Fee increases put squeeze on market

Tom Monson is trying to build affordable housing in White City and was surprised to learn Jackson County is raising fees on new construction by 38 percent — the biggest increase ever.

"That's great — that just cost me 80 grand," said Monson, who is ready to start building an 80-unit housing complex with homes costing $159,900.

Monson said other developers and builders he's talked to are also concerned about the increases, scheduled for July 1.

Jackson County's fees will jump from $2,300 to $3,100 on a single-family home to help pay for county road improvements.

"That's a bit much to swallow," said Monson.

He said he's trying to keep costs down so that he can sell the 64 townhomes and 16 condominiums at a reasonable price to attract working families.

Jackson County is raising fees to help make a dent in the $4 million the roads department will lose as a federal safety net disappears.

Monson is trying to get as many building permits as he can before the new fees take effect.

Eric Niemeyer, county traffic engineer, said the increase is the biggest ever and will help pay for road improvements such as widening, turn lanes, lights, curbs and gutters and right-of-way purchases.

Since 1991, the county has received from $500,000 to $1 million annually from these systems development charges. The increase will add about $300,000 a year, depending on development activity.

Jackson County receives money for roads from the state, from gas taxes and from the county general fund.

The county is expected to receive about $23 million from the federal government as part of a one-year extension of the Secure Rural Schools and Community Self Determination Act. With $4 million of that expected to go to the roads department, Niemeyer said the county would still collect the new fees. Even if the county received a four-year extension of the act, Niemeyer said the county wouldn't hold off on the new fees because there are so many road projects that need to be done.

"We're always kind of behind the 8-ball on adding capacity," he said.

Niemeyer said Jackson County's fees are still less than local cities. Medford, for example, charges $3,600 on a single family house, he said.

Mike Neely, president of the Home Builders Association of Jackson County, said the new fees are coming at a bad time.

"It's another slap on top of a sluggish market," he said.

The fees for industrial development are also going up from $1.22 to $1.70 per square foot, which could make it more difficult to attract industry to the area, he said.

The biggest impact could be to affordable housing, said Neely, because on the one hand government officials talk about the need for affordable housing, while making it more difficult to build it by increasing fees.

"They've got to decide: how important is affordable housing?" he said. "Are the government agencies working together for affordable housing?."

Neely, owner of the custom homebuilding firm Ken Krumdieck Inc., said a $900 increase in a $400,000 or $500,000 home is relatively insignificant, but still is a cost that will affect the overall budget.

Other builders of subdivisions are struggling with the downturn in the real estate market and this could further strain them.

"Some guys got extended too far and got hurt," he said.

Reach reporter Damian Mann at 776-4476 or dmann@mailtribune.com.

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