residential and approved for development.
“This may be the most aggressive housing program in the state,” says Nick Green, John Day’s city manager.
“The nice thing is it is replicable. It can be done anywhere.”
The program is partly funded by the Department of Land Conservation and Development. “There are a lot of eyes on it to see if this model is successful and if we can export it to other communities,” says Green.
The goal is for 100 new homes to be built over the next 20 years, a 12-15% increase in the existing housing stock, as well as 100 remodels over the same timeframe.
Green says he has heard people have already started buying land intending to build retirement homes under the program.
The city manager estimates the tax base will go up $150,000 if the housing program meets its objectives. “That is money that can fuel economic recovery programs and those amenities that we need but just can’t sustain.”
He hopes the housing development will attract people looking for a second home or a place to retire, as well as digital commuters in the services sector who can work from anywhere.
To attract digital commuters you need broadband, of course, and in John Day connectivity is spotty. In 2017, the city obtained seed funding to begin a publically-owned broadband project that will allow internet service providers to access more homes and areas of Grant County.
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