As an apartment owner in Pendleton I’m not worried about the rent control bill 608 that came out of Salem. The law is predictable, out in the open and applied the same to everyone around the state without exception. It’s a level playing field, so no one will get a competitive advantage because of this law.
A much bigger uncertainty for investors and developers in Pendleton has been created right here at home, by city hall. City officials are meddling with the free market, giving taxpayer dollars away in the form of free land, reducing permit fees, cash to downtown units, road infrastructure to Pendleton Heights, interest-free loans and property tax breaks. These have not been given out evenly and equitably, but selectively by picking winners and losers.
The city has spurred the next 20 years worth of apartments that will be coming in the next two to three years. This oversupply of new units crushes the value of existing apartments and will ultimately drive down rents for decades as the new units are absorbed. City council is flooding the city with market rate apartments, despite the recommendations of the August 2016 Sabino housing study (25 executive level units, 20-40 downtown units, 100 units at Pendleton Heights). This glut of an additional 205 units was apparently not a recommendation of the housing committee either. City council is also ignoring a new FCS Group housing study that, while not yet complete, currently recommends 17 units per year for the next 20 years with a high portion of those being set aside for low income.
No report, study or committee suggests building two decades worth of apartments in the next two to three years. So why does the taxpayer keep paying for expensive housing studies? Why doesn’t city council follow the recommendations of the expensive housing studies? It is also unprecedented to give away public funds without a low income requirement. How many of the 305 newly incentivized units are designated for 30% of median income? How many for 50% of median income? It appears to be zero.
City officials have chosen to incentivize building only on taxpayer-owned land or downtown. This strategy punishes anybody who owns multifamily land already or purchases land to build on by putting them at a competitive disadvantage. If you currently own multifamily zoned vacant land, it will be essentially worthless until 2040.
Common sense would say that if you want to grow your city, then incentivize anybody who is willing to build here and grow your tax base. With no clear-cut set of rules or guidelines for incentives, who knows what city council will incentivize next? Are there any Republicans, Libertarians or even Democrats outraged by this assault on the free market? Isn’t the free market the answer to the housing crisis?
Investors and entrepreneurs would literally be better off investing their capital in any other city in Oregon. The free market in Pendleton is dead.