Wimpy Economics

This week in the Review there's a story about the Wizer's building being transformed into a 242 High End apartments, some retail, underground parking and a small plaza.

Wow!

That's on top of the 500+ new apartments built in Wilsonville this year and the new wrap-around Bridgeport Apartments which will feature 367 High End apartments.

Bridgeport - a whopping 60 units per acre comes to a congested street near you!

Bridgeport Apartments, a two building, four-story, 367-unit project is being built in Tualatin near Bridgeport Village. The massive 631,000-square-foot development (including 22,000 square feet of retail space) will feature a “wrap-around” design, which centers on a concrete parking structure with wood-framed housing wrapping around it.
Residents will be able to drive into the parking structure, park on their apartment’s floor and walk a short distance to their apartment. The idea, Rodriguez said, is to create a high-density product in what is traditionally a low-density market.

Rodriguez said that while the standard garden-style apartment design tops out at about 30 units per acre, the wrap-around design can reach densities between 55 and 60 units per acre. With suburban rents recovering from $1.10 per square foot a year and a half ago to between $1.30 and $1.40 today, Rodriguez said now was the time to get moving on the market-rate project.

We seem to be the place for High End apartments.
But how do these get paid for?

The Review says this regarding the Wizer project:

But Kessi said the project won’t pencil out without some support from the city’s redevelopment agency.
Developers are hoping the urban renewal agency will essentially cover or waive the city’s usual fees associated with new developments along with fees for permits, and contribute $750,000 to the project. In all, that amounts to an estimated $5 million public investment, he said.

“Public participation is needed so we can make this development a reality,” Kessi said, noting the project would provide many more dollars in property tax revenues and would generate construction excise money for public schools."

I will gladly pay you Tuesday!

Dear Taxpayer - this is too much froth on my latte!!!  

Not only are Developers Developing and Landowners Landing, but THE PUBLIC gets to pay for it!!

While you and I have our property assessed and get our bills in the mail, do you think the corporation will just get their bill and meekly write their checks, lick a stamp and pay?  Could they conceivably negotiate tax credits and deferrals and preferred rates and points for good behavior and things regular folks don't even know can be done?  It won't be like we'll have 240 new tax-paying homes here.

And the Excise Tax?  That tops out at $1 per square foot or about $240,000 for the complex. And even this can potentially be reduced because it's on already developed land. So it'll be a one time kick of $200,000 say, for Capital Improvements. Not to hire teachers. Not to buy books and keep coaches. But it will be useful for some repairs. Better than a poke in the eye with a sharp stick.

Nope, the take-away message is that this $5M will be going to the developers and others, but will not trickle back down to the city or the schools any time soon. 

Developments like this are not fully funded by the landowner, the developer or the people that will one day live there. In this instance the public is paying $20,833 for each of the new units. Sort of like one year's free rent for each new resident.

The plan that the Stafford Hamlet Board is working on now will probably cost a pretty penny to realize too  Although the odds it will even be considered when we come into the UGB are slim to zero, as a matter of curiosity we should be sure to ask what the costs could be, both the ones we get to pay and the ones The Public will pay for us.